There has been some talk on food prices, I found this interesting article that talks about the effects of subsidies on producers in developing countries
WTO launches probe into US farm subsidies
Trade and industry Correspondent
IN A groundbreaking move that could break the impasse in the Doha round of multilateral trade negotiations, the World Trade Organisation (WTO) this week launched an investigation into the US's trade-distorting agricultural subsidies, particularly of maize, but also other crops.
The complaint was brought by Canada and Brazil, but SA is among a number of prominent countries, including the European Union, India, Japan, Australia, China, Mexico, Chile and New Zealand, which have joined the case as third parties.
It is the first time that SA will participate in the proceedings of a WTO case. In terms of WTO rules, third-party rights have to be fully considered in the dispute.
As a major maize producer with meaningful export interest, SA's economic interest in the case is significant. The original complaint was brought at the beginning of this year by Canada, which sought to challenge US levels of agricultural support.
Reuters reports that the WTO's probe comes hot on the heels of the US Senate passing a $286bn farm bill, following a similar bill from the House of Representatives in July.
The White House threatened to veto the bills, saying they failed to overhaul crop subsidy rules.
Canada and Brazil charged that US support since 1999 had far exceeded its limit of $19,1bn a year. Hilton Zunckel, a trade lawyer with Floor Attorneys, said the likelihood the case against the US could succeed was "quite good" and followed the successes Brazil had in litigating against the US on cotton subsidies.
It had been anticipated that litigation in the trade arena would increase in the absence of progress on a meaningful reduction in agricultural subsidies.
US subsidies for agricultural goods are viewed as responsible for suppressing global prices of agricultural products and harming farmers who make do without such support. Canada and Brazil's motivation was to push for a levelling of the playing field.
But analysts believe the move could also bring fresh impetus to multilateral trade negotiations.
Global trade negotiations over the past six years have failed, largely over the contentious issue of farm subsidies.
The case will add to the general pressure on the US to reform its stance on agricultural subsidies and could bring that country to return to the negotiating table with more meaningful concessions on subsidies.
Farming industry analysts said research showed that US exports of some key crops would virtually cease without subsidies, which could see world prices increase by as much as 7%.
"If the case does not go their way, there will be immense political pressure on the US to reform subsidies," said Zunckel.
Reuters reports that Washington lamented the investigation, saying much of the support being challenged had already been discontinued.
October figures for 2002-05 provided by the US showed that agricultural support averaged $15,9bn a year over the period. Zunckel said while the US said it would defend its agricultural subsidies, it was revealing that its agricultural secretary Chuck Connor recently expressed serious doubt about the WTO compatibility to the US's agricultural programmes.
Times Media Limited
WTO launches probe into US farm subsidies
Trade and industry Correspondent
IN A groundbreaking move that could break the impasse in the Doha round of multilateral trade negotiations, the World Trade Organisation (WTO) this week launched an investigation into the US's trade-distorting agricultural subsidies, particularly of maize, but also other crops.
The complaint was brought by Canada and Brazil, but SA is among a number of prominent countries, including the European Union, India, Japan, Australia, China, Mexico, Chile and New Zealand, which have joined the case as third parties.
It is the first time that SA will participate in the proceedings of a WTO case. In terms of WTO rules, third-party rights have to be fully considered in the dispute.
As a major maize producer with meaningful export interest, SA's economic interest in the case is significant. The original complaint was brought at the beginning of this year by Canada, which sought to challenge US levels of agricultural support.
Reuters reports that the WTO's probe comes hot on the heels of the US Senate passing a $286bn farm bill, following a similar bill from the House of Representatives in July.
The White House threatened to veto the bills, saying they failed to overhaul crop subsidy rules.
Canada and Brazil charged that US support since 1999 had far exceeded its limit of $19,1bn a year. Hilton Zunckel, a trade lawyer with Floor Attorneys, said the likelihood the case against the US could succeed was "quite good" and followed the successes Brazil had in litigating against the US on cotton subsidies.
It had been anticipated that litigation in the trade arena would increase in the absence of progress on a meaningful reduction in agricultural subsidies.
US subsidies for agricultural goods are viewed as responsible for suppressing global prices of agricultural products and harming farmers who make do without such support. Canada and Brazil's motivation was to push for a levelling of the playing field.
But analysts believe the move could also bring fresh impetus to multilateral trade negotiations.
Global trade negotiations over the past six years have failed, largely over the contentious issue of farm subsidies.
The case will add to the general pressure on the US to reform its stance on agricultural subsidies and could bring that country to return to the negotiating table with more meaningful concessions on subsidies.
Farming industry analysts said research showed that US exports of some key crops would virtually cease without subsidies, which could see world prices increase by as much as 7%.
"If the case does not go their way, there will be immense political pressure on the US to reform subsidies," said Zunckel.
Reuters reports that Washington lamented the investigation, saying much of the support being challenged had already been discontinued.
October figures for 2002-05 provided by the US showed that agricultural support averaged $15,9bn a year over the period. Zunckel said while the US said it would defend its agricultural subsidies, it was revealing that its agricultural secretary Chuck Connor recently expressed serious doubt about the WTO compatibility to the US's agricultural programmes.
Times Media Limited