Europeans to Protest U.S. Programs

May 4, 2000

The European Union may raise questions about U.S. marketing loans and loan deficiency payments as trade-distorting subsidies, CONGRESS DAILY reports. The newsletter says EU agriculture commissioner Franz Fischler’s chief of staff raised the prospect of challenges to both marketing loans and export credit guarantees in the next round of world trade talks.

The United States has not, in fact, denied that marketing loans are "trade-distorting," at least within the meaning of the categories for farm programs established in the previous Uruguay Round of trade negotiations. The loans are reported as "yellow box," or trade-distorting, policies in formal submissions to the World Trade Organization. Since 1998, spending on the loans and related loan deficiency payments has exploded as crop prices have plummeted. But U.S. farm spending remained below the limits set by the Uruguay Round because of earlier cutbacks.