IB10040 - Agricultural Trade Issues In the 106th Congress
27-Nov-2000; Geoffrey Becker Charles Hanrahan, and Remy Jurenas; 15 p.
Abstract: Agricultural interests have been following trade policy developments against a backdrop of weak foreign demand and large world supplies of agricultural products. The U.S. Department of Agriculture reports that the value of U.S. agricultural exports fell between FY1996 (a record year) and FY1999 by almost $11 billion. USDA forecasts agricultural exports at $50.5 billion in FY2000 and $51.5 billion in FY2001. However, the projected agricultural trade surpluses for those years, of $11.5 billion and $12 billion, would be less than half the FY1996 surplus of $27.2 billion. Many agricultural groups and their supporters in Congress believe that the sector's future prosperity depends upon such U.S. trade policies as : 1) encouraging China's entry into the World Trade Organization (WTO), with its binding rules and responsibilities; 2) exempting agriculture from U.S. unilateral economic sanctions; 3) fully using export and food aid programs; and 4) aggressively battling foreign-imposed barriers to the movement of U.S. farm products. A few U.S. farm groups are wary of such approaches. They point out that, by maintaining barriers to U.S. imports and their own high export subsidies and internal farm supports, not all countries have fully honored existing trade agreements. In fact, some of these U.S. groups have pressed for more restrictions on foreign farm and food imports. Specific agricultural trade issues of interest to the 106th Congress have included: - According China permanent normal trade relations (NTR) status with the United States, which has been renewed on an annual basis. In 1999, the United States and China completed bilateral negotiations on terms for China's accession to the WTO. The agreement provides for tariff reductions and increased access to the Chinese market for a broad range of U.S. agricultural products. To help ensure that the United States can take advantage of these potential benefits, the Administration asked for, and gained, congressional passage of legislation this year granting China permanent NTR status, effective upon its accession to the WTO; - Opening a new round of WTO multilateral trade negotiations. Although trade ministers, meeting in Seattle November 30 to December 3, 1999, did not agree on an agenda to launch a comprehensive new round, sectoral talks on agriculture did begin in March 2000. The United States and other countries are now tabling proposals for further reforms. These talks are proceeding slowly; - Funding USDA export and food aid programs. A program level of about $5.8 billion is assumed in the FY2001 agricultural appropriation (P.L. 106-387; H.R. 4461), cleared in October 2000; - Exempting agricultural exports from U.S. unilateral economic sanctions against countries such as Cuba. Such a provision, with numerous restrictions regarding Cuba, was included in P.L. 106-387; and - Seeking to resolve trade disputes with the European Union (EU), such as over its banana import regime, its continued ban on imports of meat treated with growth hormones despite a WTO panel ruling that it be lifted, and pronounced U.S.-EU differences over environmental effects of genetically modified organisms (GMOs) and the safety of GM foods. MOST RECENT DEVELOPMENTS On October 10, the President signed legislation (H.R. 4444, P.L. 106-286) to accord China permanent normal trade relations (NTR) status. This legislation, which the Senate cleared for the President on September 19, follows completion, on November 15, 1999, of U.S.-China negotiations on terms for the latter's accession to the World Trade Organization (WTO). The new law will help ensure that the United States can take advantage of these terms when China enters the WTO. On October 28, the President signed the FY2001 USDA appropriation (P.L. 106-387; H.R. 4461), which includes funding for agricultural trade and foreign food aid programs. The measure had been delayed by a dispute over language exempting agricultural exports from U.S. unilateral economic sanctions against Cuba, among other specified countries. The enacted provisions reflect the House position, which added restrictions on how the exemption can operate with respect to Cuba. As of late November, the Administration had not yet announced revised lists of European Union (EU) products for trade retaliation in response to the U.S.-EU disputes over banana and hormone-treated beef imports. The so-called carousel provision, which generally requires the Administration to revise the lists of products subject to retaliation, was in the African Growth and Opportunity Act (P.L. 106-200) signed on May 18, 2000. [read report]
Topics: International, Agriculture