WTO Begins Another Push To Get DOHA Deal

Friday, June 30, 2006                         By Shawn Wade

      WTO Director General PascalLamy is using every bit of leverage he can find to try to get the stalled DohaDevelopment Agenda round off dead center.

      Lamy wants the principlecountries involved in the negotiations process to find a way to agree, by theend of the weekend, on the ranges and formulas for reducing tariffs and subsidycuts.

      Making that deadline however,appears to be an uphill battle. Going in there are already several groups ofcountries that are digging in their heels and saying they have offered all theycan or saying that the proposed tariff cuts are unacceptable. Thankfully, itseems that the US, which has offered the most ambitious proposal thus far, is amongthose countries intent on standing firm.

      Going into the opening roundof meetings June 28 the US negotiating team, led by new US Trade RepresentativeSusan Schwab, appears prepared to hold the line and not give in to the callsfrom the EU and developing countries that the US should accept even deeper cutsto its domestic support programs in exchange for significantly less in marketaccess concessions.

      "We can't be stampededinto an agreement just for a deadline," Schwab said. "We're going totry to get this done as soon as we can, rather than say if we don't get it doneby the weekend it won't happen."

      A big reason for the pressurethat is being applied is the mid-2007 expiration of President George Bush's "Fast-Track"trade negotiating authority. If a final Doha package is not completed andsubmitted to Congress before "Fast-Track" authority expires it would be open tomodification by Congress.

      U.S. Congressional leadersand farm groups have been vocal in their opposition to any suggestion that wouldlead to deeper cuts in U.S. support programs or that provides less in realmarket access gains than what the U.S. has already proposed.

      Congressional leaders in boththe Senate and the House of Representatives crystallized this position inletters to President Bush reiterating their strong opposition to any proposalthat would impose deeper cuts and reap fewer rewards from the current round ofnegotiations.

      The Senate letter wasdelivered June 23 with the signatures of 57 Senators. The House version of thesame letter garnered 62 signatures in a very short time period and wasdelivered to the President June 28.

      Texas Senators John Cornynand Kay Bailey Hutchison signed the Senate letter while High PlainsRepresentatives Randy Neugebauer and Mike Conaway signed the House version thatwas sent to the President.

      House Ag Committee ChairmanBob Goodlatte also delivered the same strong message to WTO Director GeneralLamy during his trip to Washington earlier this month. Goodlatte said, ineffect, that the current US offer was as much as Congress was willing toconsider in light of the fact that the US was the only country to suggest asubstantive proposal for achieving real liberalization in agricultural tradepolicies between developed and developing countries.

      How the weekend's meetingswill turn out is anybody's guess, but the general feeling seems to be thatlittle common ground will get plowed and another key date for progress to beachieved will be missed.

      The growing consensus withinCongress and among agricultural groups is that "no deal is better than a baddeal."

      Based on Ambassador Schwab'scomments, that message seems to have gotten through. Now it is up to her tostand fast and resist the pressure that is sure to be exerted on the US to givemore and accept less in return.

 

Average Price Received Through May 2006

Friday, June 30, 2006                         By Shawn Wade

      The Weighted Average Pricereceived by farmers for 2005-crop Upland cotton logged its first month-to-monthdrop this marketing season. Calculated through May 2006, the 2005 WeightedAverage Price Received by farmers for Upland cotton fell a modest 5 points to47.77 cents from the previous month's calculation of 47.82 cents.

      While the change was small,the trend it reversed is the bigger news. For the past few months it has beenvirtually impossible to see how the course of the 2005 Upland cottonCounter-cyclical payment rate calculation could be altered. The May figuresfurther reinforce that reality and all but guarantees the 2005 Counter-cyclicalpayment rate will be the maximum 13.73 cents allowed under the provisions ofthe 2002 Farm Bill.

      The 2005Counter-cyclical payment rate authorized under the 2002 Farm Bill will be basedon the 12-month Weighted Average Price Received by growers. For cotton the12-month Weighted Average Price will reflect price and marketings for the 2005marketing year. The 2005 cotton marketing year began on August 1, 2005 and endsJuly 31, 2006.

      Thefollowing table shows the average price received each month by farmers and thecalculated weighted average price based on estimated cumulative marketings andprices reported by the National Ag Statistics Service through May 2006.

Monthly Average Price Receivedfor

2005-crop Upland Cotton ThroughMay 2006

(Weighted by Marketings)

 

Marketings

Prices

 

 

(000's of Running bales)

(cents/Lb.)

 

 

Monthly

Cum.

Monthly

Weighted

 

August

1,233

1,233

42.10

42.10

September

518

1,751

44.30

42.75

October

911

2,662

48.50

44.72

November

1,831

4,493

48.50

46.26

December

3,264

7,757

47.90

46.95

January

2,420

10,177

48.60

47.34

February

1,182

11,359

49.00

47.51

March

1,169

12,528

50.40

47.78

April

516

13,044

48.60

47.82

May

658

13,702

46.80

47.77

June

na

na

46.90*

na

Source: National Agricultural StatisticsService; * = preliminary

 

 

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