Q: What is the U.S. goal for agriculture in these negotiations?
A: Our goal is to help American farmers compete on a level playing field in the global marketplace. We are proposing an ambitious package of reforms that focus on lowering tariffs and reducing trade-distorting domestic support in agricultural trade. By lowering barriers to U.S. exports and reducing competition from subsidized products, we hope to create a trading environment where U.S. agriculture will excel.
Q: What is the gist of the U.S. proposal for agriculture in the negotiations?
A: The proposal outlines a two-phase approach to agricultural trade reform. The first phase eliminates export subsidies and reduces worldwide tariffs and trade-distorting domestic support over a five-year period. This would be accomplished by harmonizing tariffs and trade-distorting domestic support at substantially lower levels than what is currently allowed. The second phase is the eventual elimination of all tariffs and trade-distorting domestic support.
Q: What is the time frame for the proposed reforms?
A: We are proposing a five-year implementation period for phase one, which would begin after the negotiations have concluded. Based on the timeline outlined in Doha, reductions would begin on reducing export subsidies, tariffs, and allowed level of trade-distorting support in 2006 and be phased in through 2010. The timeline for phase two - the elimination of all tariffs and trade-distorting support - will be established in this negotiation.
Q: Why are we doing this now?
A: In November of last year, WTO members launched the Doha Development Agenda, a wide-ranging set of negotiating goals for liberalizing global trade among World Trade Organization members. The Doha agenda solidified the importance of agricultural trade and its role in maintaining world prosperity and unity. In the Doha negotiations, we agreed to an ambitious agenda and timeline for reform in agriculture. Specifically, we agreed to substantially improve market access, to reduce, with a view to phasing out, export subsidies, and to substantially reduce trade-distorting domestic support. We also agreed to establish the method for reaching our objectives by March 2003.
Because this is a fairly tight time frame, the negotiations are moving very quickly. The United States wants to be the leader in framing the terms of these negotiations to ensure the best possible outcome for U.S. farmers while ensuring that all countries have a chance to compete in an open and fair marketplace.
Q: Why do we care about trade in agriculture?
A: As our food and fiber producers are keenly aware, U.S. agriculture depends on world trade more than any other sector in the U.S. economy. Dollar for dollar the United States exports more corn than cosmetics, more wheat than coal, more bakery products than motorboats, and more fruits and vegetables than household appliances. Overall, 25 percent of all cash receipts for agriculture come from export markets. For wheat alone, export markets account for almost 50 percent of cash receipts.
But that=s only part of the story. U.S. agricultural exports also generate jobs and expand economic activity well beyond the farm gate. Last year=s $53 billion in export sales resulted in an overall economic gain of $127 billion, while generating more than 800,000 jobs. It is imperative to the health and longevity of U.S. agriculture that our negotiations are successful.
Q: Is agricultural trade liberalization really a good idea?
A: Agricultural trade reform benefits all countries through increased market opportunities, which translate into increased exports and increased incomes. Research shows that removing barriers to trade increases global exports by nearly 30 percent.
Q: What approach does the United States expect to take toward liberalization of non-agricultural products? Will it mirror the approach for agricultural products?
A: The United States is intent on pursuing significant liberalization on non-agricultural products. We anticipate making, in the proper forum, negotiating proposals that reflect our interest in non-agricultural liberalization. However, these proposals will not necessarily reflect the same tariff reduction methodology put forth in our agriculture proposal.
Q: How does this proposal help developing countries?
A: The United States has heard the calls of developing countries in these negotiations. We understand that countries will not reduce tariffs unless developed countries also reduce tariffs and trade-distorting support. That is why it is so important to negotiate a comprehensive package that addresses distortion in all three areas of market access, domestic support, and export subsidies.
Developing countries will benefit from tariff reductions, particularly the focus on reducing high tariffs, because it will open new markets for their products in both developed and developing country markets. Elimination of export subsidies, which developing countries do not use and cannot afford, will get rid of unfair competition from developed country exporters. Continuation of export credit and food aid programs will ensure a safety net remains for countries with financing difficulties or the inability to provide adequate food for their people. Reducing trade-distorting domestic support, which developing countries use only sparingly if at all, will improve the competitive situation of producers in developing countries. Moreover, we are open to discussions on identifying specific support programs oriented towards subsistence, resource poor and low-income farmers as exempt from subsidy limits.
Main Page: U.S. Proposal for Global Agricultural Trade Reform
Background on the current round of WTO