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This fall, the world will gather in Seattle to begin the 1999 round of multinational negotiations on agricultural trade, according to a Texas Cattle Feeders Association (TCFA) news release. Conducted under the framework of the World Trade Organization (WTO), these negotiations--expected to last several years--will set the tone for international trade for years to come. The negotiations will also largely determine if WTO will assume much-needed leadership in international trade or if it will become nothing more than a toothless dog lying on the porch, unwilling to hunt and unable to back up its bark with any kind of a bite. That's the essence of the message that TCFA took to the Office of the U.S. Trade Representative (USTR) and USDA during a recent field hearing in Austin. The hearing was designed to seek input on stances and approaches that the U.S. should take when negotiations kick off this fall. According to Ross Wilson, TCFA vice president, the U.S. needs to stand firm on the issues and philosophies that have allowed worldwide trade to flourish in recent years. The U.S. also needs to take a firm stand in reforming the WTO dispute settlement process. It's important to accomplish these things, Wilson said, because of the impact that worldwide trade has on U.S. agriculture. "For the beef industry alone, 1998 exports accounted for approximately 8% of total U.S. production and 12% of beef's total wholesale value," he said. Clearly, this indicates that America's farmers, ranchers and cattle feeders are so productive that adopting a protectionist attitude and closing our borders is not an option. That said, Wilson was quick to say that the current system of settling trade disputes between countries can and has worked very well--when both parties are determined to bring the case to a swift and sure resolution. "The current system can also be a dismal failure if one of the parties has a vested interest in delaying compliance indefinitely." As an example, Wilson reminded USTR and USDA about the tactics that the European Union has employed to prevent more than $100 million in U.S. beef from entering its market each year. Their stalling and delaying tactics, possible because of the inefficiency of the WTO dispute settlement process, have caused frustration and anger for U.S. cattlemen for more than a decade. But what's at stake in the current dispute between the U.S. and EU on beef is more than just dollars and dimes. The European Union is undermining the credibility of the WTO and its ability to remain an effective force in global trade disputes. "The integrity and validity of the WTO as a dispute settlement body requires that WTO members promptly comply with recommendations and rulings of the dispute settlement process," Wilson testified. "This blatant stonewalling is unacceptable and requires aggressive and decisive action to address their cavalier disregard of the WTO trade rulings and policy." That's the rub--the WTO has no teeth to bring the EU into compliance. The dispute over the EU beef ban, Wilson said, is a classic example of the primary weakness that currently plagues the WTO--the absence of a timely enforcement mechanism to assure compliance once a ruling is handed down. In fact, Wilson said the bottom line is that there is no incentive for early settlement by the losing party because the current system effectively rewards stall and delay tactics. "It may be time to discuss either shortening the WTO dispute settlement process or providing a mechanism that allows the winning party to be compensated during the time it takes the losing party to implement compliance actions," Wilson testified. "Perhaps some type of escrow account or bonding requirement could be established where the defending party would begin paying when the case is filed or the initial ruling is made." Wilson urged the USTR and USDA negotiators, as they prepare for this fall's talks, to consider the following points: Maintain current language on the strict use of science-based trading rules that were established in the Uruguay Round Agreement. "This is critical to continued expansion of U.S. beef exports. The U.S. red meat industry does not support opening this part of the current agreement for further negotiation." Protect scientifically-approved technologies, such as genetically modified organisms and beef growth promotants that enhance production efficiency or food safety, by establishing science-based rules. Increase access to wholesale and retail trade in importing countries. "This is especially relevant in China, Australia and Canada." Negotiate a reduction and eventual elimination of export subsidy programs. "In addition, stricter disciplines and tougher enforcement mechanisms should be established to prevent the emergence of new schemes to circumvent WTO rules." Negotiate continued reduction in tariffs. "Existing duties in key export markets such as Japan and Korea must be reduced significantly. However, until duties can be eliminated, expand existing tariff rate quotas to permit continued growth in exports." TCFA supports free trade and the World Trade Organization, Wilson testified. "And cattlemen understand that our growth market is beyond U.S. borders. But we need enforceable global trading rules in place that grant market access, settle disputes on the basis of science and reduce tariffs. Anything less and we risk losing the best, and only, global system available for resolving contentious trade issues." |
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