GROWERS WATCH TRADE TALKS

Publication: Lakeland Ledger
Printed: Thursday, August 5, 2004
Written by: Kevin Bouffard


LAKELAND -- While low farm prices troubled Florida citrus growers in the 2003-04 season, they also faced a more long-term threat that reemerged during the weekend.

Once thought dead, or at least mortally wounded, by a stalemate in Cancun, Mexico, in September, negotiations to establish new global agricultural trade rules under the World Trade Organization (WTO) are back on track.

That means the U.S. tariff on orange juice imports from Brazil is subject to reduction or elimination, a move that would put most Florida orange growers out of business, citrus industry officials said.

Trade ministers for the 147 WTO members broke the impasse early Sunday after several days of negotiations in Geneva, Switzerland.

The framework for new trade rules came after the European Union agreed to eliminate up to $5 billion in annual agriculture export subsidies and U.S. negotiators pledged substantial cuts in domestic farm subsidies. The framework commits all WTO members to make substantial tariff reductions across the board on agricultural commodities.

The last provision could affect the Brazilian tariff, said Andy LaVigne, the chief executive officer at Lakeland-based Florida Citrus Mutual, the state's largest growers' representative. What effect, if any, is still unclear.

"A lot (in the framework) is vague and left for future negotiations," LaVigne said. "This is a movement forward, but there remains a lot to negotiate. It still can blow up."

Oranges represent the state's largest agricultural commodity, and Florida juice manufacturers supply some 90 percent of the 1 billion-gallon North American orange juice market.

The federal tariff adds nearly 30 cents to a gallon of orange juice imports from Brazil, the world's largest orange grower and juice processor. Without help from the tariff, Florida growers could not compete with low-cost Brazilian juice, LaVigne and other industry officials have said.

Florida citrus is putting its hopes on a provision in the WTO framework that allows each country to designate certain agriculture commodities as "trade sensitive," LaVigne said. That allows each country to negotiate separate deals for those commodities apart from the general tariff reductions.

"The language still gives the U.S. government the ability to look at sensitive commodities and hold out for no reduction on those tariffs," he said. "Some of these commodities will not be subject to tariff reduction. I think that's what everybody's understanding is."

The state's citrus officials fear the Brazilian tariff will be sacrificed to reach a agreement on the latest round of trade liberalization talks that began in Doha, Qatar, in 2001. The "Doha" round will also deal with new trade rules affecting services, such as banking, telecommunications and transport.

Many U.S. businesses, including some agriculture sectors such as beef and corn, are pushing for a new agreement in hopes of opening new markets in Asia and South America.

"This is a very positive step," said Dee Vaughn, president of the National Corn Growers Association, in a Tuesday press statement. "One of every five rows of corn is exported, and in the future the vast majority of consumers in the world will live outside the developed world. Trade will be critical to the future growth and profitability of corn growers."

Some U.S. agriculture sectors, fearing a loss of farm subsidies, oppose new trade rules.

"National Farmers Union is disappointed that the WTO framework will perpetuate a never-ending race to the bottom in producer commodity prices, pitting farmer against farmer and country against country for the one commodity all humans must have -- food," said Dave Frederickson, president of the farmers' group, in a press statement released Monday.

Talks in Geneva are scheduled to resume next month to hammer out more details, but negotiators acknowledged they won't complete the new rules by the end of the year, the original deadline. Trade ministers did agree to meet again in Hong Kong in December 2005, when some hope to complete the deal.