Senate Finance Committee Chairman Chuck Grassley voiced support of a Trade Promotion Authority extension, potentially coupled with a one-year farm bill extension in comments to the Agribusiness Club of Washington this week.
"If a breakthrough doesn't happen - and very soon - I just don't see any way of getting the Doha Round done in 2006. The Doha Round negotiations have to be done by the end of 2006 to meet the deadline of Trade Promotion Authority, which expires in July 2007," says Grassley. "But given protectionist views in Congress, I doubt we'll be able to extend it past July 2007."
Grassley says TPA extension might gain greater support when paired with an extension of the current farm bill.
The United States offered a 60% subsidy reduction if others are willing to provide greater market access. USDA estimates that getting rid of market-distorting agricultural protection could increase the value of U.S. agriculture exports by at least 19%.
The average bound world agricultural tariff is 62%. The average U.S. bound agricultural tariff is only 12%. The average applied agricultural and food tariff of Brazil - a leader of the G-20 - is 5%. "That's more than twice as high as the average applied agricultural tariff of the United States," he explains. "India, another G-20 leader, applies tariffs to agricultural and food products that are more than 20 times higher than those of the United States."
Grassley warns that the Doha Round is a "once-in-a-generation opportunity to significantly reduce the barriers that impede agricultural trade. If it fails, I don't see the stars aligning for another multilateral trade breakthrough for agriculture for possibly years and years."