The National Farmers Organization says that proposals being discussed at the World Trade Organization to slash agricultural subsidies and tariffs could drive many U.S. farms and ranches out of business.
The group certainly won’t be disappointed if the Dec. 13-18 summit collapses, like previous WTO meetings in Cancun, Mexico and Seattle, said Eugene Paul, a policy analyst with the association.
"Our trade negotiators just keep giving away our farm programs," Paul said.
Portman proposed Oct. 10 to cut U.S. farm subsidies and tariffs as part of trade liberalization efforts in the WTO’s "Doha round," which was kicked off in 2001 in Qatar to pay special attention to the concerns of developing nations.
Poor countries complain that tariffs and farm subsidies in the U.S., EU and other wealthy nations block their exports of agricultural products such as cotton, corn and sugar, which are vital to their economies.
But Portman insists that U.S. farmers will also benefit from freer global trade. In return for giving up subsidies and other protections, they would gain access to crucial foreign markets like the European Union that have been largely closed, he says.
"We are being very frank with our farmers and ranchers, saying we understand their concerns and want to work with them," Portman told The Associated Press.
"But we think that, at the end of the day, if this all comes together, it will be quite beneficial to American farmers and ranchers because we have some of the most productive land in the world," he said. "We’ve shown we can compete if there is a more level playing field."
U.S. consumers would also gain, as lower tariffs mean lower prices on food imports such as butter, milk, cuts of meat and many other products that are now priced higher because of prohibitive tariffs.
If free trade existed in farm products, Americans would pay about 90 cents (76 euro cents) for a pound of butter, according to analysts. At a grocery store in Edgewater, New Jersey, a pound of store-brand butter was selling for $4.59 (euro3.89) this week.
All that adds up. Figures from the Organization for Economic Cooperation and Development show that each U.S. household of four spends more than $600 (euro510) a year because of tariffs which cause higher prices on farm goods and taxes that go to subsidies.
At issue in the trade talks are subsidies considered the most "trade-distorting" because they allow farmers to sell their grain more cheaply on the world market than farmers whose countries don’t subsidize them.
The United States spent $21.5 billion on such "trade-distorting" subsidies in 2001, the last year for which the U.S. Department of Agriculture provided figures to the WTO.
In the proposal Portman unveiled last month, the United States has offered to eliminate government export subsidies for U.S. farm products by 2010. It’s also proposing to reduce by 60 percent the amount of trade-distorting domestic support the government provides U.S. farmers over the next five years.
Corn and soybean farmers, who like many growers are dependent on government subsidies, would be hit especially hard under such cuts, Paul said.
A large portion of their crops are exported, especially soybeans, according to the U.S. Department of Agriculture’s monthly crop report. Out of 11 billion bushels of corn expected to grow this year, the U.S. is expected to export about 1.9 billion bushels, and 1.02 billion bushels of soybeans out of 3.04 billion bushels expected this year.
Democratic Senator Byron Dorgan reflected the mood of some in U.S. Congress when he said recently that U.S. negotiators are "prepared to negotiate away the protections that we have in this country for domestic producers against unfair foreign trade."
Liberalizing farm trade is an emotional issue around the world _ so much so that the WTO’s Doha round has ground to a virtual halt because the EU, U.S. and developing nations cannot reach a consensus on how much to open up their respective agricultural markets.
Many negotiators have blamed the EU for the impasse, saying it needs to offer bigger subsidy and tariff cuts. But Japan and South Korea, who have come under less fire, also heavily protect their rice markets.
As a result, some fear that the Hong Kong meeting, once billed as a key deadline for drafting a framework that would allow ministers to complete a global trade treaty by next year, could collapse — and even scuttle the whole Doha round.
Portman thinks that’s unlikely.
While he doesn’t expect major breakthroughs at the summit, Portman believes negotiators will make "incremental" progress that will lead to a binding trade agreement next year.
"I think it happens because the alternative is so bad — the alternative is turning our backs on the WTO and the multilateral trading system," Portman said.
The effective deadline for a deal is July 2007, which marks the expiration of the current "fast-track" authority that allows U.S.
trade envoys to negotiate without excessive congressional interference.
Meanwhile, the slow progress on WTO talks has prompted the U.S.
and other countries to pursue bilateral and regional free trade agreements.
"The United States will move ahead aggressively" on such trade pacts, Portman said, adding that he believes these deals will help bump along the broader WTO negotiations.
Many trade experts disagree, saying they remove the urgency for _ and possibly complicate _ a global trade deal.
"These regional agreements are not a good substitute for the multilateral round because you can’t realize liberalization on a larger scale," said Alexander Sarris, director of the U.N. Food and Agriculture Organization’s commodities and trade division.
"The regional agreements are much more imbalanced," he said.
"The largest players have more advantages."
