Agricultural Trade Issues in the 107 th Congress

Publication Date: January 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

The 107th Congress considered a variety of trade issues with implications for the U.S. agricultural sector. Trade in agricultural commodities and food products affects farm income and rural employment, and it also generates economic activity beyond the farm gate. With agricultural export sales the equivalent of about 25% of gross farm income, some policymakers view U.S. efforts to develop market opportunities overseas as vital to the sector’s financial health. Decisions by the Bush Administration, and actions taken by Congress, thus could affect the outlook for agricultural trade.

U.S. agricultural exports are forecast to improve through FY2003. Agricultural groups and their supporters in Congress believe that the pace of improvements depends partly on U.S. trade policies that: (1) aggressively reduce foreign-imposed barriers to U.S. farm products, (2) hold other countries accountable for commitments they have already made in existing trade agreements, (3) resolve festering disputes with major trading partners, and (4) fully use U.S. Department of Agriculture (USDA) export and food aid programs. On the other hand, some continue to press for restrictions on various agricultural imports , to protect U.S. producers from what they view as unfair foreign competition.

On August 6, 2002, the President signed into law fast track, or trade promotion authority (TPA) (P.L. 107-210), to negotiate future trade agreements, capping a lengthy and often contentious debate in the 107th Congress. Many, but not all, commodity and food industry groups favor TPA, arguing it gives U.S. trade negotiators greater credibility and facilitates the passage of legislation to implement future trade agreements.

Congress closely monitored the Administration’s involvement in various trade negotiations that could further liberalize trade in agriculture and other economic sectors. These include the multilateral Doha Round under the auspices of the World Trade Organization (WTO); the hemispheric Free Trade Area of the Americas (FTAA); and bilateral agreements with Chile, Singapore, Morocco, and Central America, among others.

Following agreement on the terms of China’s accession to the WTO, Congress focused on ensuring that China adheres to its commitments to open markets to U.S. agricultural products. Despite such commitments, U.S. agricultural exporters continue to encounter major obstacles to Chinese markets.

Lawmakers introduced bills to ease the tight rules on permitted food sales to Cuba. Farm bill conferees rejected a Senate plan to permit private financing of such sales, but the issue surfaced in other legislation.

On May 13, 2002, the President signed into law an omnibus farm bill (P.L. 107-171) with a trade title amending and extending export and food aid programs through FY2007, and containing more stringent country of origin labeling requirements for food imports.

USDA’s FY2003 appropriation, not finalized by the end of the 107th Congress, will determine annual funding for USDA trade and food aid programs. Separate measures address concerns about the treatment of genetically engineered crops and food products in international trade.