CONTACT:  Tanya Augustson           (202) 347-0228         taugustson@beef.org

                  Karen Batra                   (202) 347-0228         kbatra@beef.org

World Trade Talks at Critical Juncture for U.S. Agriculture

NCBA Urges Congress to Resolve Market Access Issues in Doha Round

Washington, D.C. (November 2, 2005) – Wythe Willey is an Iowa cattle producer and past president of the National Cattlemen's Beef Association (NCBA). In testifying before the U.S. House of Representatives Committee on Agriculture today, Willey is urging forceful U.S. leadership as trade negotiators enter a critical phase in the multilateral Doha Round of World Trade Organization (WTO) negotiations:

“We must come together and resolve market access issues in preparation for the upcoming Sixth World WTO Ministerial Conference in Hong Kong Dec. 13-18. U.S. cattle producers urge trade negotiators to break down barriers to U.S. beef and create increased global market access opportunities through tariff reduction.

“NCBA members have long believed the greatest trade benefits can be obtained via the multilateral WTO negotiating process. U.S. grain-fed beef has a unique place in the global food economy and U.S. cattle producers know, as a result of our investments in technology and science-based animal health and inspection systems, that we produce the highest-quality, safest beef in the world.

“The goal of U.S. agricultural trade policy should be to make our product as competitive as possible in the world market.  Increased market access through tariff reduction is the core mechanism by which U.S. cattle producers can thrive in the global marketplace. For our industry, this ultimately depends on the percentage of tariff reductions in the agreement, since U.S. beef producers receive no domestic supports or export subsidies.

“Unlike free trade agreement negotiations, where tariff rates would be reduced to zero over time, these multilateral negotiations focus on reducing WTO bound tariffs, which are the maximum tariff rates that WTO members may impose on imports. Currently, Japan’s bound tariff on beef is 50 percent; Korea’s is currently 40 percent; and the European Union is at a whopping 57 percent!

“NCBA supports the U.S. proposal for WTO Agriculture Negotiations* that could potentially reduce such bound tariffs to around 7.5 to 12.5 percent. Currently, the U.S. proposal is the only market access proposal that meets our criteria. The proposal set forth by the European Union last week is unacceptable from our standpoint.  Every effort must be made to prevent the noteworthy U.S. proposal from being watered down during talks.

“In addition, as the painfully slow – 22+ months and counting – process of reopening the Japanese market to U.S. beef continues, we are also reminded that the reintroduction of U.S. beef will undoubtedly trip Japan’s “snapback” or volume safeguard provision. Once triggered, Japan’s tariff on all beef imports will automatically be kicked up to its 50 percent bound rate for the remainder of Japan’s fiscal year, ending March 31. The fact that the total volume of Japanese beef imports will still be significantly below 2003 levels will be irrelevant.

“Japan’s “snapback” provision on beef is arguably the most egregious use of such a mechanism anywhere on the planet. NCBA is asking that Congress and our negotiators seek any and all remedies in the WTO that might move Japan to rescind this ill-conceived obstruction of trade.

“The inability to significantly reduce high tariffs constitutes a failure of these negotiations in the eyes of U.S. beef producers. This is not to say that we do not greatly welcome efforts to significantly reduce domestic supports and exports subsidies when it comes to beef. The level of government support for cattle producers is incredibly high in many countries, including the European Union (EU) nations and South Korea.

“Research consistently shows that all economies, regardless of their economic stature, actually benefit more from tariff reductions, which lead to increased market access opportunities, than by reductions in agricultural domestic supports or export subsidies. More importantly, developing countries stand to gain the most from improved market access in global agricultural trade.

“In addition, for U.S. cattle producers to get maximum benefit from tariff reduction, greater assurances must be made on the part of our trading partners to eliminate unjustified sanitary and phytosanitary (SPS) as well as technical barriers to trade.

“Lastly, we believe the United States must continue its strategy of simultaneously pursuing multi-lateral and bilateral trade agreements. NCBA supports the Administration’s efforts toward 12 new free trade agreements (FTAs), and we anxiously await the potential benefits of a South Korean FTA that should mitigate any shortcomings of the WTO negotiations.

“U.S. cattle producers believe the WTO is the only mechanism capable of generating the political force necessary to move the agricultural trade reform process forward. Without forceful U.S. leadership in this multilateral context, U.S. beef producers will undoubtedly suffer under the trade distorting forces of mercantilism and protectionism. We are now at a critical juncture in this process and we urge your support.”

*For more information on the U.S. Proposal for WTO Agriculture Negotiations go to: www.ustr.gov.

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