The American Soybean Association (ASA) is pleased with the framework agreed upon in the Doha round of World Trade Organization negotiations; the National Cotton Council (NCC) is concerned about cotton-specific language in the framework.
“The framework provisions will be viewed as generally positive by most sectors of U.S. agriculture, since they don't appear to be so restrictive as to preclude maintenance of a workable farm program,” says Mark Lange, NCC president and CEO.
In fact, ASA's reaction is positive. “This is as balanced a framework as could be expected, and we look forward to working closely with our negotiators as this process enters the next critical phase,” says ASA President Neal Bredehoeft, a soybean grower from Alma, MO.
The framework provides an opportunity to achieve significant improvement in market access for soybean and livestock products, which is ASA's most important objective in the Doha negotiations. ASA supports the stated position of the U.S. negotiating team that the extent to which trade-distorting domestic farm supports are reduced must be matched by meaningful gains in market access through tariff reduction and higher tariff rate quotas on import-sensitive products.
However, NCC's Lange says the cotton industry's major concern is the specific references to cotton.
“Singling out cotton as a separate issue is both unfair and inappropriate,” he says. “Unfortunately, this initiative has been influenced by poor economic analysis. Particular emphasis on U.S. cotton is unjustified and unwarranted — the world cotton market is much more than the U.S. The U.S. has not increased cotton production, but we have seen a surge in foreign production, particularly in China and Brazil.”
However, ASA does have concerns with how the product-specific spending caps that are to be imposed on trade-distorting programs included in the so-called Amber Box will be administered.
Depending on the historical period chosen for establishing these ceilings, some commodities could be treated significantly better than others, which would skew production incentives under the Farm Bill.
“Global demand for high protein soybean meal and vegetable oil is rising rapidly, and U.S. soybean producers don't want the farm program to provide disincentives for increasing soybean production as we seek to maximize our share of this growing market,” ASA's Bredehoeft says.
NCC's Lange has a different take: “It isn't the domestic subsidy provisions of the Framework Agreement that are the source of our concern. We continue to be troubled by the specific references to cotton.”