Columns
Thursday, March 2, 2006
common sense on the world trade organization
The World Trade Organization (WTO) may sound like just another distant, irrelevant institution. Think again. The WTO makes trade decisions that have profound implications – for better and sometimes worse – for people here in Iowa. And few are more directly impacted than Iowa’s farmers.
Most recently, WTO members, including the United States, met in Hong Kong in December with the aim of further liberalizing international trade. They had two goals: to cut tariffs and trade-distorting subsidies for agricultural products and to further open markets for services and manufactured goods. Unfortunately, the meeting ended with far more political posturing than real progress. By and large, I support the WTO’s efforts. Iowa’s farmers are among the most productive in the world. And I believe that by carefully liberalizing agricultural trade, we can spur economic growth and create jobs here in Iowa.
I urge Iowans to learn more about the WTO and to carefully follow its deliberations. Here is some basic information to get you started:
What is the WTO?
The WTO is the principal organization where countries negotiate to reduce trade barriers, and where they can seek relief when they have reason to believe that they are victims of unfair trade practices. The WTO’s 149 members include almost all of the developed countries plus more than 120 developing countries. Russia and Vietnam have completed most steps toward becoming members of the WTO and may enter in 2006.
What is the WTO focusing on now?
Currently, the WTO is conducting multiyear negotiations called the Doha Development Round. These negotiations aim to move toward free trade in agricultural goods in three ways: by lowering import tariffs and, thereby, improving market access; by reducing all export subsidies; and by reducing trade-distorting farm-support programs such as marketing assistance loans, countercyclical programs, and price-support programs available to U.S. farmers. Though the December WTO talks were disappointing, trade negotiators will continue working throughout 2006.
How does the WTO affect Iowans?
According to U.S. Department of Agriculture statistics, Iowa farm exports in 2004 were valued at nearly $3.7 billion, making Iowa second only to California as an agricultural exporter. More than 1,500 Iowa companies export at least a portion of the goods or services they produce. The U.S. government frequently participates in the WTO trade dispute resolution process to ensure that key agricultural exports – including those important to Iowa such as corn, high-fructose corn syrup, pork, and beef – have fair access to the world market.
Last October, the U.S. proposed opening up new export markets abroad by significantly lowering tariffs on agricultural products and ending the use of agricultural export subsidies. In return for this expanded market access, Iowa farmers would give up a significant share of the payments they currently receive from farm programs. Along with most U.S. farm and commodity groups, I agree that this is potentially a good tradeoff for farmers. However, I will carefully evaluate any final deal to ensure that it treats Iowa farmers fairly.
