Letter to The Honorable Susan Schwab, United States Trade Representative

Letter

Senator Thune Meets with U.S. Trade Representative Susan Schwab

-Urges Protection of U.S. Agriculture and Farm Bill Programs in Upcoming Trade Talks -

U.S. Senator John Thune and three other members of the Senate Agriculture Committee met July 17 in an executive session with U.S. Trade Representative Susan Schwab to discuss her negotiating positions on agriculture during World Trade Organization (WTO) talks, which resume in Geneva, Switzerland, on July 21, 2008.

"It's no secret that certain farm program payments authorized under the 2002 Farm Bill have been under intense scrutiny and criticism because they were considered too high or trade distorting by European, South American and other countries," said Thune. "Chairman Harkin, Ranking Member Chambliss, Senator Nelson and I made it very clear to Ambassador Schwab that negotiating away 2008 Farm Bill programs in next week's talks would be unacceptable to us. We backed up our statements by sending Ambassador Schwab a letter signed by 17 members of the Senate Agriculture Committee.

"The 2008 Farm Bill includes new programs I authored or strongly supported such as the permanent disaster program, with its Supplemental Revenue Assistance Payments (SURE) and the Average Crop Revenue Election (ACRE), as well as millions of dollars in mandatory spending for the Biomass Crop Assistance Program (BCAP), which will more quickly transition the United States to cellulosic ethanol production. SURE, ACRE and BCAP have yet to be implemented, and it is uncertain how these programs, which are all very critical to South Dakota's agricultural and ethanol industries, will be treated under WTO. They simply cannot be bartered away next week by U.S. trade negotiators before they get up and running."

A paper released by the U.S. Trade Representative's Office, provides that the United States is already one of the most open agriculture trade markets in the world with average agricultural tariffs of 12 percent. Additionally, 90 percent of the agricultural imports from developing countries enter the United States duty free.

"Open access to foreign markets is extremely important to South Dakota's agriculture industry. However, my greatest concern regarding WTO talks is that due to relentless pressure from other countries focused on our trade negotiators, U.S. agriculture may lose more than it stands to gain. Ambassador Schwab must hold the line on what she offers up for agriculture."

The full text of the letter is below.

July 18, 2008

The Honorable Susan Schwab
United States Trade Representative
600 17th Street, N.W.
Washington, D.C. 20508

Dear Ambassador Schwab:

As you prepare for the World Trade Organization ministerial meeting next week, we want to express our keen interest in the negotiations. Unfortunately our trading partners up until now have not committed to a balanced outcome involving an ambitious result in market access. Reductions in trade-distorting domestic support must be accompanied by real market access gains that are comparable in magnitude and will provide net gains for U.S. agriculture. Anything less will not receive our support.

The October 2005 proposal put forward by the United States would require substantial cuts in U.S. farm programs. These reductions in domestic support were carefully calibrated in relation to market access gains. However, many of our trading partners continue to call for greater cuts in U.S. farm programs while refusing to make significant tariff reductions. The provisions of the most recent text on sensitive products, special products, the proposed new special safeguard mechanism (SSM) and exceptions for recently acceded members do not inspire much confidence that a balanced agreement can be reached.

Twice before, the United States rightly rejected an unbalanced framework agreement and opted instead to continue discussions towards achieving a comprehensive result that will generate new trade flows. Discussion in Geneva must fulfill the underlying mandate of the Round to foster development, yet this objective need not and cannot be an exercise in which developed countries like the United States accept an unbalanced outcome. Neither U.S. agriculture nor individual commodities should have to shoulder an unfair burden of the negotiations. If you are presented with an unbalanced text, we urge you to reject it in favor of continued negotiations.

Very truly yours,

Tom Harkin (IA)
Saxby Chambliss (GA)
Patrick Leahy (VT)
Richard Lugar (IN)
Kent Conrad (ND)
Thad Cochran (MS)
Max Baucus (MT)
Mitch McConnell (KY)
Blanche Lincoln (AK)
Pat Roberts (KS)
Debbie Stabenow (MI)
Lindsey Graham (SC)
E. Benjamin Nelson (NE)
Norm Coleman (MN)
Ken Salazar (CO)
Mike Crapo (ID)
Sherrod Brown (OH)
John Thune (SD)
Robert P. Casey Jr. (PA)
Charles Grassley (IA)
Amy Klobuchar (MN)