Trade impacts Vermont's agriculture sector
How do international trade agreements impact Vermont agriculture?
So-called "Doha Round" negotiations at the World Trade Organization are deadlocked on agricultural issues for the moment. Our negotiating partners are concerned that the U.S. Congress in writing of a new farm bill is missing an opportunity for the United States to send a signal to the WTO that it is willing to reduce aggregate farm subsidies; a reduction of some subsidies by the U.S., E.U., and Japan is seen as a precondition for a 'breakthrough' in the ongoing WTO Doha Round of trade talks.
It should be noted that price supports for dairy are currently WTO-legal because: a) they are directed at small producers; b) the volume of subsidies are capped; and c) the subsidies do not increase U.S. fluid milk exports.
Unfortunately, subsidies on corn, wheat, cotton, soy, and rice are not similarly structured to avoid price distortions in global markets for these commodities, and this remains a sticking point at the WTO.
Given the slowdown in some WTO negotiations in Geneva, in the short term, Vermont farmers may want to turn their attention to proposed bilateral trade and investment agreements with Colombia, Panama, and most importantly South Korea.
The pending agreements promise increased market access for U.S. agricultural goods, including Vermont apples and dairy products. For example in the case of the U.S./Colombia agreement:
- All tariffs and duties will be immediately lifted on U.S. exports to Colombia of "high quality beef, cotton, wheat, soybeans, soybean meal, key fruits and vegetables including apples, pears, peaches, and cherries; and many processed food products including frozen french fries and cookies."
- Greater access to the Colombian market will be provided for U.S. exports of "pork, beef, corn, poultry, rice, fruits, vegetables, processed products, and dairy products."
The pending agricultural agreements in the Columbia, Panama, and Peru agreements do not disadvantage Vermont farmers; but, the market-opening opportunities are not structured so as to provide benefits to the small and medium sized producers characteristic of Vermont's agricultural sector. Rather, the agreements are focused on opening markets for the largest U.S. agriculture multinationals, in particular yellow corn exporters, big chicken exporters like Tysons, and mass-market exporters of processed food products.
What are the options for improved federal consultation with states?
Again, advocacy by governors to ensure that the concerns of home-state industries are heard in Washington could be far more effective if 2009 trade promotion authority (TPA) legislation or some similar act of Congress mandated more extensive state-federal consultation on trade policy issues.