No Deal Better than Poor Deal

Groups, congressional members voice support behind failure of Doha trade talks. Jacqui Fatka

Published on: Jul 25, 2006

U.S. producer groups and Congressional members gave positive feedback after Monday's suspension of world trade talks. It became clear from talks that world members were not willing to offer increased market access in exchange for deeper U.S. domestic subsidy cuts.

Secretary of Agriculture Mike Johanns explained the European Union's approach to beef imports provided a perfect example of how countries wanted to create more loopholes to prevent true progress in this round of negotiations. EU's current tariff on high quality beef is 80%. Johanns explains under the tariff proposal, EU's tariff would be 61%. He adds EU wanted to designate beef as a sensitive product, which would allow a tariff rate quota be put in place.

"So we got to probing about how much beef was that? How much beef would the world be able to sell into the European Union?" Johanns say. "The answer to that was 160,000 metric tons. That's about 2% of their marketplace. That is virtually no market access. That is saying to the world that all of you get to divide up 160,000 metric tons."

Johanns also explained that the developing countries tabled a proposal that didn't provide any flexibility. China, South Korea and Brazil all classify themselves as developing countries, although they can not only effectively compete with the United States, but with the rest of the world, he states.

Their proposal essentially allows them to protect 95 to 98% of their ag marketplace, Johanns says. "It basically gives the developing countries a pass on market access. They would have the ability under their proposal to say when they would deal with us, how they would deal with us and what products they would deal with us on," he says.

U.S. producers not abandoned in negotiations

Across the board organizations fully supported the decision of President Bush and his top trade officials to refrain from supporting a less than ambitious agreement in the WTO Doha Round.

"The National Sorghum Producers believe that no deal is better than a bad deal. NSP appreciates our negotiators commitment to stand with U.S. producers," says NSP Director and USDA Agricultural Trade Advisory Committee Member Dale Artho.

"We are very pleased the United States did not succumb to pressure from India, the European Union and other trading partners who want a Doha 'lite' deal," says National Pork Producers Council President Joy Philippi, a pork producer from Bruning, Neb. "Thankfully the president and our trade officials have the best interests of U.S. agriculture in mind. Although trade talks are suspended, we hope they will get back on track soon. Pork producers need an aggressive outcome in market access especially with Japan and the EU."

A statement from Gregg Doud, National Cattlemen's Beef Association chief economist, relays beef producers are "frustrated by the collapse." He adds, "The fact that the EU isn't interested in providing anyone, including the United States, additional access into their market smacks of pure protectionism. Protectionism was the reason the European Common Agricultural Policy concept was established decades ago. It is what we fought against in the Uruguay Round, it is the reason U.S. beef is locked out of the EU, and it is the reason for [Monday]'s collapse of the Doha Round of WTO negotiations. Revisiting these negotiations serves no purpose until the EU comes forward with a meaningful agricultural market access and tariff reduction proposal."

Senate Agriculture Committee Chairman Saxby Chambliss, R-Ga., states, "The World Trade Organization is not a debating society. If the Europeans are serious about the negotiations, they will take advantage of this cooling off period and come back with a proposal that significantly reduces tariffs in developed and developing economies. The United States will not negotiate with itself in an endless cycle that builds barriers between trading partners."