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A Potential W.T.O.- Congressional Disconnect?

Keith Good

FarmPolicy.comConcrete achievements made at the latest round of W.T.O. trade talks in Hong Kong were modest.

Most notable was an agreement that sets a deadline for wiping out subsidies of agricultural exports by 2013.

And reaction to the talks from newspaper editorial boards was mostly negative.

Yesterday’s Wall Street Journal indicated that, “The negotiators signed a substantially weakened deal that includes a commitment to eliminate farm subsidies by 2013, modest cuts in tariffs, and an April 30, 2006 deadline for agreeing on how to liberalize farm and non-farm trade.”

And today’s New York Times opined that the W.T.O. “might as well just adopt the slogan, ‘Why do today what you can put off until tomorrow?’ Because, once again, negotiators have postponed until next year difficult decisions to open up closed markets in agriculture.”

Possibly a more interesting issue regarding the Doha trade talks is the apparent disconnect between trade friendly forms of agricultural support being promoted in trade talks and current budget decisions being made in Congress.

Recall that last week’s discussion focused on non-trade distorting W.T.O. “green box” payments and remarked that some green box payments are often the type of government outlays that are considered “green” from an agri-environmental perspective.

Some farm policy observers see the 2007 Farm Bill as a chance to move payments from existing programs into non-trade distorting green box payments.

But the House just passed a budget reconciliation measure that contains $934 million in reductions to some green agri-environmental programs like the Conservation Security Program and other environmental incentive payment programs.

Some have argued that this sends a mixed signal to our trading partners and may be a precursor of future farm policy resource allocation decisions: While promoting less trade distorting forms of domestic agricultural support on the world stage, Congress is simultaneously considering significant cuts to these very same programs.

Keith Good writes The FarmPolicy.com News Summary, an Email newsletter containing a summary of news relating to U.S. farm policy which is published most weekdays. For more information, go to www.FarmPolicy.com.

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