Farm subsidies fight brewing

Thursday, April 29, 2004

WASHINGTON -- The government's fight to protect farm subsidies against a World Trade Organization challenge may go on for years, and the subsidies will be safe in the meantime, U.S. trade representative Robert Zoellick said Wednesday.

Unless the preliminary report itself is changed, "you can be 100 percent sure we are going to appeal," Zoellick said.

The appeals through the litigation process "could last months or possibly a year or years," Zoellick told a House Agriculture Committee hearing.

The WTO panel had decided that U.S. subsidies increase domestic cotton production and wrongly force down world cotton prices. The United States contends its subsidies are allowed under WTO rules. U.S. farm group officials fear that, if the decision in the cotton case is allowed to stand, other subsidies also could be challenged.

Zoellick said the appeals process will protect the subsidy system. "There is no immediate impact for farmers and ranchers around the country," he said. "This is a marathon, it is not a sprint."

Agriculture Committee Chairman Bob Goodlatte, R-Va., also said the subsidy system is in no present danger. "This litigation is the beginning, not the end, of the process," he said. "It is certainly not the end of farm programs."

Even if the WTO ultimately decides against the United States, WTO rules would give the U.S. government more time to come into compliance, Zoellick said.

By choosing to take the subsidy issue to the panel of judges instead of negotiating it as part of ongoing world trade talks, Brazil may have created a time-consuming problem, Zoellick said.

"I think it would be a very big mistake to try to solve very complex agricultural issues through the process of litigation country by country," Zoellick said. "It is piecemeal, it is uneven, it's going to be very drawn out and, in my view, it is contentious and ultimately counterproductive."

Zoellick also said the Brazilian strategy on cotton could undermine the WTO talks on worldwide reform of farm tariffs and subsidies. "If other countries decide to stand back and litigate their way, as opposed to negotiate, I think it is going to be a very complicated and nonproductive approach for everyone," he said.

The Brazilian ambassador to the United States, Roberto Abdenur, disputed Zoellick's contention that Brazil had embarked on a second-track approach on farm trade disputes.

"Brazil does not favor litigation over negotiation -- very much to the contrary," Abdenur told reporters after the hearing. We have been forced to go along the path of litigation in this case precisely because of the lack of will on the part of the U.S. and other countries to engage in serious negotiation."

Respond to this story

Posting a comment requires free registration: