Wakeup Call From Chairman Lincoln

December 18, 2009

By: Larry Combest

Since the G-8 Leaders and five of their developing country counterparts set 2010 as the end date for completion of the Doha Round at the July Summit, there have been multiplying pledges of fealty to the Round, culminating in the alleged “breakthrough” at the meeting of Trade Ministers in New Delhi earlier this month. While Ministers avoided substance as carefully as one would avoid H1N1, this “breakthrough” did serve to drag negotiators back to Geneva with the usual procedural incantations: process of engagement, action agenda, work plans.

One seemingly innocuous phrase in Indian Trade Minister Sharma’s enumeration of understandings reached is worth noting: “negotiations should proceed on the basis of progress achieved till December 2008.” The U.S. has dismissed this phrase as being of little import but to all other WTO countries, it means that negotiations will proceed on the basis of the draft negotiating texts put forward near the end of December 2008. In the case of agriculture, this text would resolve all but a handful of issues, lock in major loopholes for the big, emerging developing countries, and result in major and unsustainable cuts in allowable levels of U.S. farm support.

Thus, the recent remarks made to the National Cattlemen Beef Association by U.S. Senator Blanche Lincoln, just appointed Chairman of the Senate Agricultural Committee, is a welcome and timely wakeup call to both our negotiators and those of our negotiating partners. Senator Lincoln, who helped lead the charge to convince the Bush Administration to back away from a bad Doha deal in December 2008, showed a crisp understanding of the unfortunate realities of global agricultural trade – that there are major barriers to U.S. agricultural products in world markets and that offers made to reduce U.S. agricultural support levels over the course of the Doha Round negotiations have not been reciprocated by other members with offers of new market access. She noted, in particular, the refusal of countries like India and China with a rapidly expanding middle class -critical markets for future U.S. farm export growth – to make significant market access concessions.

Senator Lincoln delivered a clear and unequivocal message: Without considerable changes in market access for our producers, any future Doha agreement will be unacceptable. “If we do go back to the negotiating table, we must have a new text. We cannot go back to the old text,” she said, adding, “no deal is better than a bad deal.”

The Senator’s sentiments are very much in line with those of the U.S. private sector. Earlier this year the American Farm Bureau Federation, the National Association of Manufacturers, and the Coalition of Services Industries sent a letter to President Obama warning against trying to conclude the Doha Round on the basis of existing draft negotiating texts. The letter further stated that these texts were not a basis for advancing the talks and needed to be revised in order to provide market access gains for U.S. exporters in the advanced developing countries.

To its credit, the Obama Administration has also told our negotiating partners that what is on the table is unbalanced and unacceptable to the United States. However, they appear to have been maneuvered into essentially accepting the existing draft texts and placing all their eggs in the basket of bilateral negotiations -i.e., wringing bilateral market access commitments for U.S. agricultural and industrial products beyond those called for in the basic agreement.

This puts them on a slippery slope. At the New Delhi meeting, the multilateral process was declared the main process of negotiations; “other forms of engagement” (meaning bilaterals), an adjunct. But comments from some of the likely targets of such “bilateral engagement” are not encouraging:

“In sharp opposition, Brazilian foreign minister Celso Amorim said developing countries – including Brazil – have already paid heavily in the Doha talks over the past seven years and there is nothing more they can deliver through bilateral talks… [he] said developing countries cannot change the “landing zones” as outlined in the December modalities texts on agriculture and nonagricultural market access.”

“China trade minister Chen Deming told ministers on Friday that Beijing will not move away from its opposition to bilateral negotiations.”

“South African trade minister Rob Davies said developing countries have already gone well beyond the negotiating mandate – suggesting that such demands cannot be accepted.”

–Quotes are from the 9/7/09 report of Washington Trade Daily

We need to understand that in its call for improvements in market access, the U.S. is completely isolated. While it is doubtful that most members believe their own rhetoric about the crucial importance and vast economic benefits of the Round, the other members, with a nip here and a tuck there, can basically live with what is already on the table. For broader policy reasons(and perhaps self image, certainly not perceived commercial gains) and because their agricultural policies will be essentially untouched, other developed countries such as the EU and Japan are prepared to live with it. And the developing world can easily accept an outcome that hogties U.S. agricultural policy and cuts the tariffs of the U.S. and other developed countries to the bone while leaving their own policies unfettered and their market access barriers largely intact.

Thus, as the negotiations proceed, and most observers feel the basic deal needs to cut by the first quarter of 2010 if the end of year target is to be respected, the U.S. will be under increasing pressure to pull back on its demands and accept whatever it can get. Let us hope that the firm and forthright words of Senator Lincoln will bolster the resolve of our negotiators and cause our negotiating partners to rethink their opposition to the major new commitments that will need to be made in order for an acceptable agreement to be brought back to the U.S. Congress.

Those who believe that the Chairman of the Senate Agriculture Committee and senior member of the Senate Finance Committee won’t stick to her guns on this issue do not yet know the new Chairman.

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About the Author: Larry Combest served as Chairman of the Select Committee on Intelligence and the Agriculture Committees in the U.S. House of Representatives where he represented the 19th District of Texas for 18 years.

Editor’s Note: This article first appeared on the Pro Farmer website and was published with permission.