By Ambassador Allen F. Johnson

Chief Agriculture Negotiator

Office of the U.S. Trade Representative

Mississippi has a rich history that includes being the birthplace of Elvis and the Cotton Capital of the world.  Even though Elvis has left the state, cotton and agriculture are still a vital part of Mississippi’s culture, history, and economy.

Agriculture is Mississippi’s number one industry, employing approximately 30 percent of the state’s workforce either directly or indirectly.  As a leading producer of cotton, rice, and broilers, Mississippi agriculture sustains a $3.8 billion industry in the state. It is because of this success that Mississippi’s farmers and ranchers find themselves part of a national debate that will set the future course for the United States’ agricultural community. 

There are two possible visions for the future: one looks inward and is stagnant; the other is outward and dynamic.  The inward vision focuses only on supplying our domestic market.  To limit our ambitions to the domestic market is to endanger the growth prospects for this and future generations of U.S. farmers.

To sustain our productivity, we must recognize that a growing global economy creates new opportunities to access new customers and rapidly growing markets overseas.  Ninety-six percent of the world’s consumers live outside of the United States. 

As the world’s population and world food consumption continues to expand so will the demand for the high-value products where the United States has a comparative advantage.  Nationwide, exports of agricultural products grew more than three times as fast as the total of all U.S. exports in the last year. The U.S. Department of Agriculture has forecast record agricultural exports of $62 billion for this fiscal year. The United States ranks first in the world for exports of poultry, corn, soybeans, and cotton and third for exports of rice.

Exports are crucial to Mississippi’s cotton, rice, soybeans, and poultry producers.  Exports accounted for $778 million for Mississippi farmers and ranchers in fiscal year 2003.  Mississippi is third in U.S. cotton and cottonseed exports and fourth in U.S. rice exports. 

Realizing the need to further expand markets around the world, we have concluded free trade agreements with 12 countries in the last 3-1/2 years: Jordan, Bahrain, Chile, Singapore, Morocco, Australia, Guatemala, Costa Rica, El Salvador, Honduras, Nicaragua and the Dominican Republic.  The combined population of these countries represents a market of nearly 120 million people, which is roughly the size of the smallest 38 U.S. states. 

We are working on agreements with 10 more countries:  Panama, Colombia, Peru, Ecuador, Thailand, and the five-nations of the Southern African Customs Union (SACU). Last year, the U.S. exported $17.5 billion to these countries, which, taken together would ranks as our 9th largest export market.

These new free trade agreements, when enacted, will expand opportunities for Mississippi producers.  The CAFTA countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) for instance, have agreed to immediate duty-free access for soybeans and cotton, and preferential tariff-rate quotas (TRQs) for rice and poultry will result in new and growing access for those commodities as out-of-quota tariffs are phased out.  The Morocco agreement provides for immediate duty-free access for cotton and soybeans and new and growing access for U.S. poultry, including immediate duty-free access for some processed poultry products.  We also achieved new opportunities with the CAFTA countries for corn, the region where corn was first propagated, where over a million tons of U.S. exports will be allowed immediately duty-free immediately and all corn tariffs removed over 15 years.

We are also advancing U.S. interests in the World Trade Organization (WTO) by working to level the playing field for Americas’ farmers, ranchers and growers, who often face high barriers to our world class products.  Only in the WTO can all trading partners be brought to the table to secure a comprehensive deal that benefits U.S. agricultural interests by reducing all types of trade-distorting policies. 

The WTO framework agreement reached in late July in Geneva will benefit American agriculture:  eliminating export subsidies – including the over $7 billion a year the EU is allowed to spend on export subsidies on a wide range of products, including grains and poultry; reducing and further harmonizing trade distorting domestic support – in particular the over $80 billion a year the EU can spend on trade-distorting domestic support; and substantially increasing market access will benefit all of American agriculture.  Only by addressing these three pillars of agricultural trade together, farmers and ranchers in the United States and around the world can win.   We were successful in convincing the West African cotton producing countries of this approach and addressing cotton as part of global agriculture negotiations with all trade distorting policies on the table as part of a single undertaking rather than the focus solely being on U.S. subsidies.

We strongly believe that the best way to address any distortions in world agricultural markets is through the WTO agriculture negotiations, not through litigation.  This is the message we have delivered concerning Brazil’s challenge of our agricultural support measures, including support for cotton farmers.  While we welcomed certain findings by the recent panel ruling, such as the fact that our decoupled income support payments have not caused “serious prejudice” under WTO rules, we strongly disagree with some aspects of the panel report and will defend our farmers by appealing on these issues.  We believe the facts do not show that U.S. farm programs have distorted trade and caused low cotton prices. 

A level playing field for Mississippi farmers also means that they will continue to have recourse to strong remedies to address injurious dumped and subsidized imports.  Under the mandate for WTO rules negotiations that the United States insisted upon and obtained at the Doha Ministerial, the strength and effectiveness of our trade remedies will be preserved.

Enforcing existing trade agreements is just as important as negotiating new agreements.  For example, we have been actively engaged in working with the Chinese to ensure that their tariff rate quotas provide market access for U.S. cotton.  China is a critical market for U.S. cotton exports, as it purchases over 20 percent of U.S. cotton production, and cotton in 2003 was our second largest agricultural export to China.  I am also working to protect our WTO rights to compensation for Mississippi and other U.S. rice producers who have been damaged by recent changes to the EU’s rice import regime.

Many of our day-to-day activities involve foreign sanitary and phytosanitary barriers – animal and plant health issues.  Together with the U.S. Department of Agriculture’s scientists and technical staffs, we are constantly working with industry to ensure that measures imposed by foreign countries, have a scientific basis and are not unnecessarily trade restrictive.   As needed and appropriate, we initiate dispute settlement cases.  In fact, the United States recently won a dispute with the Canadians over their illegal subsidy to its dairy industry and initiated a case against the EU and its’ restrictions on biotech products.

To build on Mississippi’s proud agricultural traditions and heritage and to ensure new opportunities for the current and future generations of farm families, we must continue to embrace the outward vision as the road to the future.  By developing export markets and continuing our long-standing agricultural heritage, farmers and ranchers can look outward beyond America’s shores to the rest of the world.