The Cairns Group expresses its strong disappointment at the decision by the United States (US) Congress to approve a Farm Bill that clearly contradicts the objectives and mandate of the WTO Doha Round of trade negotiations.
The Cairns Group particularly regrets Congress’ decision to take a significant step backwards by increasing farm subsidies. This will prolong the negative impact of distorting policies on the productivity of important agriculture and food industries worldwide – including in developing countries whose development objectives depend highly on the competitiveness of agricultural exports.
At a time when US farmers are benefiting from record food prices, Congress has failed to take advantage of an ideal opportunity to contribute to the Doha Round reform effort. Instead, Congress has increased loan rates and target prices, introduced new programs that have the potential to provide a significant amount of new trade distorting domestic support to commodities already generously supported, and extended trade distorting domestic support to commodities not previously supported.
The Farm Bill passed by Congress also missed the opportunity to reform US food aid policies. A decision to untie a meaningful portion of US food aid would have been a welcome response to address the current food crisis and to provide for humanitarian needs on an on-going basis.
US. farmers stand to gain from the Doha Round which would take a significant step towards a fairer and more market oriented agricultural trading system. The Cairns Group calls on the US to play its part, as a major trader and as one of the main providers of trade distorting domestic support, in securing a successful conclusion to the negotiations by accepting significant commitments to reduce and discipline trade-distorting support. While support levels in the markets of other Members may be higher, it is only in the US that reform is moving in the wrong direction.
This failure by Congress to use the opportunity of record levels of farm income and commodity prices to take steps towards a more market-oriented agricultural policy underlines the need for WTO Members to conclude the Round and secure an outcome that delivers real reform and binding commitments across the domestic support, market access and export competition pillars. These are commitments all Members, particularly those responsible for the major distortions in world agricultural markets, must take to conclude the Round.
The Cairns Group will continue to work with the US and other Members to achieve a successful conclusion to the Doha Round.