Scher Calls Export Subsidy Elimination a WTO Priority

November 19, 1999

Peter Scher, special trade ambassador for the U.S. trade representative's office, says one of "our biggest priorities" in the upcoming World Trade Organization negotiations is to eliminate agricultural export subsidies, 85% of which are being used by the European Union.

In an interview with the American Farm Bureau Federation, Scher says agriculture "still remains burdened by disparities in how the world trading rules are treated." The Seattle WTO meeting and the continuing next round of negotiations "is about setting the agenda" for enhancing competition in farm product trade worldwide, he adds.

U.S. farmers face low prices partly because of the European Union's Common Agricultural Policy, Scher adds. The CAP "pays farmers to overproduce and then uses exports subsidies to move those prices onto the world market which further depress world prices."

Scher disagrees with the argument that the WTO's dispute settlement process doesn't work adequately because the EU does not implement trade dispute rulings.

"I think there is a misperception that the dispute settlement process has not worked," he says. "When we have won cases against countries like Japan, the Philippines, North Korea, these countries have worked out a solution within the time frame specified." And the EU now has $300 million in yearly economic sanctions to face from U.S. retaliation.