WTO explained at Farm and Ranch Show

By MONETTE TAYLOR | South Central Texas Edition

Dr. Parr Rosson helped producers and others at the Corpus Christi Farm and Ranch Show wade through the "legalese" of the international trade situation. -- Staff photo by Carolyn Rost

Jan. 27, 2005 - The fact that the United States has more rules concerning international trade is not a surprise to anyone, but according to Dr. Parr Rosson, professor and director of the Center for North American Studies at Texas A&M University (TAMU), that doesn't take away the fact that the U.S. plays one of the most important roles in trade.

Speaking to a group at the Corpus Christi Farm and Ranch Show earlier this month, Rosson helped producers and others wade through the "legalese" of the international trade situation under the World Trade Organization (WTO).

The WTO was established on Jan. 1, 1995, by the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). It is a specialized agency of the United Nations, and has 148 member nations. The headquarters are located in Geneva, Switzerland, and the goal of the WTO is to assist producers, exporters and importers conduct business with each other as simply as possible.

According to Rosson, the WTO is responsible for administering trade agreements, conducting trade negotiations, settling trade disputes, monitoring national policies and providing technical assistance and training.

The WTO, according to their website, is "an organization for liberalizing trade. It's a forum for governments to negotiate trade agreements. It's a place for them to settle trade disputes. It operates a system of trade rules." In other words, the WTO is where member governments go to try and "sort out" trade problems they face with other countries.

To U.S. agricultural producers, the organization's importance includes the ability to open markets, lower tariffs and eliminate import quotas, reduce trade distorting domestic support and reduce export subsidies. It, also, supports consistent use of animal and plant health regulations and enforces international trade rules.

One of the unusual things about the WTO is the group must come to a consensus on agreements, negotiations and trade disputes. While Rosson admitted the group sometimes gets "caught up in politics," it is really there to help producers and others do business.

A recent case-in-point is the dispute filed by Brazil against U.S. cotton. According to Rosson, the WTO-issued ruling ... appealed by the United States ... should have a final answer by March 3. Three people were appointed to a panel, by the WTO secretary, to hear the case, and three more were appointed to hear the appeal. None of those panel members could be from the United States or Brazil.

Rosson noted that China and the European Union are the "toughest members" of the WTO for the United States to deal with because of America's desire to do away with export subsidies. In 2000, ag tariffs ran an average of 62 percent in other countries, while the same tariffs in the United States averaged only 12 percent.

"The U.S. has the world's largest market and the lowest tariffs," explained Rosson.

In conclusion, Rosson noted the U.S. market is much more open than others, and with trade agreements, tariffs will fall, allowing the United States more access to foreign trade and markets will increase. This will offer U.S. producers more opportunities to work out agreements with other countries.