The American Soybean Association (ASA) today outlined the concerns of its 26,000 producer members before the House Committee on Agriculture regarding the compromise advanced by the World Trade Organization (WTO) Agriculture Committee Chairman Stuart Harbinson, which proposes much smaller percentage reductions in tariffs, and allows self-designated developing countries to exempt "special products" from any cuts.

"The Harbinson approach falls well short of achieving ASA’s goal to offset increasing global production of oilseeds and oilseed products through expanded market access for soybeans, soybean products, poultry, pork, beef, and dairy," said ASA First Vice President Ron Heck, a soybean producer from Perry, Iowa. "The Administration needs to develop an alternative or risk failure at the upcoming WTO negotiations in Cancun, Mexico in September. Our purpose for raising concerns is not to undermine support for reaching an agreement on agriculture in the Doha Round, but to build support for a successful agreement."

ASA strongly endorsed and continues to support the United States proposal first advanced by the Clinton Administration in 1999 and reaffirmed by the Bush Administration last year. In the area of export competition, ASA supports the Administration’s proposal to phase out export subsidies and to establish common rules for export credits and government-backed financing programs used by all exporting countries. ASA opposes continuing the Uruguay Round approach of equal percentage reductions in trade-distorting domestic support, which would preserve the significant advantage enjoyed by the European Union.

"ASA also finds totally unacceptable Harbinson’s proposal that would allow developing countries, including Brazil, to fund major programs to develop and expand their agricultural production and transportation infrastructure without discipline while similar programs in "developed countries," including the United States, are subject to reductions," Heck said. "If the purpose of the Doha negotiations is to reduce trade-distorting practices, it should not require sharp reductions in support in developed countries while giving equally-competitive developing countries a blank check to expand similar programs."

Harbinson would subject food aid programs to various disciplines, including replacing donations of agricultural commodities and food products with monetary contributions. This approach is not acceptable to ASA and other commodity organizations that view food assistance as an important market development tool as well as a means to help feed the poor in other countries. ASA and other agriculture groups are circulating a letter addressed to United States Trade Ambassador Robert Zoellick detailing a number of concerns with the Harbinson text.

"While we support regional or bilateral negotiations, particularly with countries that offer significant opportunities for U.S. agriculture," Heck said, "ASA’s top trade priority is to obtain a meaningful WTO outcome. The WTO offers the best prospects for achieving a significant improvement in worldwide market access and the global income growth that is so critical to the future success of U.S. agriculture."

Heck told the Committee that the United States must substantially increase market access through aggressive reductions in tariffs and elimination of non-tariff barriers on soybeans, soy-based products, poultry, pork, beef, and dairy. Heck said this is particularly important in populous developing countries in Asia, where per capita consumption of animal protein and vegetable oil is currently low. As global production and exports of soybeans and soy-based products increase in coming years, the U.S. must make demand and imports grow as well.

Exports of U.S. soybeans, soybean meal and soybean oil have expanded to the equivalent of 1.4 billion bushels, while exports of soy-fed pork and poultry products accounted for an additional 130 million bushels in 2002. Taken together, exports of soybeans and value-added soybean products represented 53 percent of last year’s total U.S. soybean production.

Past trade agreements have been beneficial for U.S. soybean producers. Under the North American Free Trade Agreement (NAFTA), U.S. soybean exports to Mexico doubled. The free trade agreement with Chile that President George W. Bush signed in early June will improve market access for U.S. soybeans. The Free Trade Agreement of the Americas and Central American Free Trade Agreement will also be beneficial to the U.S. soybean growers, and the Southern Africa Customs Union free trade agreement can be of some benefit for both commercial and humanitarian purposes.

U.S. soybean producers have seen the benefits of tariff reductions under the Uruguay Round and NAFTA in the form of expanding foreign demand and exports in the years since these agreements were completed. While the U.S. soybean and livestock industries have benefited greatly from the growth in foreign demand and imports, competition is from other exporting countries.

"To protect against devalued foreign currency exchange rates, cut-rate pricing resulting from hidden subsidies, lack of enforcement for intellectual property rights, and discriminatory trade practices, the United States must maintain an adequate farm income safety net for U.S. producers," Heck said. "Competitors such as Brazil must be subject to the same commitments and disciplines regarding domestic support that we are required to meet in the United States."