The 2012 farm bill debate will also entail challenges for agriculture in the trade arena, says Gary Adams, National Cotton Council vice president for economics and policy analysis.
“There will be particular focus on the trade dispute with Brazil,” he said at the joint annual meeting of the Mississippi Boll Weevil Management Corporation and the Mississippi Farm Bureau Federation’s Cotton Policy Committee at Grenada, Miss.
“There is expectation that the Brazil case, which has been going on for some eight years, will be resolved in the 2012 farm bill negotiations. Brazil and the World Trade Organization are expecting more changes as we go into the farm bill debate. Consultations between the U.S. and Brazil are taking place on a quarterly basis.”
Brazil has released a list of roughly 120 products on which they would impose higher tariffs under the retaliation provision of the WTO decision, Adams says.
“The products are not limited to agriculture, but range pretty much across the entire economy — from wheat to airplane engines to pharmaceuticals. A lot of sectors are involved, so it has got quite a bit of attention, particularly from the U.S. Chamber of Commerce, because of the impact on manufactured and industrial products.”
He says payments of $147 million per year are being made by the U.S. to Brazil, and “have essentially stopped Brazil’s retaliation.” The payments are scheduled to end with the completion of the 2012 farm bill.
“These negotiations will be part of the 2012 farm bill discussions and hopefully we can get some resolution of the Brazil issue and put it behind us,” Adams says.
There are a number of free trade agreements that are trying to be moved through Congress, “with not a lot of success,” he notes.
“The White House has been attempting to link trade adjustment assistance to passage of free trade agreements and Republicans have opposed that. So, we’ll see if these — among them, Panama, Colombia, and Korea — can move forward.”
Negotiations are also ongoing, he says, for a trade agreement with collection of countries in Asia called the TransPacific Partnership.
In other trade issues, Adams says, the Doha Round of WTO talks “has been laboring along for essentially a decade. They’ve realized they can’t get a full agreement this year, so they’re trying to scale things back to some kind of ‘Doha lite’ package that would target least developed countries.
“Based on what we’ve seen and what has been tossed out, there are no positives in this for U.S. agriculture. The U.S. government is pushing back, but the WTO is going to continue to try for some kind of agreement by the end of this year.
“The cotton industry will fight to be sure there isn’t a bad agreement or a so-called ‘lite’ package that would try to specifically target cotton,” Adams says.