Thursday, March 15, 2007

The Bush administration’s farm bill proposal will aid in getting the stalled Doha round of world trade talks going, even before it passes, Agriculture Secretary Mike Johanns said yesterday.

The trade negotiations stalled last year, mainly over developed countries’ farm subsidies.

The administration hopes that Congress passes the farm bill — which must be reauthorized this year — by the time it takes its August recess. But the administration’s 65 proposals, which include a number of provisions that could make U.S. policies more acceptable to WTO members, could help get the talks moving, Mr. Johanns told editors and reporters at The Washington Times.

In provisions aimed in part at making U.S. programs more compatible with the World Trade Organization, the Department of Agriculture is proposing to convert a current program of payments to farmers that is based on prices into one based on farmers’ revenues, reduce the adjusted gross income limit for commodity subsidy payments from $2.5 million to $200,000 and revise marketing assistance loans for corn, wheat, cotton, rice, soybeans and other crops to reduce what some people say is the market-distorting effects of the current program.

“I think it’s helpful, you’re … right,” he said, “because we’ve taken some support for agriculture, we’ve boosted funding for conservation — that’s green, you know, it’s not trade-distorting — we’ve boosted funding in direct payments, while impacting the more trade-distorting payments — yes, that’s positive.”

Mr. Johanns said that, generally, basing payments to farmers on something other than prices or production should eliminate WTO concerns.

“I just believe that this is going to be a lot better approach from a trade standpoint than what we have today,” he said.

The round of trade talks is facing a tight deadline because President Bush’s trade promotion authority, which allows him to submit trade deals to Congress for an up-or-down vote without amendment, is set to expire June 30. The administration says it needs the authority to be able to successfully complete the talks and reach bilateral trade deals.

But extending the authority promises to be a major battle, with Democrats and labor unions against it and Republicans and major business and trade groups supporting it.

The proposal for the farm bill is not a negotiating tactic for the WTO talks. However, the European Union last month said the proposal was “not the final word,” and that “it is not possible for us to form a clear view from this proposal of what the administration’s negotiating approach will be.”

At the same time, though, “If we are to have a successful outcome to the Doha Round, the U.S. will need to propose more ambitious cuts and disciplines in trade-distorting domestic farm subsidies,” the trading bloc said.

“We had hoped the administration’s proposal for the new farm bill would signal this more clearly. But this is not the end of the story: further steps are not precluded by these initial proposals,” stated the EU, who also subsidizes its famers.

The office of U.S. Trade Representative Susan C. Schwab had no comment following Mr. Johanns’ remarks yesterday.

Mr. Johanns called the farm bill a “very important step” toward agriculture reform.

The 183-page plan includes a variety of other provisions, including funding to protect natural resources through such conservation programs as increasing the acreage limit on the Wetlands Reserve Program, new renewable energy funding, funding for partnerships with trade associations to share the costs of overseas marketing, and promotional activities such as consumer promotions and market research.

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