Feds want WTO to impose trade guidelines
U.S. officials suggested a proposal Thursday they would like to have the World Trade Organization impose to reduce trade barriers and subsidies while increasing markets for U.S.-grown food and goods.
The proposal, to be formally offered to the WTO next week in Geneva, is meant to eliminate export subsidies and other rules U.S. officials say complicate trade.
U.S. Trade Representative Robert Zoellick said the proposal, if enacted, would increase economic opportunities for U.S. farmers.
"U.S. farmers and ranchers support free trade because they rely heavily on market expansion for continued growth," Agriculture Secretary Ann Veneman said.
"However, we need to level the playing field by reducing and eliminating the unfair trade barriers that not only hurt our farmers, but other countries around the world," Veneman said. "The goal of the U.S. proposal is to bring more equity to the world agriculture trading system and strengthen the rules of trade."
Under the plan, all member countries of the World Trade Organization would reduce tariffs using a formula demanding greater reductions of high tariffs than low tariffs. It would result in no tariff over 25 percent.
Officials say that would result in the average agricultural tariff paid by the United States falling from 62 percent to 15 percent.
The proposal also calls for a number of specific reforms meant to improve market access opportunities for U.S. interests.
That emphasis on U.S. interests elicited praise from various agriculture groups even though it is uncertain whether the World Trade Organization will take it seriously.
American Farm Bureau Federation President Bob Stallman said he is pleased the United States is "aggressively" trying to deal with the issue since U.S. farmers earn about 25 percent of their total income from exports.
"Our administration has taken the lead in the agricultural negotiations and sent the message around the world that trade-distorting practices must be eliminated," Stallman said.
American Soybean Association officials also were pleased. President Dwain Ford said he thinks the measure "will allow the United States to play a leadership role" on the issue.
Livestock producers in Ohio will now be allowed to use a special feed additive for the pigs they raise for show.
Earlier this year, the Ohio Agriculture Department rescinded rules that prevented use of ractopamine in the feed of hogs raised for livestock shows.
The drug, sold commercially under the name Paylean, can help to make animals leaner and more muscular, while also improving feed efficiency. The Food and Drug Administration approved commercial sale of the drug for hogs in 1999.
Without the rules change, show hogs would have been disqualified in Ohio, even though the substance was permitted under federal standards.
Hog farmers from China were in the United States earlier this month to try to learn new techniques to increase productivity.
The farmers were spent July 6-20 mostly at Purdue University to learn about new swine information. Purdue officials will travel to China next month to provide additional information.
"China produces five times the amount of hogs that the United States produces, yet they are not as technologically advanced as we are," animal science professor Bud Harmon said. "If we teach them to be more efficient, they will in turn need more corn and soybeans to support the diets of their animals, therefore benefiting U.S. producers."
When DuPont purchased Pioneer Hi-Bred International in 1999 for $7.7 billion, it probably overpaid.
Analysts this week noted Pioneer's stock is worth $4.8 billion. DuPont officials took the $2.9 billion cut to reflect the company's current value although they say the Pioneer subsidy is still a significant part of the overall company.
"DuPont overpaid," Morningstar analyst Dan Quinn told the Des Moines Register. "That's been one of the digs against DuPoint over the years. "They've made a bunch of acquisitions that haven't justified the price they've paid for them."
The National Oceanic and Atmospheric Administration reported Thursday drought conditions are spreading across the Midwest, with western parts of the corn belt now classified as "severe."
"Exceptional" drought moved into parts of Nebraska, while moderate to severe drought existed in the rest of the state. A lack of rain and temperatures averaging 4-10 degrees above average were to blame.
The administration's Drought Monitor also noted abnormally dry weather conditions in Illinois, Indiana, Ohio and parts of Michigan and Wisconsin, depleting topsoil moisture and causing harm to corn and soybean crops.
Grain futures were down at the close Thursday on the Chicago Board of Trade.
Rainfall in parts of the Midwest helped ease some of the damage caused by recent hot, dry weather conditions, which resulted in losses across the board. Forecasts for more hot weather during the weekend and early next week left many traders confused about what to do, which also hurt prices.
Soybeans: Aug 5.67 3/4 off 16 1/4, Sep 5.42 3/4 off 17 1/4, Nov 5.24 3/4 off 19 1/4, Jan 5.25 3/4 off 17 3/4.
Corn: Sep 2.44 1/4 off 5, Dec 2.54 1/4 off 5, Mar 2.58 3/4 off 5 1/4, May 2.61 1/2 off 5.
Wheat: Sep 3.35 off 1, Dec 3.43 3/4 off 1 3/4, Mar 3.49 1/4 off 2 1/4, May 3.39 off 3 1/2.
Oats: Sep 1.75 3/4 off 1/4, Dec 1.74 off 3, Mar 1.75 1/2 off 2 1/2, May 1.75 1/4 off 3 1/4.