Square pegs in round holes

How the Farm Bill squanders chances for a pro-development trade deal

Publication date: 21 July 2008

When trade ministers from 35 countries gather in Geneva at the World Trade Organization (WTO) for what is being billed yet again as a last-ditch attempt to forge a Doha trade deal, they will be forced to meet an unwelcome guest: the 2008 US Farm Bill.With a host of newly bolstered subsidies that will hurt farmers in developing countries, as well as higher farm payment rates, squeezing the new Farm Bill into the ‘boxes’ defined under existing WTO obligations will be a remarkable trick. That speaks poorly about the willingness of the US to accept new disciplines on agricultural subsidies, and demonstrates that the US Congress is unwilling – thus far – to take the necessary steps for a new trade agreement that would prioritize development.Current proposals to liberalize trade in agriculture and other goods and services without sufficient safeguards will reduce the ability of developing countries to weather shocks like the current food price crisis, especially if rich countries make only cosmetic reforms to their farm subsidies.Rushing into a deal that restores political reputations and accommodates vested interests will not help promote development or offer a solution to the food price crisis. US trade negotiators arrive in Geneva burdened with explaining the contradiction between the stated goal of an ’ambitious’ Doha Round and the reality of increased protectionism and trade-distorting subsidies.