Wheat Interests Warn Against Geneva Policy-Making

July 5, 2000

U.S. wheat interests are urging the Clinton Administration to make sure farm policy is written in Washington, not during international trade negotiations in Geneva. Since it is impossible to predict the outcome of either the next U.S. farm bill, in 2002, or the next round of World Trade Organization negotiations, "we strongly urged the Administration to maintain the broadest flexibility of action on this politically sensitive area," said the National Association of Wheat Growers and U.S. Wheat Associates.

"In the critical area of domestic supports, we asserted that the United States should seek to eliminate the inequities that persist between U.S. levels of support and those of our competitors, especially the European Union. It is imperative that the United States avoid any effort to apply a `one size fits all’ solution to reductions in trade-distorting domestic supports," the groups said.

The supplemental transition payments made in 1998 and 1999 were provided by the government to offset unexpected economic and weather related disasters and are decoupled from production and trade. "As such, we believe they should be notified as `green’ or non-trade-distorting to the WTO, and should not be counted against the ... cap on amber programs (those requiring discipline) in the U.S. Uruguay Round Agreement commitments," they added.

Although the United States announced its agricultural negotiating position in Geneva, the proposal does not include WTO notifications on U.S. domestic farm subsidies. According to Foreign Agricultural Service Administrator Tim Galvin, the United States decided to put off until the end of the year its decision on whether or not to classify the 1998 supplemental Freedom to Farm (AMTA) payments as trade distorting.

Christopher Shaffer, the wheat growers’ WTO specialist, contacted the U.S. trade representative’s office on behalf of wheat producers. "We restated the view that the United States should establish as its highest priority, the total elimination of direct export subsidies," says Shaffer. "Directly related to the issue of export subsidies is the issue of state trading enterprises (STEs). We urged the United States to seek to eliminate state trading export monopolies by negotiating rules that end the state supported export monopoly powers of the Canadian Wheat Board and the Australian Wheat Board, Ltd."

The Europeans, he adds, can be expected to use the next several months, while the U.S. is occupied with the upcoming presidential and congressional elections, to attempt to advance their own agenda. "We will be especially vigilant during this period," says Shaffer.