Agricultural Trade Negotiations

In response to a congressional request, GAO provided information on the multilateral trade negotiations regarding the liberalization of agricultural trade, focusing on the: (1) structure of the negotiation process; (2) reactions to the U.S. proposal and those of other major participants; and (3) progress made to date.

GAO found that the Department of Agriculture and the Office of the U.S. Trade Representative jointly proposed: (1) eliminating all agricultural subsidies over a 10-year period; (2) permitting payments to farmers that would not affect pricing or production and bona fide foreign and domestic food aid; (3) coordinating worldwide health and sanitary regulations to prevent their use as non-tariff barriers; and (4) using the producer-subsidy-equivalent concept to measure the aggregate support that countries provide to their agricultural producers. GAO also found that other participants in the negotiations proposed: (1) a gradual reduction in agricultural support; (2) short-term emergency measures to reduce dairy and sugar surpluses; (3) a reduction in market access restrictions and improved rules on market access; and (4) a reduction in export subsidies. GAO noted that, while some commodity and farm groups believed that the U.S. proposal was a good negotiating strategy, others believed that it was unrealistic for European countries to dismantle their domestic support programs and eliminate all trade-distorting policies.