Veneman: WTO Prospects Brighter

The prospects for success in the World Trade Organization negotiations to liberalize global trade are now becoming somewhat brighter. The new momentum again provides some hope for achieving historic progress in international trade.

Ministers from 146 WTO member nations will gather Sept. 10 in Cancun, Mexico, to take stock of the current round of negotiations, the Doha Development Agenda, and map the course to the scheduled conclusion of the negotiations in 2004.

A successful conclusion to the Doha Round, named for the capital of Qatar where talks were launched two years ago, would yield enormous benefits worldwide, especially for highly competitive American farmers and ranchers.

That’s because the continued success of American agriculture is tied to open markets. We consistently produce far more food and fiber than we consume domestically. As a result, we need access to the consumers in foreign markets. Today those consumers already purchase the output from one-third of our farm acres, accounting for 25 cents of every dollar of sales from our farms and ranches.

Gaining greater access to foreign markets will build a more secure economic future for American agriculture. Lowering agricultural trade barriers will increase trade and raise farm incomes. This not only expands opportunities for farmers but benefits the entire American economy with more jobs, especially in rural areas.

The fastest growing markets are in developing countries where a middle class is emerging with growing purchasing power. It is estimated that by 2020, developing countries will account for more than 85 percent of global demand for grains and meat.

But developing countries have some of the highest barriers to trade. Lowering those barriers will not only provide a boost for U.S. agricultural exports, but developing countries will benefit from reforms that enhance their own competitiveness and income growth. This is a win-win outcome.

To gain access for our producers to these market opportunities, tariffs must be reduced. We argue that our markets are already relatively open. The global average agricultural tariff is 62 percent, while U.S. agricultural tariffs average only 12 percent. We simply want others to offer us the same competitive opportunity in their markets that we give them.

But expanding market access is only part of the equation. We also have to tackle unfair competition and trade distortions from export and production subsidies provided mostly by developed nations.

We are prepared to shoulder our share of the responsibility. We have led the way with ambitious proposals addressing not only market access but also export subsidies and domestic supports. We are willing to make our farm programs less trade-distorting, but only when the European Union and other countries reduce their supports to more commensurate levels.

Over the past month, our negotiators have worked tirelessly to break the impasse in the agriculture talks that threatened to stall the entire Doha Round. Other countries in the negotiations asked us to engage the EU and bridge our differences.

We did so, and it had the desired catalytic effect. About a half dozen new proposals have been advanced for critique and discussion. As a result, a draft text has been produced for consideration by ministers in Cancun that contains the core concepts of the U.S.-EU framework agreement.

This framework is practical, although not perfect. It addresses our three major objectives for the current agriculture negotiations: continuing to expand market access, reducing disparities in the levels of support and protection provided by different countries, and bringing the developing countries more fully into the global trading system. 

We are now at a critical juncture in the Doha Round negotiations. We urge other reform-minded countries to work with us in Cancun to develop a consensus around the framework we have proposed.

We have not scaled back our ambitions for the negotiations: significant reductions in barriers to market access and domestic supports, and elimination of export subsidies.

Cancun offers a real opportunity to transform global agricultural trade, and current geopolitical conditions make this the right time to reach an agreement. The benefits of seizing this opportunity for American agriculture, and for billions of people around the world, will be significant and enduring.

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