EU, Australia, Argentina, Brazil join Canada in WTO complaint against U.S. corn subsidies

[Judi Lynn]

EU, Australia, Argentina, Brazil join Canada in WTO complaint against U.S. corn subsidies
By Bradley S. Klapper
ASSOCIATED PRESS

9:29 a.m. January 22, 2007

DAVOS, Switzerland – The European Union, Australia, Argentina and Brazil have joined Canada in a complaint against the United States over what they claim are illegal government handouts to American corn growers, trade officials said Monday.

The request for consultations, filed by the four trading powers and others at the Geneva-based World Trade Organization, threatens a major commercial dispute at a time when global free trade talks remain stalled over agricultural tariffs and subsidies and the U.S. begins debating a new multibillion-dollar farm bill.

Under WTO rules, a three-month consultation period is required before a country can ask the trade body to launch a formal investigation. A WTO case can result in punitive sanctions being authorized, but panels take many months, and sometimes years, to reach a decision.

Canada lodged its complaint on Jan. 8, claiming that some $9 billion paid out by the U.S. annually in export credit guarantees and other subsidies unfairly and illegally deflated international corn prices.

“This is not just about corn,” said Clodoaldo Hugueney, Brazilian ambassador to the WTO. “Brazil is the world's largest ethanol exporter, so this is an important issue for us.”
(snip/...)

http://www.signonsandiego.com/news/business/20070122-0929-wto-us-corn.html

[TheFarseer]

1. tell the WTO to eat sh*t

we're getting hosed on glabal trade and they have the nerve to complain about an industry we can almost actually compete in? GO TO HELL, WTO!

[Odin2005]

2. The fucking corn lobby is why all out food is stuffed with HFCS.

[TheFarseer]

5. and that would be better how

if we let Brazil put our American family farmers out of business?

[Solon]

10. U.S. Corn subsidies are the biggest reason why Mexican family farmers...

are losing their land. Also, the family farmer is rare in the states, our biggest food producers are agri-businesses, like ADM.

[Amused Musings]

4. I respectfully disagree

I think that ending farm subsidies in the US and Europe would go a long way to imprving the wealth in the Developing World. That is their main complaint in the Doha round and I agree with them. Would the prosperity reach all levels? Probably not, but I think it is a step in the right directio and food will be more affordable in the US

[TheFarseer]

8. I think we make a mistake when we

sacrifice of ourselves to help the "developing world" How many industries are we going to lose before we start looking out for our own country and our own workers? We can't compete with slave labor and technology theft. I wish we would be protective of other industries as well. Although I can't agree with corporations and other non-farmers getting paid farm subsidies. I think that is a problem. How eliminating farm subsidies would make food cheaper is anyone's guess. For starters, the price of corn has absolutely nothing to do with the price of Corn Flakes.

[Solon]

11. This has nothing to do with sacrifice, and everything to do with actually following the treaties...

WE SIGNED. I may not like, you may not like it, but we signed it, now we should follow it.

[TheFarseer]

12. That's what I'm saying - pull out of WTO

I thought that was a popular position around here? BTW - to say there aren't many family farms around anymore is a half-truth at best. There are less overall farms yes, but there's nothing but family farms around here (when you get out of Omaha, that is).

[Solon]

13. I agree, in theory...

But I can't fault nations such as Brazil or Argentina for trying to get the best deal they can out of an organization they were pulled into. We always push this "free trade" mantra, at least officially, if we abandoned it, we can then subsidize whatever industries we want. By the way, I didn't say there WEREN'T family farms, just that they were rare. Most food grown in the United States is grown on farms owned by multi-national corporations, this is just a fact.

[pampango]

15. Let's pull out of the UN as well. They have no more right to tell

us what to do than the WTO does. In both cases we joined and agreed to a certain set of rules. But as a sovereign nation we have a right to pull out of any international organization that we want to and then go about doing whatever we want.

Sometimes I lose sight of which side of the political spectrum is the isolationist/protectionist side.

[pampango]

9. Agreed. The developing world has consistently held the

position that agricultural subsidies in the US and Western Europe contribute greatly to poverty in their countries. Their agricultural sectors often can't compete with subsidized Western corporate farms.

I love the emotional reactions you get here at DU to any effort of the WTO to regulate whether the US lives up to economic agreements it has signed with other countries. Always interesting to see good ol' American nationalism raise its head on a progressive board like this.

Most of us support the role of the UN to mediate political disputes between sovereign nations. There needs to be some international agency, the WTO or create a new one, that resolves disputes in the implementation of economic agreements that countries have signed with each other.

[fujiyama]

19. Who set up organizations like the WTO

to dictate to the world (and especially developing nations) how to go about trade?

It was the US, and US based multinationals.

Either we must abide by treaties we signed or leave them altogether. But once we do, we shouldn't expect other countries to keep their markets open to US goods. Fair is fair. People here bitch about China and Japan having high tarrifs on goods and they have a point with regards to our expanding trade defecit. But it would be hard for anyone to take the US seriously if we left the organizations altogether.

[Judi Lynn]

3. Small look at Brazil's ethanol industry:Brazil To Gain 123 New Biofuel Plants By 2010

CN_Today 1/22/2007 4:42:00 PM

Brazil To Gain 123 New Biofuel Plants By 2010

SAO PAULO (Dow Jones)-Brazilian companies and other investors are likely to invest an estimated 17.4 billion Brazilian reals ($8.1 billion) in the country’s biofuels sector over the next four years, which should yield a confirmed 77 new ethanol mills and 46 new biodiesel plants by 2010, said the Energy Ministry on Monday.

“By the end of 2010, Brazil should have the industrial capacity of producing 23.3 billion liters of ethanol, and the industrial capacity of producing 3.34 billion liters of biodiesel,“ said a Mines & Energy spokesman in a phone interview with Dow Jones Newswires.

If these investments come through, Brazil is set to produce about 33% more ethanol in four years’ time than the roughly 17.5 billion liters of ethanol the country is expected to produce in its 2006-07 sugarcane season (May-April).

At the same time, the country is also on track to produce four times more biodiesel by 2010, compared to the roughly 840 million liters of biodiesel that local companies are set to deliver to state-owned oil firm Petrobras SA by the end of this year.

The majority of the BRL17.4 billion to be invested will come from the private sector, said the spokesman.
“These are projects that are confirmed - they have either started construction already or have the financing all set,“ he said.
This amount also includes two possible ethanol pipelines spanning a combined total of 1,150 kilometers currently under discussion by Petrobras, he added.
The first of these pipelines is an ethanol-dedicated pipe running from the center-south state of Goias to Sao Sebastiao port in Sao Paulo state.
(snip/...)

http://www.cattlenetwork.com/content.asp?contentid=99758

[Massacure]

17. And they are burning down the rain forrest to do it.

[Amused Musings]

18. This is unfortunate and one

of the costs of Brazil being "energy independent." Unfortunately, rain forests that are destroyed with slash and burn methods (or any for that matter) are exhausted quickly. I think Anthropologists are pretty sure similar methods caused the catastrophe that ended the Mayan civilization. Granted, I do not know if they still do slash and burn, but I have not heard of any across the board change of practice.

[Judi Lynn]

23. Thanks for the info. I must say I didn't know the ethanol was being produced

with land which was formerly the rain forest. I actually believed it was the ranchers who took the wood first, on misappropriated rain forest land, then turned it into grazing ground for their cattle industry.

Didn't know. Very, very sad.


http://www.rainforest-alliance.org/locations/brazil/non-timber.html

One wonders what this map looked like 20 years ago and more!

[Pavulon]

6. Welcome to the new big commodity (energy/food)

as we transition on to ethanol and bio diesel (hopefully) we will control a massive renewable energy source. This is a tremendous cross platform issue. Any person who opposes this will out them self as a puppet of energy firms.

We can support our farmers by increasing demand for something we grow here and use a cleaner energy source, not provided by nations run by religious fanatics, communists, and opec price gougers.

This market shift has a great potential to be a fuck you to the traditional petro states. Who would you rather your cash go to, a guy in iowa or some ass who paid for 9/11 or runs around in a red shirt telling us to get fucked. Watch what happens to these guys if we redirect energy dollars. They will be truly screwed.

See what happens to the petro states when the demand for product falls and the cost to eat goes up.

[madrchsod]

7. tough shit

we`ll keep our corn here in the usa and see what the world has to say...

[robcon]

14. The Eu complaining about subsidies.

is the height of hypocrisy.

[Mudoria]

21. That's the most amazing part of the whole thing

some place like France complaining when if the French government even hints they may stop a farm subsidy their farmers attempt to shut the country down in protest. The hypocrisy of it is hilarious.

[George1984]

16. It's amazing to see

that when the WTO rules against another country in favour of the U.S it is great organisation, such as lumber in Canada, and grain in the EU. When things are brought up to the WTO by other countries, many state "the WTO can f*ck off", or "we will just keep our corn" etc. Unfortunately the rules are supposed to be the same for everyone, and sometimes they rule in favor and sometimes they rule against. That is how trade works, as it is a compromise. This keeps the field level for everyone, so countries like the U.S. who has a labor wage that far exceeds countries like Brazil and Argentina, still can compete. Why does that seem difficult for people to grasp?

[Nihil]

20. Simple answer

> Why does that seem difficult for people to grasp?

Because things like that simply don't apply to the USA unless the USA
wants them to (i.e., unless it gives them an advantage). Any pretence
at wanting a "level playing field" is pure political bullshit.

cf., the "right" to "pre-emptive attacks" ... imagine the cry that
would go up if someone pre-emptively attacked America and caused the
loss of life on a scale that we've seen in Iraq ...

One law for the rich, another for the rest of the world.

[MadHound]

22. The trouble is, if you pull corn subsidies you will be hurting those who are least able to bear it

Family and small farmers. The large corporate ag farms won't suffer, they'll simply pass the price on to you, the consumer. However the small farmers simply can't afford to do that, and this move will drive many, many of them out of business.

And meanwhile as these various nations complain about US corn subsidies, they refuse to lift their own crop subsidies:shrug:

Sorry, but this is a horrible idea. Removing these subsidies won't help anybody, and will do immense harm to the small farmer.

[robcon]

25. I disagree MadHound. Every corn farmer benefits, every taxpayer pays.

The subsidies enable the bigger ag farms to compete in the global market and export corn. There is NO justification to subsidize corn, anymore than subsidizing plywood, sugar and the other "protected industries.

[MadHound]

26. We'll have to agree to disagree then

I live in the country, in the corn belt. While I grow fruit, berries and other niche crops, my neighbors are growing the standards, corn, wheat, soybeans, raise cattle, hogs, etc. I know the margins that these small farmers operate on, and frankly if you pull their pittance of a subsidy from them, they won't be making any sort of profit. Meanwhile large ag corporations have the financial resources to withstand this sort of economic shock long enough to pass the cost on to the user.

In addition, subsidies are sometimes the only income a small farmer gets in a year. Drought has been ravaging my locale, and while the corporate farms can turn to other locations where they have farms, to get income from an area that isn't suffering from drought, a small farmer doesn't have this sort of option. Therefore he is dependent on the income from subsidy to keep his operation together.

And frankly, when it comes down to it, having people in the EU, Canada, Brazil, etc. scolding us about subsidies is hypocritical. Take a look at the regulations these countries have enacted to protect their own farmers and markets from American crops. Canada subsidizes lumber, mining, agriculture and steel. Brazil subsidizes agricultural products, mining, coffee, and ooo, the practice of slash and burn farming in the Amazon. And don't even get me started on EU crop subsidies. Hell, France has, for all practical purposes, banned US wine from being imported into their country, an issue that has been getting knocked around the EU for over eight years now.

Look, in an ideal world, with a truly free marketplace, we wouldn't need to subsidize our agriculture. But with the increasing threat that corporate agriculture poses to the small farmer, and the refusal of these self same countries to lift their own subsidies, I think that it is only right, for now, to continue these subsidies. Rather than having one country, the US, remove such subsidies, let's work towards having all countries remove their subsidies.

[ryanmuegge]

27. Actually, no matter what the WTO does, it's a fucking criminal organization. Period.

[pampango]

28. It needs to be replaced then, but there has to be some

international agency or mechanism to enforce rules of trade between nations - rules that any member country has already agreed to. If a nation does not like the rules of trade, they can either not join or negotiate different terms before they join. You can always negotiate changes later on as well.

Once a nation agrees to follow a set of trading rules, these rules need to be enforced by some international entity. Otherwise, a country would agree to a comprehensive set of rules then only follow those that were advantageous to them. If every country does that you don't have much of an international trading system.

[Moby Grape]

24. have US subsidies been eclipsed by higher corn price?

corn prices are way up,
what are the 'trigger points'?

.