On Saturday, President Bush holds a summit of G-20 leaders where trade and agriculture policy, such as farm subsidies, are sure to come up. The global economic crisis will be a major topic, and a likely proposed solution will be for the countries to come to reach a conclusion on the Doha trade negotiations, which could affect American farmers. The current Doha Development Round is part of a World Trade Organization trade agreement.
A Reuters article by Doug Palmer quoted Deputy U.S. Trade Representative John Veroneau as saying, “I expect there will be some expression of support for the global trading system and the value and benefits of concluding the Doha negotiations as soon as possible.”
The last attempt failed in July, partially because of the Farm Bill that had just passed. The president vetoed the bill, in part to facilitate negotiations, but the U.S. Congress overrode the president’s veto. The bill provided the largest subsidies ever to U.S. farmers — a topic of contention with other countries, who feel this put them at a disadvantage in the global market. Their complaint is that subsidies allow U.S. farmers to sell goods at lower prices than farmers from countries without subsidies.
A main objective of Doha is to reduce global trade barriers, such as tariffs. But developing countries, such as India and China, see large farm subsidies as a barrier as well, because of the unfair advantage they create in the global market.
G-20 countries account for 70 percent of the world’s farmers and 26 percent of the world’s agricultural exports.
The conclusion of Doha would likely benefit American farmers because it would expand and increase their trade options, but because they benefited from the Farm Bill subsidies, negotiations could stall once again.
The recent global economic crisis might make the world leaders put their differences aside and develop a conclusion for the Doha agreement. Such a move could boost global economic confidence and take one issue off the plate of President-elect Barack Obama.