WTO Agriculture: Dynamite quotes from Congress, USTR, Ag Secretary on US agenda

Today was the Senate Agriculture Committee hearing, as well as a House Agriculture Committee News Conference on the prospects for agriculture in the ongoing Doha round negotiations. USTR Rob Portman and Agriculture Secretary Mike Johanns participated in both events.

Please find some of the highlights from our notes in the following document.

Highlights:

1. U.S. Congress, not Geneva, sets U.S. Agriculture Policy Say prominent Congresspeople (So beward what USTR says versus what it can deliver.)

Rep. Bob Goodlatte (R-Va.), Chair of House Agriculture Committee, at Sept. 21 2 PM News Conference: "You can't write the next farm bill in Geneva. We will work in close consultation with them. Things agreed in Geneva can affect us, but the Congress will write the farm bill as we always have."

USTR Rob Portman, at Sept. 21 2 PM News Conference:"Yes, we do not need the chairman to say that. As a former member of Congress, I know that U.S. agricultural policy is set in the agriculture committee, not in Geneva."

"Congress Daily showed people like the 2002 farm bill at your talks. Farmers are disappointed with trade agreements but they like the 2002 farm bill. Do you have domestic support for DDA?" -- Sen. Saxby Chambliss (R-Ga.), Chair of Senate Agriculture Committee at Sept. 21 hearing

"We are suffering from trade fatigue. We overestimate the goals of the trade agreements. Farmers are a little suspect of free trade. I hope we can get agriculture groups to focus on getting market access instead of demanding special treatment."

-- Sen. Pat Roberts (R-Kan.), Member of Senate Agriculture Committee

Sen. Saxby Chambliss (R-Ga.), Chair of Senate Agriculture Committee at Sept. 21 hearing: "While the President's statements at the United Nations last week called for the elimination of, "all tariffs, subsidies and other barriers to the free flow of goods and services as other nations do the same," by 2010, we must be careful to do so while also providing a stable and secure safety net for America's farmers and ranchers. I believe it is possible to promote trade liberalization and reform of our domestic support programs at the same time, but we must do so very carefully while being mindful of what future programs will replace the ones we are eliminating. The Administration must make sure farmers and ranchers at the grassroots support its trade agenda."

2. Domestic Subsidies: Congress sees Bush promise of domestic subsidy elimination as unrealistic, won't cut at all unless others do at least as much in real terms. USTR lauds "box shifting" and baseline increases

Last week Bush said that he is ready to eliminate all subsidies if others do the same. [*] Bush is ambitious, and I am concerned that these statements do not reflect what is possible in domestic politics and current round." -Sen. Saxby Chambliss (R-Ga.), Chair of Senate Agriculture Committee at Sept. 21 hearing

"In the July 2004 framework, the goals were to 1. Expand market access (Brazil, ASEAN, EU, and Japan especially need to open more); 2. Eliminate export subsidies; and 3. Reduce trade distorting agricultural subsidies around the world. On this last point, we would only agree to this if progress is made on the other aspects. [*] We are pushing up close to our limit, since 1995, we have increased our support. We need to make sure that DDA is fair, and that we have tangible results for our farmers. We need to be sure we get more market access. But those who subsidize more should reduce more."-- USTR Rob Portman, Sept. 21 Senate hearing.

"I support DDA, but it is clear that we will pretty drastically reduce our support under the Amber and Blue boxes*That's why I want to move our supports to the green box* Unless we increase it before farm bill, we will be limited in how much we can pay. We're going to have to make some serious changes in the next farm bill in order to comply with WTO * we need to increase our spending to increase our baselines. How are we going to support our farmers in the future if we don't do this?"

-- Sen. Tom Harkin (D-Iowa), Ranking Member of Senate Agriculture Committee

Answer to Harkin: "Other items we are looking at: Working lands conservation. People have agreed with Harkin. We need to build that into next farm bill. Crop insurance * another idea. Direct payments can be made without running afoul of WTO rules. [*] This approach to farm policy dates back 70 years to the time of the depression. Some of the same tools we used then are trying to be fit into today's world. It won't work. We need to be creative in our supports, as the status quo has high risks." -- Agriculture Secretary Mike Johanns, Sept. 21 Senate hearing.

"Our farmers recognize the importance of trade. They are worried about WTO members that litigate rather than negotiate and attack our commodity support programs. In Uruguay Round, these programs were considered WTO compliant. Farmers need to know that the US government will stand by programs that were authorized to continue in the farm bill. They're disappointed in attacks on our programs, and in continued demands by the EU that we change our programs without them providing new market access to our products. Fairness is a two-way street. We know you met with EU officials earlier this month, and we want to keep hearing about progress. Portman, we are hoping that you will provide assurances that moving ahead on DDA will not trade away the farm. The price of fuel and fertilizer is high. These are the most effective and efficient in the world. What specific steps are you taking that market access benefits will be equal to the subsidy and support reductions?"

-- Sen. Blanche Lincoln (D-Ark.), Member of Senate Agriculture Committee

"If you moved away from the amber box towards the blue or green box payments, it's be cause we face increasing pressures and costs in meeting the regulations our government imposes - these regulations benefit the folks living downriver or downstream, so it is appropriate for government to look a the helping the high cost of doing that. So we won't rule out any possibility about how the next farm bill will be written or what assistance we will give farmers and I certainly will defend giving assistance to farmers like conservation." * Rep. Bob Goodlatte (R-Va.), Chair of House Agriculture Committee, at Sept. 21 2 PM News Conference

"Framework agreement's "graduation process" is a positive development. Move support from amber to blue to green. Box shifting is a good thing."-- USTR Rob Portman, Sept. 21 Senate hearing.

3. Export Subsidies: USTR and Congress Insist that Food Aid is not an Export Subsidy

"I am concerned that the EU is trying to push our food aid program from food to cash. This will be a sore point if we have to move from food aid to cash. Dictators siphon off money. When NGO's get food, it actually gets to people. Fischer Boel might fight about it though. [*] Portman, please focus on the issue. Fischer Boel from the EU is after us to go after food for peace program. They converted their program to cash. I am concerned that the EU is pushing this. Is there any way to get other countries in LDCs who have benefited from the food for peace program to support us?" -- Sen. Tom Harkin (D-Iowa), Ranking Member of Senate Agriculture Committee

Answer: "I agree that the program needs to be defended. Others besides EU (Switzerland, Australia) are also against it. Some of Africa's nations, these ministers will be our coalition, and NGOs are helping. Cash sometimes get siphoned off. There is lots of evidence. There is a lot of concern that we need to get food to people quickly. We need more food aid, not less. EU has reasonable concern that food aid should not displace commercial sales. We currently do not. Our agriculture exporters would object if that were true. They are not wasted shipments. We need to oppose the EU position strongly. Global food aid shipments are not even filling current need. We can make an LDC / NGO coalition." -- USTR Rob Portman, Sept. 21 Senate hearing.

"I am concerned about case by Brazil and food aid programs. I am concerned about EU's perception that we use food aid as a dumping ground. This food is a difference b/t a boy or girl going to a Wahhabi school with an AK-47 and getting to go to school. How would you characterize? We are NOT GOING TO LESSEN FOOD EXPORT PROGRAMS AND NOT GO TO CASH." -- Sen. Pat Roberts (R-Kan.), Member of Senate Agriculture Committee

Answer: "I agree with Harkin. It would be bad to cut food export program. I think there is some need to explain our program and that it does not displace our commercial farmers. Thanks for standing up for it. EU's radical rules changes would not be in the interest of our farmers." -- USTR Rob Portman, Sept. 21 Senate hearing.

4. Market Access: Splitting Country Blocs and Differentiating between applied and bound tariff concessions

"Is there a way to have rapid analysis of market access benefits in terms of applied and not just bound tariffs? Could you provide this to members of this committee and the negotiating team?"

-- Sen. Max Baucus (D-Mont.), Member of Senate Agriculture Committee

Answer: "Yes, we will do this."

-- Agriculture Secretary Mike Johanns, Sept. 21 Senate hearing.

"The major growth opportunity for our farmers is opening up China and India." -- Agriculture Secretary Mike Johanns, Sept. 21 Senate hearing.

Expressing concern about high bound tariff among trade partners, Portman cited EU and India. -- USTR Rob Portman, Sept. 21 Senate hearing.

"Our talks are stalled. We are consulting with the Hill, and building coalition with other partners to put pressures on LDCs on market access. Other countries are looking for moves on our part on subsidies in exchange." - USTR Rob Portman, Sept. 21 Senate hearing.

5. Overall prospects for Doha Round: spinning down expectations

"The U.S. should not accept a deal in Hong Kong unless it provides tangible benefits to our farmers. No deal is better than bad deal." -- Sen. Saxby Chambliss (R-Ga.), Chair of Senate Agriculture Committee at Sept. 21 hearing

"No final deal will be made at Hong Kong. But we can make some progress, and avoid the Seattle and Cancun problems. We hope meeting is successful in Hong Kong. [*] In terms of the timeframe, by end of 2006, we hope to complete this. In 2007, we have farm bill and TPA expires * so we want to avoid more DDA at that point. July 2007 will be tough. By the beginning of 2007, we want to send a good deal for our farmers to Hill."

-- USTR Rob Portman, Sept. 21 Senate hearing.

"Final product WILL NOT HAPPEN IN HK, but with modalities that will allow 2006 progress." -- Agriculture Secretary Mike Johanns, Sept. 21 Senate hearing.

6. Comments on recent U.S.-EU minister level meetings with Mandelson and Fischer-Boel: Arriving at nothing

"We are making progress in all areas of DDA. We have had good meetings with EU last week. We put our cards on the table for first time in a while. Moving forward, we need to know what tariff formula might be, and how we will deal with safeguards and other sensitive issues." -- USTR Rob Portman, Sept. 21 Senate hearing.

7. Other: Congress in no mood for trade; geographic indicators; etc.

On Geographic Indicators: "We differ from our EU trading partners. We will continue to promote enforcement of IP rules, trademarks, and copyrights. We are open to hearing from agricultural groups on this. The US position needs to be better explained, and work with other countries that share our concern. Australia has been a leader with us." -- USTR Rob Portman, Sept. 21 Senate hearing.

Why countries need domestic food and farm programs: "At same time, I wanted to let you know that I had meeting with catholic bishops, including DC bishops and others from hemisphere. These people are not protectionists and understand the global economy. They are also leaders in the oldest multinational that we know. They say there are winners and losers in trade agreements. We are concerned about what happens to small farmers that have been displaced after centuries of work."

-- Sen. Ken Salazar (D-Colo.), Member of Senate Agriculture Committee

"Why do we have so much discussion about foreign policy? * these are trade agreements." -- Sen. Craig Thomas (R-Wyo.), Member of Senate Agriculture Committee

"Everyone knows we're committed. Do they take advantage of that?"

-- Sen. Jim Talent (R-Mo.), Member of Senate Agriculture Committee

Answer: [dismissively] "It's a challenge."

-- USTR Rob Portman, Sept. 21 Senate hearing.