Farm Policy Facts Says Thank You
U.S. officials and lawmakers announce they are filing a WTO complaint against China today. (courtesy: House Agriculture Committee)
Farm Policy Facts applauds the United States Department of Agriculture (USDA), the United States Trade Representative (USTR) and a bipartisan group of lawmakers who announced today they are launching enforcement actions against China in the World Trade Organization (WTO) for violating its commitments under the rules. Specifically, the complaint “challenges China’s use of ‘market price support’ for three key crops (rice, wheat, and corn).”
“These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO,” stated USTR Ambassador Michael Froman in a press release earlier today. “We will aggressively pursue this challenge on behalf of American farmers and hold the Chinese government accountable to the standards of fair global trade.”
As Farm Policy Facts has previously pointed out, the U.S. has repeatedly reformed farm policy, abiding by limits agreed to in the WTO. By contrast, according to USTR, China has exceeded its maximum allowable support (the amount China agreed to when it joined the WTO), for corn, wheat, and rice by $100 billion in 2015.
Let us put this in plain terms: the ENTIRE farm safety net spending for 2015 for the United States was about $12 billion, which is well below our limits agreed to in the WTO. Whereas, China went OVER its limits on just THREE crops by $100 BILLION in that same year!
Agriculture Secretary Tom Vilsack, USTR Ambassador Michael Froman, and House Agriculture Committee Chairman Mike Conaway. (courtesy: House Agriculture Committee)
As the chairman of the House Agriculture Committee, Rep. K. Michael Conaway, stated earlier this year in one of a series of hearings held to highlight the illegal subsidies that foreign countries are shelling out to give their producers an unfair advantage:
“While we were busy writing the 2014 farm bill, which achieved significant reforms and savings, our biggest foreign competitors were increasing to new heights their already high subsidies, tariffs, and other trade barriers. This harms our farmers and ranchers, it harms our economy, and it costs America jobs. That’s why the U.S. government must hold our trading partners accountable when they violate their trade commitments. We cannot allow foreign government subsidies, tariffs, and other barriers to free trade to continue at the expense of America’s farmers and ranchers.”
Indeed, USTR’s estimates that U.S. rice, wheat, and corn exports produce an estimated $70 billion in economic activity and support 200,000 jobs nationwide. They write that, “these agricultural sectors are essential to the overall strength of the nation’s economy, and to the vitality of farming communities across the United States.”
Meanwhile, we don’t hear a peep from groups like the Heritage Foundation, R Street Institute, American Enterprise Institute, and the Environmental Working Group about how other governments are propping up their farmers with illegal subsidies. Instead, they continue to attack U.S. farm policy and publish misleading reports calling for our producers to unilaterally disarm and embrace a so-called free market, even though a free market doesn’t exist.
Just last week, the Heritage Foundation released a report advocating for the demise of U.S. agriculture policy while turning a blind eye to countries, like China, that are reneging on their commitments in the WTO.
Thank goodness we have lawmakers and officials in Washington who understand that free markets can’t exist in a world of bad actors. Thank goodness these lawmakers understand that we must not only stand up to these countries, but we must also maintain strong farm policy, in part, as a pragmatic and realistic response to those who refuse to play by the rules.
Click on the links below for more stories from FPF on foreign subsidies: