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FLASH: The EU joined China and 5 other WTO members in criticizing The Trump Administration’s $16 billion assistance program for US farmers, indicating the bailout may violate international rules.
The US Department of Agriculture’s (USDA) latest farmer assistance program could exceed America’s WTO subsidy commitments and unduly influence US planting decisions, according to a document published on the WTO website on 17 June.
Last month the USDA said it authorized as much as $16-B in agriculture assistance programs in order to respond to the “impacts of unjustified retaliatory duties on US agricultural goods.”
The Trump Administration said last year that it would deliver as much as $12-B to farmers after Beijing retaliated against US agricultural products.
Over the past 2 years some of America’s largest trading partners have leveled tariffs on billions of USDs worth of agricultural goods to retaliate against President Trump’s duties on steel, aluminum and other goods.
The US has not officially notified the WTO of the program.
It will have the opportunity to respond to Questions at the WTO’s 25-26 June agriculture committee meeting in Geneva.
The EU asked the US for details on the timing and eligibility criteria for the US subsidies and questioned whether the US measures would qualify as WTO-permitted subsidies or subsidies that distort international trade.
China went a step further and alleged that the U.S. program would exceed America’s WTO limits for trade-distorting subsidies if current prices and volumes remain stable.
It could be possible for the US to craft its agricultural purchasing program in a way that adheres to WTO rules as long as the US subsidies do not exceed America’s WTO commitment to cap trade-distorting subsidies at $19-B per year.
“The sheer scale of the proposed US program makes it contrary to the spirit of the WTO’s Agreement on Agriculture, which sought to move governments away from subsidy programs considered by the WTO membership to be most trade distorting” former WTO negotiator said in an interview.
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