Latin American, Caribbean Countries Protest U.S. Agricultural Subsidies Bill
Along with governments from the European Union, Canada and Australia, governments throughout the Americas and the Caribbean have criticized the U.S. farm bill signed into law by President George Bush on May 13. The bill will increase subsidies on American agricultural products by 70 percent over the next ten years.
Brazil's Agriculture Minister has indicated that his country will file a formal complaint with the World Trade Organization against the soybean and cotton subsidies in the bill, saying that these subsidies will devastate Brazilian farmers. Minister Pratini de Moraes estimated Brazilian farmers will loose around $2.4 billion in exports a year, primarily in loss of sales of soy, corn and cotton. He angrily condemned the hypocrisy of the U.S. - on the one hand pushing smaller Latin American countries to give up protectionist tariffs while at the same time spending tens of billions of dollars to subsidize its own farmers.
The reaction has been similar in Argentina where agriculture exports represent a vital source of cash to the economically devastated country. Foreign Minister Carlos Ruckauf has said that Argentina will join Brazil in any formal challenge to the new subsidies in front of the WTO. Describing the farm subsidies as "unilateral", Ruckauf told reporters the "decision was made going against the whole world and it will hurt the whole world." Argentina is one of the region's major exporters of agricultural products, exporting close to $15 billion worth of soy, corn, wheat, vegetable oils, vegetables, honey, lemons and beef annually.
Representatives at the 13th meeting of CARICOM's trade ministers, held last week in Guyana, also condemned the new bill, saying it would devastate farmers in the 15 member nations of the Caribbean Community. While CARICOM had not yet decided to join a formal challenge, chief regional trade negotiator Richard Bernal pointed out the bill "is contrary to the policy direction that the United States has been advocating and encouraging" for the countries of the Caribbean. Guyana, which is the region's largest exporter of sugar and rice, described the bill as a double standard.
CARICOM nations are not just worried about losing lucrative export markets in the U.S., however. Another major concern is that American rice, corn and poultry, now protected by some of the most generous subsidies in the world, will flood Caribbean markets with cheaper products, wiping out these countries' ability to compete in their small but vital home markets. Under pressure from the U.S., most Caribbean nations abandoned protectionist legislation against that kind of market flooding in the 1980s and 1990s in exchange for greater access to the U.S. market.