May 09, 2002 (AFP) - The US passage of a 173.5 billion-dollar farm subsidybill threatens to injure developing countries, aghast activists, officialsand trade analysts said."It is a very sad day for the poor farmers of developing countries,"said asenior World Bank official, speaking on condition of anonymity a day afterthe US Senate passed the measure.The legislation now goes to President George W. Bush, who has said heintends to sign the 10-year, 173.5 billion-dollar bill into law in theteeth of foreign opposition.Activists pointed out that the United States had been a fierce proponentof free agricultural trade in last November's World Trade Organizationmeeting in Doha, Qatar.That meeting resulted in the so-called Doha Development Round,negotiations promising to phase out global farm subsidies that average sixtimes the estimated 50 billion dollars the rich countries provide annuallyin foreign aid to the developing world."This is one gain that would not only help American farmers and ranchersbut would help lift millions out of poverty in the developing world,"USTrade Representative Robert Zoellick had said at the time, when trying topressure the Europeans into an agreement.Zoellick insisted this week that the United States remained committed tofree farm trade, emphasizing that the European Union and Japan both hadhigher levels of subsidies than the United States.The new US farm bill also contained a circuit breaker that would reducefarm support if it reached WTO limits, he said.But the Europeans were hardly convinced."At a time when all developed countries have accepted the direction offarm support away from trade- and production-distorting measures, the USis doing an about turn,"said European Agriculture Commissioner FranzFischler."We cannot negotiate on the basis of 'Do as I say, not as I do.'"Oxfam America, a strong supporter of greater access to rich countries'markets, said the new bill would have a severe impact on developingcountries."We are absolutely appalled,"said Oxfam America policy department directorJo Marie Griesgraber."For poor farmers in developing countries, it means that imported goodsare much cheaper than what they can produce, so the small farmers are putout of business,"she said."Then you have the flood of immigrants into the cities. Then you have massunemployment and you have unrest. It is increasing poverty. It isincreasing urbanization."Jeffrey Schott, trade economist at the Institute for InternationalEconomics, said the subsidies' passage would complicate the task of USnegotiators in the Doha Development Round."We will need to have significant reforms in the Doha Round if it is goingto succeed, and many of those reforms will benefit developing countries'exporters,"he said."If we cannot move forward in that area, it is going to make it much moredifficult to achieve the objectives that the US and EU have in otherareas, including in manufacturing trade."Bill Reinsch, president of the National Foreign Trade Council,agreed."Logically, it would have an adverse impact on most of the rest ofthe world,"he said.It also removed the moral leverage that the United States had enjoyed inthe trade negotiations as it sought to press the Europeans to drop theirattachment to farm subsidies.

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