By Elana Schor - 07/27/06 12:00 AM EDT
This week’s collapse of the Doha world-trade talks could give new momentum to lawmakers hunkering down for a hard-fought farm-bill rewrite, despite support for extending existing farm-subsidy rates until a Doha deal can be reached.
World Trade Organization (WTO) nations spent five years working for an agreement to expand market access for U.S. agriculture in exchange for curbs on U.S. and European Union (EU) farm subsidies, among other trade expansions. Capitol Hill was bracing for new farm-subsidy rules to be set during debate over reauthorizing the 2002 farm bill, which expires in fall 2007.
But the WTO indefinitely suspended talks Monday after the EU failed to match proposed U.S. subsidy cuts. The best efforts from U.S. Trade Representative Susan Schwab and other Bush administration negotiators are unlikely to take Doha off life support until after a new farm bill is passed.
The American Farm Bureau Federation (AFBF) will announce a policy shift triggered by the Doha stalemate this morning. Both the AFBF and the National Farmers Union (NFU) have supported House and Senate proposals to extend the 2002 farm bill until Congress approves legislation to implement new world-trade rules, but this week’s developments could shift momentum away from those efforts.
“Right now, the farm economy is in a shaky financial situation” because of high energy prices, NFU President Tom Buis said. “With that scenario, the shaky political divisions in Congress in an election year … federal budget issues because of the deficit, and you throw in the trade issues, a lot of people think an extension is the best bet.”
Two House bills, sponsored by Reps. Collin Peterson (D-Minn.) and Mac Thornberry (R-Texas), would have put off a contentious farm-bill debate to bolster the Doha round’s chances. Sen. Jim Talent (R-Mo.) offered a Senate version.
“Given the fact that we were unable to create additional market access through Doha, we have a very deep concern regarding the types of support programs farmers are going to need to compete in world trade,” AFBF spokesman Mace Thornton said.
Yet House Agriculture Chairman Bob Goodlatte (R-Va.) did not support extending 2002 subsidy rates. He still favors moving forward with a new farm bill regardless of Doha, Goodlatte spokeswoman Alise Kowalski said.
If a one-year stopgap were approved, Kowalski asked, “what cycle would we be getting into? We would keep extending it until they were done.”
If Doha had hurtled toward a deal, Goodlatte would have been open to holding off on a new farm bill, but now the committee is picking up its pace, she said.
The committee has held 11 farm-bill field hearings in members’ districts this year and plans to hear from consumer and industry groups in Washington after the August recess.
The Senate Agriculture Committee, where chairman Saxby Chambliss (R-Ga.) has not fully endorsed of an outright extension, is also holding field hearings.
Tight federal finances, rather than WTO uncertainty, could prove crucial as lawmakers grapple with less subsidy funding than was available in 2002. The recent budget-reconciliation bill required agriculture committees to find $2.7 billion in cuts over the next five years.
“We’re running a deficit on a national basis that will make it more difficult to have a lucrative farm bill,” said Rep. Randy Kuhl (R-N.Y.), the only Northeasterner on the Agriculture Committee and a strong backer of the MILC dairy support system. Kuhl said he would be open to general subsidy cuts as the reauthorization debate proceeds.
Despite Doha’s derailment, WTO rules remain an obstacle to remodeling the farm bill. Brazil’s challenge to U.S. cotton subsidies left Congress wary of inviting future WTO disputes over sudsides.
“Many legislators had been saying they wanted to have some more certainty about the content of trade rules before they went to all the trouble of writing a farm bill,” said Jason Hafemeister, Schwab’s director for WTO agriculture negotiations. “Some were hoping [for] a deal that would have defined what was permissible in terms of subsidies.”
If Doha is revived, Hafemeister noted, lawmakers can change farm subsidies and other support programs after a new farm bill is passed.
One senior Bush administration official called the convergence of Doha and the farm bill “a very tricky issue, timing-wise” as Schwab and U.S. negotiators continue to position themselves as more flexible on agricultural support than the Europeans.
“If we went ahead and extended the farm bill as it is, other countries will say, ‘Aha, the U.S. is not willing to reform. It doesn’t have the political will to do what the negotiators said they would do,’” the official said.
At a press conference just after the Doha suspension, EU trade chief Peter Mandelson said he wants President Bush to pledge a veto of “any move to extend or roll over the existing U.S. farm bill.”
Secretary of Agriculture Mike Johanns also urged lawmakers to start reauthorizing the farm bill regardless of the state of Doha talks. “It’s important … to draft farm policy that is equitable, that is predictable and that is beyond challenge,” he told reporters on a conference call earlier this week.