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Doha: Lula Speaks Out
Bloomberg writer En-Lai Yeoh reported this morning that, “Ministers responsible for half the world’s trade meet in Australia this week to try to revive global talks some say are on their deathbed…Trade ministers from 21 Asia-Pacific Economic Cooperation economies will come together in Cairns July 5 and 6, where they will attempt to resuscitate the so-called Doha round of trade liberalization negotiations.”
I. Doha
II. Farm Bill
III. Renewable Energy
I. Doha
The Associated Press reported yesterday that, “Failure by the United States, European Union, Brazil and India to progress on eliminating trade barriers to farm produce and manufactured goods could be fatal for the current round of global commerce talks, the World Trade Organization’s top official said Monday.
“Washington must lower its agricultural subsidies further, the EU needs to ease access to its farm markets, and Brazil and India must offer deeper cuts in industrial tariffs, WTO Director-General Pascal Lamy said.”
The AP article noted that, “‘What remains to be done is small compared to all the proposals already on the table,’ Lamy told a meeting of the U.N. Economic and Social Council. ‘Reaching agreement on subsidies depends on additional concessions from the U.S. (that would be) equivalent to less than a week’s worth of trans-Atlantic trade.’
“He said the EU and Japan also needed to reduce their highest farm tariffs by only a few more percentage points. Brazil, India and other emerging economies would have to offer similar cuts in their highest industrial tariffs.”
However, with respect to Brazil, the AP article indicated that, “‘For the first time we had the courage to not give in to developed economies, like the United States and the European Union,’ Brazilian President Luiz Inacio Lula da Silva said Monday during an event in a Sao Paulo suburb.
“Silva said a U.S. offer to limit agricultural subsidies to US$17 billion was ‘absurd.’”
Dow Jones writer Siobhan Devine, in a report filed yesterday, added that, “Brazil’s decision last month to drop out of preliminary talks in the World Trade Organization’s Doha Round of negotiations symbolized the end of Brazilian ‘subservience’ to the industrialized countries, Brazilian President Luiz Inacio Lula da Silva said Monday.
“‘For the first time, we had the courage not to concede to the interests of the developed economies,’ the president said during a speech in a Sao Paulo suburb that was reported by the government news agency.”
The Dow Jones article added that, “Lula said Brazil enjoys a newfound bargaining power due to economic stability and growth. ‘The world needs to know that Brazil is returning to a position of economic and political strength,’ he said.”
Meanwhile, Bloomberg writer En-Lai Yeoh reported this morning that, “Ministers responsible for half the world’s trade meet in Australia this week to try to revive global talks some say are on their deathbed.
“Trade ministers from 21 Asia-Pacific Economic Cooperation economies will come together in Cairns July 5 and 6, where they will attempt to resuscitate the so-called Doha round of trade liberalization negotiations.”
The article stated that, “‘Unless and until there is sufficient new market access in agriculture and manufacturing and services, the Doha round will never meet its development promise,’ U.S. Trade Representative Susan Schwab said June 21 after the Potsdam meetings.
“A week later, Schwab’s office said it would complain to the WTO over the European Union’s banana import restrictions, indicating that the divide was not merely between the developed and the developing world.”
In a speech delivered on last week in Paris (“Openness, trade and the European Union”), EU Trade Commissioner Peter Mandelson noted that, “I know some have doubts about the WTO. But like the binding rules of the EU, the WTO is the only guarantee we have of a rules-based trading system – applying fair trade rules to all. It is the most effective way we have of managing globalisation at the international level – in good times and in bad. As Pascal Lamy has said, it is the cheapest insurance policy available to us for the bad times – which, at some point, will come.
“That is why I have worked and continue to work so hard for a WTO deal: because I believe there are real risks for Europe, and the world, if these talks don’t come to a definitive end. I am working for a deal that is reasonable and realistic. That is the basis of positive reciprocity. There is no question of the EU accepting an unreasonable outcome or paying beyond what we have all agreed we can pay in agricultural reform – whatever some may think or at least say.”
II. Farm Bill
Yesterday at the Fresh Talk blog, Tom Karst posted the official statement from the Specialty Crop Farm Bill Alliance in response to the House Agriculture Committee announcement of Friday about the handling of the upcoming farm bill.
This statement noted that, “Although details of the Chairman’s proposal are not fully available, we are vehemently opposed to fracturing the Farm Bill into two separate pieces of legislation since this will not allow Congress to develop a farm policy that positively addresses the full breadth of agriculture, conservation and nutrition issues. This approach will make it difficult to enact legislation that reflects the needs of the specialty crop industry, which include pressing production, food, nutrition and research components. Our industry accounts for nearly half of all cash crop receipts, yet the way this Farm Bill approach is structured the needs of specialty crop producers will not [be] met. The 2007 Farm Bill represents a unique opportunity to enact a paradigm shift in agriculture policy for the 21st Century, but the proposals announced today fall short of needs of many American farmers. We look forward to working with Congressional leaders and the House Agriculture Committee on drafting a Farm Bill that is more equitable for specialty crop producers.”
Also yesterday, Chris Clayton reported at DTN (link requires subscription) that, “Farmers could have the option of choosing between different counter-cyclical programs under a proposal being discussed by the chairman of the House Agriculture Committee and USDA officials.
“Rep. Collin Peterson, D-Minn., said Friday he has been talking this week with officials from USDA and different commodity groups about the idea of incorporating a revenue-based counter-cyclical program in the farm bill and letting farmers decide whether they would like to have that program or the current counter-cyclical program for their farm.”
Mr. Clayton added that, “Peterson said the idea was proposed by USDA Deputy Secretary Chuck Connor earlier this week. Peterson said he is looking at including that in the chairman’s mark for the full House Agriculture Committee to vote on in mid-July. Allowing farmers to choose which program they prefer would compromise between groups who oppose the change and those who back a revenue-based program, including the Bush administration. As the farm bill progresses, farmer decisions could determine which is the better option.”
III. Renewable Energy
Philip Brasher, in an article published in Sunday’s Des Moines Register, reported that, “Shrinking that dead zone in the Gulf of Mexico will be much more costly than first thought.
“A group of scientists that looked at the problem during the Clinton administration targeted agricultural runoff in the Midwest as the main source of the problem and called for a 30 percent reduction in the amount of nitrogen flowing into the Gulf.
“A new panel of scientists believes it’s going to take a far bigger reduction in nitrogen than that, on the order of 45 percent, according to a draft report.”
The Register article added that, “Moreover, the report says that biofuels will likely make the problem worse, because of the increase in corn acreage and use of nitrogen fertilizer needed to keep with the demand for ethanol.
“Encouraging more production of corn-based ethanol, in fact, ‘could nullify other efforts’ to reduce the dead zone, the scientists say.”
Dan Chapman reported in Sunday’s Atlanta Journal-Constitution that, “‘There’s only so much corn you can grow in this country,’ said U.S. Sen. Saxby Chambliss (R-Ga.). ‘We’ve simply got to move away from [corn] and have some alternative products, and cellulose is one of the most promising resources.’
“Chambliss, ranking minority member on the Senate Agriculture Committee, has introduced legislation to boost fuel derived from pine trees and other ‘cellulosic’ sources. Georgia, lo and behold, is home to 24 million forested acres.”
The article indicated that, “Even with a bushel of corn flirting with $4, corn ethanol remains the renewable-fuel choice. And, with prices expected to fall, it’s too early to drop dirt on corn’s coffin.
“‘Farmers across the country planted the most corn since World War II,’ said Matt Hartwig, spokesman for the Renewable Fuels Association, a Washington trade group. They’ll produce ‘more than enough corn to satisfy the needs for food, feed and fuel. All industries that utilize corn will be able to thrive. Corn ethanol is here to stay.’”
Keith Good
