Issue 24
Prairie Grains Magazine
1999

Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, South Dakota Wheat, Inc. and the Minnesota Barley Growers Assocation.

Copyright Prairie
Grains Magazine
Nov/Dec  1999

News and Views _{From the Wheat and Barley Growers}

How the U.S. Wheat Industry has become WTO - Ready
By Christopher Shaffer

With the Seattle Ministerial of the World Trade Organization scheduled to kick off after Thanksgiving this year, I thought now would be an appropriate time to bring you up to speed on how your elected producer leaders are preparing for the next round of multilateral farm trade talks.

Our preparations for the trade talks began more than a year ago, following the Geneva Ministerial of the WTO held in May 1998.  At that meeting, President Clinton established agriculture as a key component of the next trade round. He challenged the other member countries of the WTO to build on the successes of the Uruguay Round Agreement on Agriculture (URAA) and committed the U.S. to a "no pause" strategy.  This translates to a continuation of reforms begun in the URAA, particularly in the areas of export subsidies, domestic supports and market access.

Our initial response to the Administration's call was cautious optimism given the lack of specific details at that time.  However, it did not take us long to decide to be equally proactive in our approach to the next round of trade talks, in the development of a "Wheat Action Plan" of legislative and trade priorities.

One of the first priorities was to heighten the wheat producer's profile in the negotiations by electing a farmer leader to represent our producer interests at the highest levels.  I was elected from a field of several very qualified candidates for this job of Wheat WTO Representative.  In this capacity I serve as your wheat producer representative on the Agricultural Policy Advisory Committee to USDA and the Office of the USTR.  I have also personally committed to appearing before the Congress and any and all other relevant bodies to testify on wheat producer priorities for the next round.

Following my election and the annual meeting of the State Wheat Commission Administrators, a task force was named to work with U.S. Wheat Associates on a WTO-specific program for the March meetings of both U.S. Wheat Associates (USW)  and the National Association of Wheat Growers (NAWG).  Participants listened to a range of views on the results of the URAA reforms and the prospects for the future.  They then broke out into four groups:  export subsidies; domestic supports; market access; and sanitary/phytosan-itary issues.  Each group identified their priorities within that area and reported it to the whole assembly. 

Then a more thorough review of the priorities was conducted between farmer representatives of the NAWG, USW, and the Wheat Export Trade Education Committee (WETEC).  The collective result of that labor was circulated back to the member states of our organization for more comment and discussion. The purpose of this exercise was to get the widest amount of producer input into the process early, particularly as we prepared to present our objectives for the trade talks to the Administration and the Congress.

Once we got a handle on where our members wanted to go, we decided to examine how to get there. During and since the negotiations for the URAA, the wheat industry has turned to expert legal help on specific issues.  Notably, in the Section 22 trade case against imports of Canadian wheat into the United States and more recently, in resolving the long-standing dispute between the U.S. and China over TCK as part of  China's bid  for entry into the WTO.   In July 1999, we made a dramatic decision for our industry and hired the law firm of Mayer, Brown and Platt to help us deliver on our WTO objectives.  We are already reaping rewards from this affiliation.

Also in July, we met to fine tune the priorities developed in March and to identify our informational and political gaps.  Work is underway now to close those gaps and maximize wheat producer leverage for the upcoming talks.   Later in July, we sent a letter to U.S. Trade Representative Barshefsky and Agriculture Secretary Glick-man, identifying our preliminary objectives for the next of farm trade talks.  Briefly, these include the following:

• The U.S. should establish as its highest priority the total elimination of direct export subsidies.

• The U.S. should seek to eliminate state trading export monopolies.  In particular, the U.S. should negotiate rules that end the state supported export monopoly powers of the Canadian Wheat Board and the Australian Wheat Board, Ltd.  The ability of these entities to maintain sole control over the export supply of wheat from their countries combined with their ability to price discriminate among wheat buyers results, effectively, in an export subsidy.

• The U.S. should seek to eliminate the inequities that persist between U.S. levels of domestic support and those of our competitors — especially the European Union.  The United States has significantly reformed its domestic programs since the conclusion of the Uruguay Round.  Europe currently maintains its producers at ten times the level of U.S. support.  It is imperative that our negotiators avoid any effort to apply a "one size fits all" solution to reductions in domestic supports. Such an approach would only perpetuate the inequities in our systems.  We urge the negotiators to define clearly domestic farm subsidies and to apply disciplines that limit trade distortions.  And we urge the negotiators to resist efforts to introduce the concept of "multifunctionality" or any other scheme that permits trade distorting subsidies under the guise of rural development.

• The U.S. should seek a WTO rule that food will be exempt from all peacetime sanctions.  Unilateral sanctions only hurt U.S. producers.

• Wheat producers continue to face high tariffs in Turkey, Morocco, Kenya and the European Union.  As an export dependent commodity, unfettered access to export markets is a critical issue for U.S. wheat producers.  There are many different mechanisms that restrict our access to markets.  We need to identify and address these barriers in a manner that results in increased and predictable market opportunities for U.S. wheat producers.

• The U.S. should strongly resist all efforts to reopen negotiations on the Agreement on Sanitary and Phytosanitary Measures. Contentious disputes over health and safety can only be resolved by strict adherence to the principles embodied in the existing agreement.  We will open a Pandora's box for trade policy if we flirt with concepts such as the "precautionary principle."

• Dispute Settlement and Enforcement: While the dispute settlement process under WTO represents a significant improvement over the GATT process, there is still the question as to how to strengthen the dispute settlement process so that members will live up to their obligations. Negotiators should examine the idea of setting a mandatory deadline for accepting and implementing WTO decisions.

Since this summer, the trade work continues on filling our information gaps, assessing any vulnerabilities, and considering coalitions to gain even greater leverage.  All of our efforts are intensifying as we approach the kick-off of these talks at the Seattle Ministerial.  But keep in mind that the Seattle meeting represents a beginning not an end.  Our main task of fulfilling our objectives and securing access to markets for our producer members lies beyond the Seattle talks.  The reward for this effort can only be claimed in the future, when the talks are completed (in approximately three years) and implemented.  There is no quick fix here.  Personally, I can think of no greater enterprise for our industry than to make this investment of time and money into our future.

We producers are facing serious challenges with our own private businesses at stake. In confronting these challenges, we must remember that our strength is that we are an industry of talented, committed individuals each with specific concerns and opinions. My personal challenge is to get you the information you need and to help in the development and articulation of the wheat trade message. Our primary challenge is to develop one message for wheat and to let all our voices deliver that message to the policymakers that can make a difference.  We have a lot to get done in the next few years, and  I look forward to working with you to accomplish our trade goals now and into the new century.

(Shaffer is a wheat producer from Walla Walla, Wash.  As the official spokesman for the National Association of Wheat Growers and U.S. Wheat Associates on trade matters at the WTO, Shaffer also represents wheat groups in MN, ND, SD, and other states.  His WTO update has been edited for space and clarity.)