Posted on 12/15/2005 9:39:12 AM PST by Willie Green
For education and discussion only. Not for commercial use.
For decades, the American farm lobby has been duped by the Big Business lobby and "free trade" ideologues into supporting trade agreements that have opened the U.S. market to foreign rivals and that have allowed transnational corporations to shift factories and jobs overseas. Farmers have been content to watch their neighbors in manufacturing devastated so long as their own position was protected. Now, it is the farmers' turn to be thrown to the wolves in the Doha Round of negotiations, which hinge on the 'liberalization" of international agricultural trade and the ending of support programs for domestic producers.
This is not the first attempt to undermine the security of the American farmer, who, with significant government support (denied to manufacturers), has built the most productive agricultural system in the world. The Federal Agricultural Improvement and Reform (FAIR) Act of 1996 contained provisions known as the "freedom to farm" reforms. The free trade argument then was that American farmers could increase their incomes more from trade than from continued government relief packages. The promise was that export markets would increase steadily as a result of foreign population growth and rising standards of living overseas. Free trade "experts" predicted that by 2002 exports would replace agricultural subsidies entirely.
Free traders thought that American farmers were poised to enjoy the more liberal international trading system established by the 1994 Uruguay Round Agreement on Agriculture (URAA). But they were, as usual, wrong. As Cathy Jabara, Division Chief of the Agriculture and Fishery Products Division at the U.S. International Trade Commission, has written, "from the mid-1990s the U.S. agricultural sector underwent a number of substantial changes that increased the competitive pressures on agricultural producers. Since 1995, the year the URAA was implemented, these changes resulted in the value of U.S. agricultural imports growing substantially while the value of U. S. agricultural exports remained relatively flat." [Global Economy Journal, Volume 5, Issue 4, 2005, " Perspectives on the WTO Doha Development Agenda Multilateral Trade Negotiations."]
In 1997, the world financial crisis crippled export markets in Asia and spread across the world, including Brazil and other Latin American countries that were critically important markets for U.S. products. The Clinton administration decided to keep the American market open to help foreign producers recover from the crisis by dumping their excess production into the United States. This was supposed to be a temporary, counter-cyclical policy to aid the "world economy" at the expense of American firms and farmers. But it has turned out to be a permanent policy, which has lead to the explosion of the U.S. trade deficit.
The farm lobby has been much more successful in gaining government assistance than manufacturers. In 1998, Congress voted $7 billion in emergency relief to farmers and another $10 billion in 1999. Instead of seeing subsidies end in 2002, the Farm Security and Rural Investment Act of 2002 introduced counter-cyclical payments (CCPs) to the array of continuing income-support programs for agricultural commodities. CCPs are available for specified crops when market prices are below levels set forth in the legislation. This program was added to payments from other farm commodity programs, such as direct payments and marketing loan benefits (loan deficiency payments and marketing loan gains), as well as payments from conservation programs. Other support to the sector includes crop insurance premium subsidies and price supports for selected commodities, such as dairy and sugar.
Now, under cover of the Doha Round of World Trade Organization negotiations, the Bush administration hopes to slash the cost of agricultural programs with an even less credible pretext than usual about opening foreign markets for export. The entire thrust of the Doha Round is to help foreign farmers export into the American (and other developed) markets. This is in line with the impact of NAFTA. As the USITC's Jabara has noted, "As a result of the of the growth in agricultural imports since 1995, the U.S. agricultural trade balance fell from $31.7 billion in 1995 to $7.6 billion in 2004. Much of the import growth consists of imports from Canada and Mexico due to trade liberalization under NAFTA, but other countries, such as the EU and Brazil, have also increased their exports to the United States." Further trade liberalization under the WTO will continue this trend on an even larger scale.
U.S. Trade Representative Rob Portman's December 12 Wall Street Journal commentary ["Will We Make History in Hong Kong?"] revealed that the U.S. intent in the Hong Kong WTO ministerial is the further liberalization of the American market. Nowhere in his discussion of the Doha Round negotiations did he mention any U.S. initiative aimed at helping Americans expand their productive capacity or incomes in the international system. Instead, his focus was on "the world's poorest countries that can benefit most from open trade, whether in agriculture, services or manufactured goods." The benefit comes from moving production and jobs from America and other developed countries to the Third World, using trade more to redistribute wealth than create it.
His Doha proposal is explicitly non-reciprocal, "to give farmers in developing countries more chances to sell their output in developed countries. More advanced developing countries were asked to lower tariffs, albeit by less, while the least developed countries would make no cuts at all." He says the Bush administration is "willing to take a risk," but it is American farmers who will bear the risk. They will join the millions of workers (professional as well as blue collar), and hundreds of manufacturing firms that have been devastated by foreign rivals who have gained competitive advantages from self-destructive U.S. proposals in past rounds.
That Portman has not forgotten to kick American manufacturers along with farmers was indicated when he urged House Speaker Dennis Hastert in a December 8 letter to hold fast to the House repeal of the Byrd Amendment (Continued Dumping and Subsidy Offset Act). This measure awards U.S. firms with the duties imposed on foreign rivals for unfair practices, helping the American businesses recover from the damage inflicted by overseas predators. Portman made the revealing argument that, "Repealing the [Byrd amendment] on the eve of the Hong Kong Ministerial would send a powerful signal to the world that the United States is fully committed to the global trading system." This statement is yet another example of his misplaced loyalties, placing the abstraction of the "global trading system" above the real advantages needed by American firms fighting for their commercial lives.
As Portman said in his WSJ column, the "U.S. is the most open major economy in the world," which is why it has a trade deficit that will top $700 billion this year. Everyone knows such an imbalance is unsustainable, so why predicate Doha on making the situation worse? U.S. policy should shift to helping American producers gain larger markets both at home and abroad to head off a financial debacle.
ping
"For decades, the American farm lobby has been duped by the Big Business lobby and "free trade" ideologues into supporting trade agreements that have opened the U.S. market to foreign rivals and that have allowed transnational corporations to shift factories and jobs overseas"
O-BS
The took billions of dollars taken from the taxpayers given to them by government to NOT grow anything.
Pure and simple - follow the money. It always trumps idology.
I love how the simple act of selling something for less than someone else is by definition "predatory" or "theivery" to the trade kooks.
Many types of crops receive no subsidies at all, and are raised profitably.
Yes, these international trade agreements are negotiated strictly for profit.
It is the objective of the transnational food conglomerates to secure greater ownership control of global agricultural resources. Through economies of scale, they will drive smaller competitors out of the market when agricultual price supports are eliminated. And with competitive capacity reduced, they will enjoy the profitable increase of the rising price of food commodities much the same way that oil companies profit when OPEC or enviro-whackos restrict oil production.
The downside of this "efficiency", of course, is that surplus food production is eliminated. For the poorest people in the world market, that means increased hunger and starvation.
It should be no surprise that most neocon "free traders" are also "pro-choice" on the abortion issue.
They sincerely believe that their market-based solutions to global population control are more "compassionate". The evil behind this hypocrisy makes me nauseous.
Welfare Farmers On The March ping!
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