US farm subsidies clash with WTO leadership

01-08-2007 | | |
Van Der Sluis

It is great news for the farmers in the USA. The first step to a new farm bill has been set. This means that over the next five years US farmers will receive 286 billion dollars extra from the government. The subsidy will cover the difference between the market price and the negotiated minimum price for their products.

It is great news for the farmers in the USA. The first step to a new farm bill has been set. This means that over the next five years US farmers will receive 286 billion dollars extra from the government. The subsidy will cover the difference between the market price and the negotiated minimum price for their products.
The basic structure of the subsidy system has not changed, except that farmers with turnover of over one million dollars will be exempt from receiving subsidies. I can understand that the president of the America’s National Farmers Union, Tom Buis is very happy with the new law. His organisation has always been a strong defender of direct support to farmers. He expressed in an interview that as of the start members of the Congress only had the needs of the domestic farmers in mind and did not care about the WTO rules. Why does that not surprises me?
The law passed the House of Representatives right at the moment that Canada and Brazil dropped a complaint about existing US farm subsidies at the WTO desk. It is expected that WTO will soon come up with a conclusion, which can, based on previous verdicts, only lead to a condemnation of the country that always strives to take the leading role in free trade issues.
As soon as the bill has been passed the world can no longer accept a US leadership in the WTO. And comments from the US government or industry leaders regarding foul play by other countries cannot be taken serious anymore.
If home land first again becomes the standard, there is little justification to plea for free trade. The US already has a history in this regard, for instance free trade in poultry products, but is the US now showing their true colours, in that keeping their borders closed for the import of poultry products is not just a sanitary issue. In this respect the subsidy bill shows the real face of the US leaders.
Do we have to be sad about this? I don’t think so. A lot of things can now been placed in a better and clearer perspective. We all may wonder whether this is the end of the WTO or the beginning of a new era in international trade in which homeland security becomes a much wider definition. One thing is very clear: By accepting the new subsidy rule the US has lost its credibility as WTO leader and as guardian of free and fair trade.




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