May 19, 2004... Saint Louis, Missouri... Representing the 25,000producer-members of the American Soybean Association (ASA), Board memberand past-President Bart Ruth, a soybean and corn farmer from Rising City,Neb., testified on the status of agricultural trade negotiations beforethe U.S. House of Representatives Committee on Agriculture. World demandfor soy-related exports, particularly high protein soybean meal andlivestock products, is growing rapidly. Expansion of developing economieshas spurred rising demand for and ability to afford a more nutritiousdiet.

"With 96 percent of the world’s population living outside our borders, andmost of its growth in countries with low per capita consumption of soyproducts, our foreign markets will only continue to expand," Ruth said."U.S. farmers need to compete for these expanding markets, and to do so,we need to bring down tariffs on soy-related products in importingcountries, and prevent their replacement with non-tariff barriers."

The purpose of today’s hearing was to review the broad agenda of issuesinvolving agricultural trade, and how these issues have changedconsiderably over the past decade, as have strategies for addressing them.Ruth presented an overview of the current situation, and then commented onsoybean priorities in the World Trade Organization (WTO), Free TradeAgreement (FTA) negotiations, and several other important trade issues.

Since the 1970’s, the U.S. has exported one-half of each year’s soybeancrop, either as whole soybeans, soybean meal and oil, or in the form oflivestock products. Soybean and soy product exports alone are currentlyvalued at $8 to $10 billion, making the U.S. soybean industry the largestpositive contributor to the national trade balance.

"We must require both developing as well as developed country competitorsto comply with the same disciplines on production and trade-distortingfarm support programs that we must meet," Ruth said. "And we musteliminate the distorting effects of our own domestic farm policies indiscouraging soybean plantings when market signals indicate otherwise."

Each of these goals will be addressed during negotiations the agriculturecommunity faces over the next three to four years. Current talks to reachagreement on a framework for agriculture as part of the Doha DevelopmentAgenda will reach a critical point at the mini-Ministerial in late June.Even if a framework is reached, actual commitments will need to benegotiated, and the time frame for completion will be uncertain.

ASA was an early and strong supporter of Doha WTO trade proposals torequire countries to improve market access by bringing higher tariffs downfaster than lower tariffs. ASA has supported making significant reductionsin trade-distorting domestic support, provided that countries withcomparatively higher levels of support, particularly the European Union,make proportionately greater reductions, and that developing countryexporters are subjected to similar disciplines.

"We are concerned that, if countries are able to protect all or most oftheir sensitive import commodities from meaningful tariff cuts, we won'tsee the expansion of markets for soybeans, soybean meal, and livestockproducts needed to justify accepting substantial reductions in domesticsupport and changes in our export credit program that will dramaticallydecrease its effectiveness," Ruth said. "A formula must be found that willensure a significant increase in market access for U.S. soy and livestockproducts, as well as other key U.S. agricultural commodities."

Of particular concern to ASA is the failure of the various negotiatingtexts to distinguish between least developed and advanced developingcountries by allowing self-designated developing countries to exemptthemselves from disciplines required of developed countries. Countriesthat are world-class producers and exporters of soybeans and othercommodities, like Brazil, should not be allowed to exempt themselves frommeaningful market access commitments or have the unlimited ability toimplement trade-distorting domestic support and export policies.

"ASA is also concerned by efforts to eliminate non-emergency foreign foodassistance provided under P.L. 480 Title 1 and other food aid programs,"Ruth said. "Assistance in the form of food is essential to help developingcountries alleviate poverty, combat diseases such HIV/AIDS, and developeconomically. We recommend that any disciplines on food aid be consideredseparately from reforms in export-related programs, and urge that food aidexperts be included in future negotiations."

ASA continues to be concerned by indications that the European Union (EU)intends to ignore its requirements under the 1992 Blair House Agreement ofthe Uruguay Round of multilateral trade negotiations. Under Blair House,the EU agreed to restrict subsidized oilseed area, and to limit productionof oilseeds for industrial purposes on so-called set-aside land. Afterseveral reforms, the EU now maintains that its oilseed supports are eithernot crop-specific or that support has been decoupled and, as a result, theBlair House acreage restrictions no longer apply.

"ASA and other U.S. oilseed organizations believe the EU must be remindedof its Blair House obligations, which have been bound in the EU's WTOcommitments," Ruth said. "The United States must be prepared toaggressively challenge the EU if it breaches its obligations."

Regarding FTAs, ASA supports passage of the Central America Free TradeAgreement, Dominican Republic, and Morocco FTAs. ASA welcomes the start ofthe Andean FTA, and is supportive of the Australia FTA, provided thelivestock phytosanitary issues are resolved. ASA is anxious to see theconclusion of the Southern African Customs Union FTA, in which ASA hopesto see soy protein used in a model for supplementary feeding of peoplereceiving anti-retroviral drugs to combat HIV/AIDS, as well assupplementing local diets to fight malnutrition and low productivity.

In regards to trade in biotech-enhanced crops, Ruth said, "U.S.agriculture must confront the growing challenge to our farm exports bynon-science-based claims by the European Union that restrict theavailability and competitiveness of food products derived from U.S.biotech commodities by imposing stigmatizing labeling and oneroustraceability requirements. Unless the U.S. and other biotech producing andexporting countries challenge the EU's Traceability and Labelingregulations, we will continue to lose foreign markets, not only in Europebut in other countries that choose to, or are pressured to, follow theEU's example."