Conaway, Peterson: U.S. must challenge foreign ag subsidies
June 5, 2015
House Agriculture Committee Chairman Michael Conaway, R-Texas, and ranking member Collin Peterson, D-Minn., said Wednesday that the U.S. government should hold foreign countries, especially advanced developing countries such as Brazil and China, accountable when they violate their commitments on farm and export subsidies.
"While we were busy writing the 2014 farm bill, which achieved significant reforms and savings, our biggest foreign competitors were increasing to new heights their already high subsidies, tariffs, and other trade barriers," Conaway said after a hearing to review farm subsidies in other countries.
"This harms our farmers and ranchers, it harms our economy, and it costs America jobs," he said.
"That's why the U.S. government must hold our trading partners accountable when they violate their trade commitments. We cannot allow foreign government subsidies, tariffs, and other barriers to free trade to continue at the expense of America's farmers and ranchers."
In an opening statement, Conaway also noted that when trading partners do not follow the rules, "America's farmers and ranchers lose faith in trade agreements."
"Given the current debate over trade promotion authority, it is safe to say that free trade cannot afford to lose the support of American agriculture." he said. "The United States government must enforce our trade agreements."
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Peterson added in an opening statement, "I am concerned that some of these so-called advanced developing countries have started to increase their subsidies and are arguing that we should push ahead with negotiations in the Doha round."
"I'm not sure it's fair that developing countries, no matter how advanced, can designate themselves for special treatment."
Noting testimony from witnesses, Peterson said, "I think it is time for the United States to start challenging Brazil, China, India and others when they fail to meet their WTO [World Trade Organization] commitments."
The committee heard testimony from Craig Thorn, a partner in DTB Associates, who is a former U.S. Foreign Agricultural Service officer and trade negotiator, and Darren Hudson, holder of a chair named for former House Agriculture Committee Chairman Larry Combest, R-Texas, at Texas Tech University in Lubbock.
Thorn presented a study that he had conducted for several agriculture groups showing that Brazil, China and other advanced developing countries have increased subsidies in recent years. (See link)
"The United States, as the biggest agricultural exporter, suffers most from these distortions," Thorn said.
He added that he believes it would be "extremely foolish" for the United States to agree to restart the Doha Round of trade talks without a plan to put restrictions on the policies that cause the distortions.
In his testimony, Hudson said, "Clearly, the U.S. provides support to agriculture, but that support is orders of magnitude smaller than support provided by other major producing countries [or] regions."
Conaway and other members expressed particular frustration with China's subsidization of cotton, which has resulted in stocks at historic levels and prices nose-diving.
"The U.S. government must work to address these problems through the WTO, and it must also stand by America's cotton farmers while the situation is made right," he said.
Conaway also noted that there have been reports that Brazil, which won a case against the U.S. cotton program, is deliberating a challenge to U.S. corn and soybean subsidies.
"Brazil's case against U.S. cotton policy was without merit from start to finish, but the WTO was determined to rule in Brazil's favor no matter the rules or the facts," Conaway said.
"The WTO must now work to right that wrong by being vigilant and wary in regard to Brazil's latest saber rattling, and the U.S. must defend its farmers in a world where trade manipulation and distortions by foreign governments often come at the expense of America's farmers."
–The Hagstrom Report