Representing the 25,000 producer-members of the American Soybean Association (ASA), Board member and past-President Bart Ruth, a soybean and corn farmer from Rising City, Neb., testified on the status of agricultural trade negotiations before the U.S. House of Representatives Committee on Agriculture. World demand for soy-related exports, particularly high protein soybean meal and livestock products, is growing rapidly. Expansion of developing economies has spurred rising demand for and ability to afford a more nutritious diet.

"With 96 percent of the world’s population living outside our borders, and most of its growth in countries with low per capita consumption of soy products, our foreign markets will only continue to expand," Ruth said. "U.S. farmers need to compete for these expanding markets, and to do so, we need to bring down tariffs on soy-related products in importing countries, and prevent their replacement with non-tariff barriers."

The purpose of today’s hearing was to review the broad agenda of issues involving agricultural trade, and how these issues have changed considerably over the past decade, as have strategies for addressing them. Ruth presented an overview of the current situation, and then commented on soybean priorities in the World Trade Organization (WTO), Free Trade Agreement (FTA) negotiations, and several other important trade issues.

Since the 1970’s, the U.S. has exported one-half of each year’s soybean crop, either as whole soybeans, soybean meal and oil, or in the form of livestock products. Soybean and soy product exports alone are currently valued at $8 to $10 billion, making the U.S. soybean industry the largest positive contributor to the national trade balance.

"We must require both developing as well as developed country competitors to comply with the same disciplines on production and trade-distorting farm support programs that we must meet," Ruth said. "And we must eliminate the distorting effects of our own domestic farm policies in discouraging soybean plantings when market signals indicate otherwise."

Each of these goals will be addressed during negotiations the agriculture community faces over the next three to four years. Current talks to reach agreement on a framework for agriculture as part of the Doha Development Agenda will reach a critical point at the mini-Ministerial in late June. Even if a framework is reached, actual commitments will need to be negotiated, and the time frame for completion will be uncertain.

ASA was an early and strong supporter of Doha WTO trade proposals to require countries to improve market access by bringing higher tariffs down faster than lower tariffs. ASA has supported making significant reductions in trade-distorting domestic support, provided that countries with comparatively higher levels of support, particularly the European Union, make proportionately greater reductions, and that developing country exporters are subjected to similar disciplines.

"We are concerned that, if countries are able to protect all or most of their sensitive import commodities from meaningful tariff cuts, we won't see the expansion of markets for soybeans, soybean meal, and livestock products needed to justify accepting substantial reductions in domestic support and changes in our export credit program that will dramatically decrease its effectiveness," Ruth said. "A formula must be found that will ensure a significant increase in market access for U.S. soy and livestock products, as well as other key U.S. agricultural commodities."

Of particular concern to ASA is the failure of the various negotiating texts to distinguish between least developed and advanced developing countries by allowing self-designated developing countries to exempt themselves from disciplines required of developed countries. Countries that are world-class producers and exporters of soybeans and other commodities, like Brazil, should not be allowed to exempt themselves from meaningful market access commitments or have the unlimited ability to implement trade-distorting domestic support and export policies.

"ASA is also concerned by efforts to eliminate non-emergency foreign food assistance provided under P.L. 480 Title 1 and other food aid programs," Ruth said. "Assistance in the form of food is essential to help developing countries alleviate poverty, combat diseases such HIV/AIDS, and develop economically. We recommend that any disciplines on food aid be considered separately from reforms in export-related programs, and urge that food aid experts be included in future negotiations."

ASA continues to be concerned by indications that the European Union (EU) intends to ignore its requirements under the 1992 Blair House Agreement of the Uruguay Round of multilateral trade negotiations. Under Blair House, the EU agreed to restrict subsidized oilseed area, and to limit production of oilseeds for industrial purposes on so-called set-aside land. After several reforms, the EU now maintains that its oilseed supports are either not crop-specific or that support has been decoupled and, as a result, the Blair House acreage restrictions no longer apply.

"ASA and other U.S. oilseed organizations believe the EU must be reminded of its Blair House obligations, which have been bound in the EU's WTO commitments," Ruth said. "The United States must be prepared to aggressively challenge the EU if it breaches its obligations."

Regarding FTAs, ASA supports passage of the Central America Free Trade Agreement, Dominican Republic, and Morocco FTAs. ASA welcomes the start of the Andean FTA, and is supportive of the Australia FTA, provided the livestock phytosanitary issues are resolved. ASA is anxious to see the conclusion of the Southern African Customs Union FTA, in which ASA hopes to see soy protein used in a model for supplementary feeding of people receiving anti-retroviral drugs to combat HIV/AIDS, as well as supplementing local diets to fight malnutrition and low productivity.

In regards to trade in biotech-enhanced crops, Ruth said, "U.S. agriculture must confront the growing challenge to our farm exports by non-science-based claims by the European Union that restrict the availability and competitiveness of food products derived from U.S. biotech commodities by imposing stigmatizing labeling and onerous traceability requirements. Unless the U.S. and other biotech producing and exporting countries challenge the EU's Traceability and Labeling regulations, we will continue to lose foreign markets, not only in Europe but in other countries that choose to, or are pressured to, follow the EU's example."