U.S. Participation in the Multilateral Trading System and Related Agricultural Trade Policy Issues

GAO discussed agricultural trade issues and related matters. The General Agreement on Tariffs and Trade (GATT) system provides guidelines and settles conflicts between GATT parties. Multilateral efforts, such as trade negotiations, have not only lowered tariffs, but attempted to better define and establish discipline for trade policy actions, such as government procurement, subsidies, and the imposition of product standards. The GATT subsidies code prohibits export subsidies on nonprimary products without qualification, but retains complex standards for determining the acceptability of export subsidies on such primary products as agricultural goods. Market accessibility for agricultural goods is more restricted than for other kinds of products because of unbound tariffs and nontariff measures. GAO believes that: (1) more effective limitations on export subsidies would curtail market participation by noncompetitive suppliers; (2) the decline in the dollar and in loan roles should lead to an increase in U.S. agricultural exports and create circumstances that encourage U.S. trading partners to negotiate; and (3) the United States maintains restrictive trade practices similar to those which it is trying to have other countries remove, U.S. policymakers cannot focus exclusively on its competitors' restrictive trade practices.