Current Status of Trade Agreements and Negotiations: Trade continues to be a contentious issue as the uneven impacts of trade become more evident with some benefiting while others lose their jobs. Trade talks and negotiations are conducted under the auspices of the World Trade Organization. The current round of trade negotiations are called the “Doha” development round because for the first time ever trade talks focus on the needs of the developing countries. But, the talks are in trouble and are now stalled. The key sticking point is agriculture.
Since the collapse of the World Trade Organization global trade talks in Cancun in September, 2003, the Administration has announced its intentions to more vigorously pursue bilateral and regional trade talks. The Administration has just completed negotiations for the Central America Free Trade Agreement with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. To take effect, Congress has to approve the agreement. The Administration is weighing whether to submit the agreement to Congress during this election year. Since the text of this agreement was just released in late January, it is still under review by the USCCB. The Administration also hopes to conclude trade talks called the Free Trade Area of the Americas with all of Latin America and the Caribbean in 2005.
The Administration is also conducting a series of other negotiations, including with the South African Customs Union and several other bilateral talks.
Responsibility for Policy Development and Trade Negotiations: The US Trade Representative, Ambassador Robert Zoellick, is the President’s key advisor on trade policy and supervises trade negotiations. In the Congress, the Congressional Oversight Group was created by the Trade Act of 2002 to provide a bipartisan group from the House and Senate to work with the President and the USTR to shape and direct trade negotiations and US trade policy. In addition, the Senate and House Agriculture Committees have responsibility for developing agricultural policy and the Senate and House Appropriations Committees determine the amount of actual funds for farm subsidies and other areas affecting general farm policy. The Congress as a whole votes whether to accept or reject particular trade agreements. The President must submit all agreements to the Congress which has 90 days to vote only yes or no on the agreement. An agreement cannot be amended.
Developing Countries: Some 70% of the world’s poor live in rural areas and depend primarily on agricultural related economic activity. Even in some of the better off developing countries 25% of their labor force is still in agriculture. Developing countries are insisting that agriculture be a major focus, if not the centerpiece, of international trade agreements. From 1991-2001, the richer countries spent $330 billion collectively to protect their relatively small agricultural sectors, which is six times the amount of all foreign aid provided by the richer countries. US support for its cotton growers alone is three times US foreign aid to Africa.
Domestic Agriculture and Trade: Agricultural trade is important to the United States. One of every three acres is planted for export and 25% of gross farm income comes from exports. While agricultural exports are important, the way domestic subsidies are currently distributed is unfair to many productive small and moderate sized farms in the US. Approximately 65% of subsidies benefits just 10% of the farms, agribusiness and large entities. These subsidies are not only unfair to many US farmers, but they encourage overproduction and interfere with the ability of many poorer countries to meet their own agricultural needs as artificially low world prices undercut their ability to sell. In addition, there is considerable pressure on developing countries to reduce their farm supports. This has left farmers vulnerable to losing foreign and domestic markets to cheaper, subsidized imports from wealthier nations. The fact that the richer countries have yet to address most aspects of these imbalances is the primary reason for the current stalemate in world trade talks.
Labor and Environment: While agriculture is a major concern, labor and environment issues are also vital and should be integral to any trade agreement and not treated simply as peripheral matters. Migration pressures from poor countries can also be intensified by trade agreements when rural jobs are replaced by imports.
Transparency and Participation: It is critical that the Church and other civil society representatives have an opportunity to participate more fully in shaping trade policy. Trade negotiations often proceed at a rapid pace and are conducted largely in secret. This hinders those representing the poor in sharing their concerns. More productive ways must be found to enable civil society to participate, including having access to the working documents and opportunities to comment upon proposals.
For over a decade, the United States Conference of Catholic Bishops has addressed aspects of international trade. Rather than take a position simply for or against complex trade agreements, the Conference has proposed criteria that should guide trade negotiations. (See Letters of Bishop Ricard to US Trade Representative of February 11, 2003 concerning the Central America Free Trade Agreement and March 24, 2003 concerning agriculture and his statement regarding the WTO meeting in Cancun of September 10, 2003.) In November, 2003, the US Catholic Bishops adopted For I Was Hungry and You Gave Me Food: Catholic Reflections on Food, Farmers and Farmworkers. This statement provides the Conference with its most specific policy on trade directions, particularly as it applies to agriculture.
Domestic Farm Policy:
- Targeting and capping limited government subsidies to small and moderate-sized farms, especially minority owned farms. Rather than simply rewarding production through these subsidies, which can lead to surpluses and artificially low world prices, government resources should reward environmentally sound and sustainable farming practices.
- Reducing the subsidies, tariffs and quotas used by richer countries that severely constrict poorer countries in their ability to sustain their own agriculture;
- Giving developing countries some flexibility (technically referred to as “special and differential treatment”) in using appropriate subsidies, tariffs, quotas and other support measures to make sure they have sufficient food supplies, enhance rural incomes and promote rural development.
- Trade documents should be made available during the process of negotiation for review and public comment;
- Major elements of civil society-including groups representing the poor, business, labor and religious communities-should have greater access to participation in the process;
- Richer countries should provide technical assistance to help poorer countries be able to participate more fully in trade negotiations.
- Trade agreements should treat labor and environmental concerns as integral to trade agreements and not as peripheral matters;
- Trade agreements should lead to economic and social improvements at home and abroad, particularly for poor and vulnerable workers and their families; this can be accomplished by adopting internationally agreed upon labor standards,
- Trade agreements should foster the right to organize and bargain collectively;
- Trade agreements should encourage and not undermine the ability of poor countries to promote environmental protection and sustainable agricultural practices.
- The impact of trade on migration should be concretely addressed when trade measures are considered.
Action Requested: Urge your Senators and Representatives, particularly if they are members of the Senate Finance, House Ways and Means, Agriculture and Appropriations Committees, to consider the USCCB policy principles and proposals as they review and vote on trade agreements.
For further information: Walt Grazer at (202) 541-3182, or Gerry Flood at (202) 541-3167 at the United States Conference of Catholic Bishops; contact Kathy Selvaggio at (410) 951-7449 or Kathy Brown at (410) 951-7232 at Catholic Relief Services.