The Foreign Service Journal, May 2003

assessment,” Huete concedes, but often the concerns are a disguised form of protectionism. Perhaps the toughest issue to hit FAS in its 50-year history is that of genetically modified (or transgenic) organisms, also known as GMOs. (FAS prefers the less scary name “biotech” exports.) The term refers to a set of technologies that alter the genetic makeup of living organisms such as plants, animals or bacteria. Biotech food products have become common in the U.S., but are meeting stiff resistance elsewhere. FAS FSO Allan Mustard was present at the opening skirmish of this war. He was stationed at Embassy Vienna when Greenpeace Austria dumped a ton of genetically modified soybeans in front of the embassy with a big “Return to Sender” sign. That very day, April 8, 1997, the European Parliament overwhelmingly passed a strong resolution against GM corn, and the battle lines have been fixed ever since. Mustard recalls, “They [Greenpeace] put it on the glob- al agenda [partly because] the introduction of the technolo- gy was not handledwell; there was not sufficient marketing.” It is likely, he adds, that some anti-Americanism has gotten mixed in with the issue, as well. After all, in 2000 the U.S. grew 68 percent of the world’s GM crops. (Argentina and Canada grew almost all the rest. ) Beverly Simmons, assistant deputy administrator for trade policy, points out that “GMOs are generally avail- able in the U.S. The only labeling required by USDA is if it has an allergy component or nutritional differentiation.” She notes that the biotech issue affects “two of our biggest bulk exports, corn and soybeans. ... Wheat and rice could also be impacted.” Although GM corn and soybeans have been approved and accepted in some markets, notably Japan, overall, the outlook is not promising for GM exports. “They [the European Union] haven’t approved any biotech exports in four years. Europe is the litmus test,” Simmons says. Worse, “in other regions, such as Africa, there is height- F O C U S 30 F O R E I G N S E R V I C E J O U R N A L / M A Y 2 0 0 3 T he charge has often been made that the agricultural trade stance of the developed countries — especially the United States, the European Union and Japan — makes life very difficult for farmers in the developing coun- tries. There are three ways that happens, says Eugenio Diaz- Bonilla, a senior research fellow on global trade at the Washington-based International Food Policy Research Institute: trade barriers (like tariffs and quotas), export sub- sidies and domestic subsidies. Diaz-Bonilla said that studies by his institute show that those factors cause “displacement of production in the devel- oping countries of $26 billion a year.” That’s $26 billion worth of agricultural production that just doesn’t happen. “About half of that is due to the E.U., about 30 percent to the U.S., 10 percent to Japan, and the rest to other OECD countries,” Diaz-Bonilla tells the Journal. Direct export subsidies from the E.U. are $5 billion to $7 billion annually, and dwarf those of the United States, according to Diaz-Bonilla. U.S. subsidies are about $100 million per year, going just to poultry and dairy products. Diaz-Bonilla says that no one objects to typical FAS activities like trade fairs and promotions. "All countries do that — though of course the U.S. has the largest network of agricultural officers, the most money and resources.” The World Trade Organization’s current negotiations— the Doha Round — are attempting to deal with agricultural trade barriers. “The U.S. proposal there is very good,” comments Diaz-Bonilla, “moving toward a more level playing field.” Jim Grueff, an FSO who works on agricultural trade pol- icy at FAS, tells the Journal , “That’s something we talk about all the time — the issue of domestic and export sub- sidies in developed countries, the effects of high tariff bar- riers, and how damaging that is, including to producers in developing countries.” “Rather than arguing, to no effect, whether certain U.S. subsidies are damaging or not,” Grueff urges critics to con- centrate on current negotiations. “If somebody cornered us in Geneva and said, ‘But what about your cotton subsidies, what you’ve done to poor farmers?’ I would respond by saying, ‘Let’s focus on what’s achievable.’ It would be different if we hadn’t made very pro-active, very substantial proposals that involve cutting our own subsidies, but we have.” In any case, the big problem regarding the United States and agricultural trade is not the U.S. position at the WTO, but the latest U.S. farm bill, which continues to provide expensive domestic subsidies to American farmers. However, agricultural economist David Orden has writ- ten that the U.S. “position as a rhetorical champion of agri- cultural trade liberalization within the WTO” is not just pos- turing. “While not reforming its farm policies unilaterally, the United States has expressed its willingness, if its pro- posal is taken at face value, to engage in simultaneous mul- tilateral liberalization of a significant magnitude.” — Bob Guldin Do Poor Farmers Get Hurt By U.S. Exports?