Agriculture top billing at recent trade meeting

By MONETTE TAYLOR | South Central Texas Edition

USDA's Hunt Shipman

June 6, 2002 -- "The allegations that this (new farm) bill provides a 70 percent increase in farm subsidies is absolutely false," according to Hunt Shipman, deputy under secretary for farm and foreign agricultural services under U.S. Agriculture Secretary Ann M. Veneman.

"It fails to recognize that in the last four years, Congress has provided an additional $30.5 billion of additional support, which averages about $7.5 billion a year. This new bill provides about $7.4 billion on additional support," he related.

Shipman opened the recent meeting held in San Antonio concerning the Free Trade Area of the Americas (FTAA), the World Trade Organization (WTO) and the new farm legislation. The meeting attracted officials from different countries, academic professors, agricultural economists, and international trade analysts.

"Trade is among this administration's top priorities," said Shipman. He related to the audience that this administration is very serious about expanding trade "globally, regionally, and bilaterally" and how the newly-set farm subsidies will affect trade.

Yet, it became increasingly apparent that all other countries aren't as excited about the new farm bill as some of the producers in the United States.

"Globally, the WTO, last November, with 140 nations including Mexico and Canada, agreed to launch a historic ground for WTO negotiation with agriculture at the center."

He said that the FTAA is the top, regional priority, and that there are many opportunities for stronger trade, reform, and economical advances and laws concerning trade.

According to Shipman, the United States is not only pursuing trade with developed countries, but with developing countries, and that many of these countries are ready to be partners if the United States is ready to accept them.

He said that the two-way trade with Mexico has doubled since 1993, and Mexico is the number two most popular destination for U.S. food companies "seeking international opportunities," with Canada in the third position.

"When President Bush and President Fox met, last year, they stressed the need to abide by provisions of NAFTA," said Shipman.

On Jan. 1, 2003, perhaps the biggest challenge with the U.S. trade relationship with Mexico will come when certain products will become free of tariff and quota. This provision was originally meant for pork and poultry, but is now to include other products.

"The United States recognizes the strength of the U.S., Mexico and Canada trade relationship as a link to success, so it's difficult to pick up a newspaper and see stories that say the relations between our countries are seriously strained because of the new farm bill," said Shipman.

According to Shipman, the new farm legislation has been a topic both here and abroad, and last fall, the administration put out a policy book called Farm Policy Principles: Taking Stock of the New Century to assist in explaining the new bill reasoning.

Shipman said the new farm bill is consistent with the WTO obligations, allowing the United States to spend $19.1 billion annually for certain types of support while Japan is allowed to spend $31 billion and $62 billion for the EU. Also, the average import tariff for the United States is 12 percent versus a 62 percent average around the world.

Brian Paddock, executive director for agriculture and Agri Food Canada said that while he agreed that better trade agreements are necessary, he felt like many of the committees regulators met to share information, but did not come up with workable changes. He was concerned about livestock provisions in the new farm bill, especially, the feeder cattle from the United States to Canada, and the impact on the North American meat market.

Jeffrey Jones, a senator from the state of Chihuahua in Mexico, wants his country to be considered as a "real business associate" and "to analyze the impact of such policy decisions in Mexico's development."

He said that he felt there were "double messages" concerning opening the markets and increasing subsidies. Also, that developing countries can offer agriculture, but little technology to other countries.

According to Jones, agriculture did make up 30 percent of the population, but that number is now between 18 and 20 percent, and U.S. agriculture makes up 2 percent. He believes when subsidies are created, the "big guys" get the money.

While the changes look good on paper, Jones said it really creates chaos in more under-developed countries, relating that agriculture is "out" in Mexico, but drugs are "in." Many of these drugs make their way into the United States.

Jones said "food is still the best business in the world," but doesn't know what is the best way to get the money to smaller farmers.

Shipman summed up the U.S. position on the new farm bill with a final quote from the administration: "The message of our farm legislation is that the United States will support its farmers, fully, while maintaining our WTO obligations."