"Trade is absolutely critical to the success of the family farmer. If the U.S. fails to keep its world trade commitments, our trading partners could cut our exports, which would force down prices and devastate farm income. This amendment will help protect farmers in Iowa and nationwide from facing stiff retaliatory action from our competitors," Grassley said.
In 1994, the United States joined other members of the World Trade Organization to cap the level of trade-distorting support that WTO members provide to agricultural producers. As part of the agreement, the United States agreed to reduce its own trade distorting domestic support, or amber box spending, by 20 percent to $19.1 billion per year. Because agricultural domestic support commitments are now bound under WTO rules, the United States and its trading partners can be subjected to harmful trade retaliation if they violate their commitments.
Grassley's amendment will help the United States meet its trade obligations by forcing Congress to rewrite any portion of the farm program that the Agriculture Secretary finds threatening to the country's WTO commitments. The U.S. Department of Agriculture would be required to suspend the offending programs within 18 months of the determination. "That would give Congress a year and a half to rewrite the provision or reauthorize the legislation, hopefully in a trade compliant fashion," Grassley said.
According to USDA, Iowa farmers exported more than $3 billion worth of corn, soybeans, live animals and red meats in 2000. Nationwide, America's farmers annually export close to half of their soybeans and 20 percent of the corn production.
"Given the importance of export markets to American agriculture, the United States must assume a leading role in eliminating tariffs, excessive trade-distorting subsidies and other barriers to trade," Grassley said.