US action major blow to world trade deal

PROSPECTS of a world trade deal have been dealt a blow by the US Congress and Senate, which paid little attention to the trade negotiations by overwhelmingly supporting a $285 billion Farm Bill which experts believe has increased trade-distorting supports on 17 out of 25 commodities policed by the World Trade Organisation.

“Trade partners are going to be incensed, and we would expect them to protest in every way they can,” admitted Chuck Conner, the deputy US agriculture secretary.

Bruce Knight, US Department of Agriculture Under Secretary for Marketing and Regulatory Programs, said, “We could have adjusted the farm bill so it was more WTO compliant and better corrected to reduce the deficit.”

According to the Wall Street Journal, the bill will do little to lift global trade talks, already bogged down in disputes over slashing farm subsidies. Trade minister Simon Crean, representing another world trade heavyweight, Australia, said he was dismayed at the increase in farm support proposed.

Congress, which is controlled by the Democrats, showed the US is not serious about reforming its agriculture. As a result, even if a trade deal is agreed, getting it past the US Congress has now emerged as a major new hurdle, because the Farm Bill offers proof that Congress is eager to protect American farm programmes, and might try to obstruct or dismantle a trade deal — as it did earlier this year with a bilateral trade deal with Colombia.

Of the $285 billion Farm Bill spend, $36 billion to $40 billion is for farmers over 10 years, and the rest is for nutrition programs and for conservation and energy programs.