*EPF504 06/30/00
Text: Glickman Statement on U.S. Agriculture Proposal for WTO
(Cites proposed changes in treatment of domestic support) (1020)
Secretary of Agriculture Dan Glickman says that the new U.S. proposal for World Trade Organization (WTO) negotiations, if adopted, would close a major loophole in global trade rules that has allowed the European Union to continue major trade distorting agricultural trade practices.
In a June 29 statement, Glickman said one of its most innovative features of the U.S. proposal is simplification in the way domestic support is classified for reduction.
Under the existing system, government measures that do not distort trade are allowed and classified in a category called a "green" box; most measures that do distort trade must be reduced and are classified in an "amber" box category. Measures in a "blue" box category do distort trade but are allowed because they allow production cuts.
The U.S. proposal on domestic support would allow only two categories: those that distort trade and must be reduced or eliminated and those that do not distort trade.
It is "essential because there are currently no limits on blue box, trade-distorting expenditures," Glickman said. "The EU [European Union] has exploited this loophole to the tune of $25 billion per year while U.S. blue box expenditures remain at zero."
He said the proposal addresses food security issues, assuring developing countries they will be able to import what they need to feed their people.
Following is the text of Glickman's statement:
(Note: In the text "billion" equals 1,000 million and "trillion" equals 1,000,000 million.)
(begin text)
Remarks As Prepared for Delivery
By Secretary of Agriculture Dan Glickman
WTO Agriculture Proposal Rollout
June 29, 2000
Good afternoon. I want to thank you all for being here. I want to acknowledge the members of APAC and ATAC, our advisory committees, for being here, as well as other agricultural leaders. And I want to thank them all for helping the Administration craft a sound agricultural trade policy.
Tomorrow, in Geneva, the United States will present its negotiating proposal for the next round of WTO agricultural talks. It's an ambitious and comprehensive proposal that moves us beyond the Uruguay Round to accelerate world agricultural reform and create a level playing field for all farmers and ranchers. It establishes a blueprint for meeting the goals we've been talking about for more than a year eliminating export subsidies; lowering tariffs and expanding tariff-rate quotas; disciplining state trading enterprises, and facilitating trade in the products of new technologies.
This plan will improve prospects for America's farmers and ranchers, who are still coping with low commodity prices, worldwide surpluses and closed markets. Agriculture is twice as dependent on exports as the rest of the U.S. economy. To thrive in the 21st century, our farmers need access to a free and fair global market. This proposal would give them just that.
This proposal is fair. It would allow agricultural trade to be determined not by artificial supports but by the quality of goods and the efficiency of production. The plan also is fair in that it embraces developing and least developed nations, helping them grow, further integrating them into the world trading system.
It also seeks to level the playing field by capping trade distorting domestic support at an equal, fixed percentage of a country's total value of agricultural production. If we've heard one thing from U.S. producers over the past several years, it's that we must avoid further across-the-board percentage cuts, which leave our farmers at a disadvantage. This happened under the Uruguay Round, which mandated uniform cuts by all countries, but still allowed those who started at a higher level to retain their advantage.
At the same time, our proposal preserves the right of nations to support their farmers, conserve their natural resources, and support their rural communities ... as long as those efforts are not trade-distorting.
Ours is also a simplified proposal. It would do away with the green box/amber box/blue box system of classifying domestic support. In its place we would have two simple categories: exempt support, which has little or no trade-distorting impact and non-exempt support, which distorts trade and will be capped. This is one of the most innovative features of the U.S. proposal. It is essential because there are currently no limits on blue box, trade-distorting expenditures. The EU has exploited this loophole to the tune of $25 billion per year while U.S. blue box expenditures remain at zero.
The U.S. proposal is also responsible. It recognizes that food, as a basic necessity of life, is unique among all the goods and services traded in the global economy. The proposal is designed, then, to address food security issues. It reinforces the U.S. role as a reliable global supplier. And it helps ensure that developing nations are able to import the goods they need to feed their people.
Let me just close by saying that this is a proposal for everyone. First of all, it's a plan that enjoys bipartisan support ... as you can see by the members of Congress here today. Trade issues often lead to contentious debates, but this proposal -- and the principles it embodies -- transcend partisanship.
But when I say this is a proposal for everyone, I'm also talking on a much bigger scale. First and foremost, it will provide farmers and ranchers, in all nations, the opportunity to sell their commodities in every corner of the earth, without being undercut by subsidized competition or blocked by high tariffs. It's also a proposal that is good for importers and exporters, and for consumers, who will have a wider array of food choices at reasonable prices.
The choice is simple. We can stick with the current system, under which subsidies and monopolies distort trade, innovation is discouraged, natural resources are abused and government resources are misdirected. Or we can take a bold new step toward leveling the playing field, allowing the market to create new opportunities for farmers to grow and prosper.
(end text)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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