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Agricultural News

House Ag Chairman Michael Conaway Finds Rising Foreign Subsidies Jeopardize Free Trade

Wed, 21 Oct 2015 11:22:38 CDT

House Ag Chairman Michael Conaway Finds Rising Foreign Subsidies Jeopardize Free Trade Opening Statement: Chairman K. Michael Conaway
Committee on Agriculture Hearing: Foreign Subsidies: Jeopardizing Free Trade and Harming American Farmers

Remarks as prepared for delivery:

The purpose of today's hearing is to examine high and rising foreign subsidies, tariffs, and other barriers to trade and their impacts on America's farmers and ranchers and the future of free trade.

As you will recall, on June 3rd, this Committee held a hearing where witnesses catalogued the actions major foreign competitors around the world are taking to support their agricultural industries. In that hearing, we explored the findings of several studies indicating that already high foreign subsidies, tariffs, and barriers to trade are on the rise.

We learned that in many cases what foreign countries are doing is patently illegal under their World Trade Organization commitments, while in other instances, foreign countries are extending support to their agricultural sectors in ways that fly below the radar of WTO discipline. And still in other cases, we learned of countries getting a free pass to ignore WTO rules by declaring themselves "developing" despite these countries having very mature, strong, and in some cases globally dominant agricultural sectors.

Today, we are going to hear from a panel of witnesses who will testify to the very tangible impacts of these foreign countries' activities on America's farmers and ranchers.

Based on the written testimony of our witnesses, this hearing will give those who doubt the need for U.S. farm policy a glimpse into what American farmers and ranchers are up against every single day. Their testimony is also a warning to our nation's trade negotiators that patience in a sector critical to passing future trade agreements is wearing very thin.

In 1993, trade promotion authority, or TPA, was approved in the Senate by a vote of 76 to 16, and in the House by a vote of 295 to 126. At that time, TPA won overwhelming majorities of Democrats and Republicans.

This Congress, TPA was approved in the Senate by a margin of 60 to 38 and in the House by a margin of just 218 to 208.

The Senate's relatively healthy vote in support of TPA this Congress betrays the significant shift that has taken place over the last 23 years. A substantial majority of Democrats in both chambers and an increasing number of Republicans opposed TPA this go around. And, of course, in the House, TPA barely managed to pass.

Now, the Trans Pacific Partnership has just concluded, but many question whether the newly minted agreement will have to wait until a lame duck session for Congressional consideration. Some speculate that Congressional consideration of TPP could just as easily slip into 2017.

In short, it does not take a trade expert to recognize that these are not good omens for the future of our nation's trade agenda.

Put simply: Americans are losing confidence in our trade deals.

Now, I want to be clear that my aim here is not to place blame. This is a problem that has been brewing for a long time. And I am sure that there is plenty of blame to go around.

But, I will offer one remedy: our government must begin to take on those who are cheating on their trade commitments. These actions by our foreign competitors are undermining our trade agenda and, as we will hear in testimony today, cheating by foreign countries is also causing serious injury to our nation's farmers and ranchers.

In the case of cotton farmers, who are substantially excluded from the Farm Bill's safety net, these producers are being whipsawed by communist China's erratic policies. China has driven global cotton prices to record highs, only to send them into a total free fall. Despite these circumstances, there was little to no help for American cotton producers made available under the Farm Bill.

There are a limited number of things that Members of Congress can do to draw attention to this serious situation.

First, we can highlight the cheating going on around the world and how it is harming the American people, jobs, and our economy, much like we are doing today. Although, perhaps in the future we will need to explore taking more formal, legislative action to ensure our point is made and our rights under various trade agreements are enforced. In this regard, I really want to commend U.S. sugar farmers for banding together in successfully stopping the illegal dumping that was occurring back in 2013.

Second, in the case of agriculture, we can maintain a strong U.S. farm policy and, when warranted, we can further strengthen that policy in order to give our farmers a fighting chance against the cheating that is going on.

For the good of free trade, for the good of our farmers and ranchers, and for the good of our nation's economy and jobs, business as usual is no longer good enough. Things must change. Our agreements must be enforced.

I hope that one day our trade agenda is able to zero out subsidies, tariffs, and other trade barriers around the world, including here at home. But, until that day becomes a reality, we cannot and we will not unilaterally disarm America's farmers and ranchers.

With that, I recognize Ranking Member Peterson for any comments he would like to make.



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