In writing the last column, I was concerned that perhaps I was making too big a leap from Ambassador Robert Zoellick’s pledge to reform the U.S. cotton program to the supposition he would allow cotton to be singled out in the new Doha Round agreement.
It turns out I needn’t have worried. Shortly after I wrote that column, Zoellick signed off on a new WTO framework agreement that sets up a negotiating process that could allow Brazil, China and other competitors to create all kinds of mischief for U.S. cotton producers.
Specifically, the agreement calls for a new subcommittee on cotton that would meet periodically to ensure “appropriate prioritization of the cotton issue independently from other sectoral initiatives.”
This after the National Cotton Council wrote Zoellick asking him not to allow cotton to be singled out for “special treatment” in the framework agreement that was then being negotiated in Geneva, Switzerland. (The agreement was concluded Aug. 1.)
Over the last 18 months, U.S. cotton farmers have watched with amazement as a British charity organization, OxFam International, orchestrated a campaign that succeeded in painting them as being solely responsible for the impoverishment of millions of African farmers and other of the world’s woes.
The campaign was aided by national media outlets like the New York Times and Wall Street Journal that have prattled on and on about government payments to big, corporate farmers while conveniently overlooking the tax breaks they receive.
Zoellick did say any cuts in U.S. farm programs would have to be matched by reductions in tariff barriers to U.S. exports. “We have a framework for cuts,” he said, “but the numbers are going to depend on what we get in market access.”
But negotiators did not agree on how the barriers would be lowered although Zoellick reportedly promised the United States would cut export credit and some cotton program subsidies and reduce those for corn, wheat, rice and soybeans by 20 percent in the first year of the agreement.
Given the U.S. track record on pushing China to live up to its WTO commitments, I would look for the tariff barriers to fall later rather than sooner.
The New York Times reporter covering the Geneva negotiations said there were no Champagne toasts, but that delegates left with a “sense of a job well done.”
“This is the beginning of the end of all subsidies,” it quoted Celso Amorim, the Brazilian foreign minister, as saying “Export subsidies are now gone, and trade-distorting subsidies are on their way out.”
The newspaper called Amorim “the star of the negotiations” because of his role as spokesman for a group of developing nations that have been calling for cuts in the U.S. cotton program and the European Union’s sugar subsidies.
The Times’ article made no mention of the near-zero interest rate loans to farmers or export tax rebates Brazil uses subsidize its farm sector. But then that’s what we’ve come to expect from the Times.