Market News

US Farm Bill again under attack at WTO

GENEVA, June 11 (Reuters) - A new U.S. Farm Bill increasing support for American farmers has come under attack again from countries who say it calls into question U.S. willingness to negotiate a trade deal, a top trade official said on Wednesday.

The U.S. slowdown, the weak dollar and U.S. security measures also prompted concern at a review of American trade policy this week, said Clem Boonekamp, director of trade policy reviews at the World Trade Organisation (WTO).

But the openness and efficiency of the U.S. economy and its preferential treatment of imports from developing African countries won praise, he told a news conference.

WTO members told U.S. officials the new farm bill was a missed opportunity to reduce support to U.S. agriculture.

“They were worried -- and that’s not too exaggerated a word -- that it would prevent the U.S. from playing the role they expect of it in the agriculture negotiations,” Boonekamp said.

Critics say high U.S. farm subsidies distort the world trading system and squeeze poor-country farmers out of their markets, as well as putting a burden on U.S. taxpayers and giving incentives to U.S. farm businesses that do not need them.

Cuts in U.S. subsidies are one goal of the WTO’s Doha round, now in its seventh year. U.S. officials said the farm bill did not represent the U.S. offer in the Doha talks, and could be amended if the negotiations result in a deal.


The U.S. administration has made clear it is willing to cut subsidies but wants developing countries to open up their markets for industrial goods by cutting tariffs.

Developed and developing countries are deeply divided over the extent to which each should cut tariffs.

U.S. WTO ambassador Peter Allgeier told the review U.S. tariffs averaged 3.5 percent under WTO rules, and were as little as 1.3 percent in practice when preferences such as those for African countries were taken into account.

But Brazil said it faced an average tariff of about 21 percent on its imports into the United States, because of tariff “peaks” on certain products, while the duty on U.S. goods coming into Brazil averaged only 11 percent, Boonekamp said.

U.S. deputy WTO representative David Shark told the review that Washington was willing to eliminate these tariff peaks on industrial goods, but expected others to do so too, he said.

U.S. officials did not respond to criticism from China that the weak dollar was hurting developing countries by disrupting their foreign trade and devaluing their reserves, other than to note that the exchange rate was set by market forces.

They said plans to scan all containers entering America, which other WTO members such as the European Union say may raise costs and slow down trade, would make trade more efficient.

U.S. officials said rising exports were tempering the slowdown in the world’s biggest economy, while a stimulus package and monetary easing should make growth continue modestly for the next two quarters and pick up at the end of the year. (Reporting by Jonathan Lynn; editing by Andrew Roche)