Fair trade pudding, Mars, your farm and the WTO

Some trading ‘partners’ fail to live up to their agreements.

By Betsy Ward President and CEO USA Rice Federation

By Betsy Ward
President and CEO
USA Rice Federation

Trade is all about two parties exchanging things the other wants. Competition is when two or more entities vie for a single prize. Fair trade is when all the parties involved agree on rules to govern their competition and then abide by those rules. Unfortunately, today’s global agriculture trade has about as much to do with fair trade as water on Mars has to do with your farm.

While supporting fair trade is one of the founding principles of the USA Rice Federation, and the sentiment guides our policy positions, it is time to do more than “urge” and “encourage.” It is time for the U.S. government to act decisively against what we see are clear trade-distorting practices that are in violation of international agreements.

‘Fair Trade Pudding’ Whipped Up

The proof is, as they say, “in the pudding.” So we whipped up some fair trade pudding to serve to the world.

In 2011, USA Rice commissioned a study of agricultural subsidy programs in India, Brazil, Turkey and Thailand. The study showed conclusively that these countries had actually been increasing agricultural subsidies for their domestic industries since 2004, while the United States was reducing or controlling support as agreed to in the World Trade Organization’s (WTO) Uruguay Round.

We use this study to demonstrate to leaders in Congress that illegal agriculture subsidies remain a significant non-tariff barrier to trade. We expect additional evidence to come from a study by the U.S. International Trade Commission (ITC) examining factors affecting the global competitiveness of the U.S. rice industry. The ITC study, ordered by Congress, will be presented in the next few months, and we are looking forward to the agency’s findings.

Last year we decided to update the 2011 analysis and add an examination of China to see if we were making progress towards fair trade or slipping dangerously backwards.

The results are not encouraging.

Our analysis shows that all five countries studied, all major consumers of rice, and in most cases major producers of rice too, are severely violating their commitments under the WTO.

In the case of some countries – like Thailand – the impact is having a chilling effect on the global rice trade. Subsidies lead to increased production, and, as in the case of Thailand, unsustainable production at that. We see the results of these unlawful policies as Thailand is now flooding the world market with low-quality rice grown with high government subsidies.

While we’ve all long suspected these trading, so-called, “partners” of failing to live up to their agreements, we now have even more definitive proof of this. So what now?

Sharing Analysis To Gain Support

We are taking the results of our analysis to our true trading partners who appreciate, desire and participate in actual fair trade. Countries like Canada, Australia and New Zealand. We are also sharing our analysis with international representatives to the WTO to gain support for possible future U.S. government action there.

However, the WTO is a slow-moving body, and country-to-country agreements would have a much quicker result for us. Of course, the bad actors have been benefiting from their rule bending and breaking for years; there’s little hope they will suddenly decide to come clean. However, we shine a light on their actions in the hopes that sunlight will prove to be the most powerful disinfectant and true fair trade will be the result.

To learn more about the USA RiceFederation, visit www.usarice.com.