The Impact of the World Trade Organization on Food Aid Policies USDA and USAID EXPORT FOOD AID CONFERENCE Kansas, City, Missouri April 25, 2006 Floyd Gaibler, Deputy Under Secretary, Farm and Foreign Agricultural Services, U.S. Department of Agriculture

2 Introduction Background – U.S. Food Aid Why the “ Development ” Round? Status of Negotiations

3 U.S. Food Aid U.S. is world’s leading food aid provider Supplies more than 1/2 of total international food assistance In FY2005 supplied 4.2 million mt to needy people in 73 countries Emergency and developmental food aid

4 Free Trade Essential Solution to world poverty and hunger: Economic growth and development Essentials of economic growth and development: Free trade and increased market access Global trade liberalization: Increase developing countries’ income by billions Reduce global poverty by 25% in 15 years

5 WTO Negotiations Key Successful WTO agricultural negotiations mean broad-based, freer, fairer trade U.S. position: Eliminate export subsidies Cut domestic support Reduce market barriers

6 Agriculture: Three Pillars Direct Export Subsidies EU (over $2 billion a year) Other United States Switzerland Norway Market Access Average WTO Allowed Ag Tariff Domestic Support – amber box: Bil $ at current x rates Allowed Used Allowed Used

7 Talks at Critical Point Now Members reconfirmed commitment to ensure commercial displacement does not occur Members agreed to establish a “safe box” for emergency food aid Established duty free/quota free framework for LDCs Reaffirmed global commitment to provide trade capacity building assistance

8 WTO Impact on Food Aid Point of contention in Doha negotiations In current negotiations, aim is to assure food aid has no displacement of commercial trade U.S. follows this requirement, but some in WTO continue to challenge U.S. programs One common goal: Maintain or increase current level of global food aid based on need

9 WTO and Food Aid What has happened since Hong Kong? Developing specific disciplines: “Safe Box”: Emergency-driven No commercial displacement “Non-Emergency”: Needs-driven Donations subject to objective analysis of recipient country’s food needs and commercial ability to import

10 Criticisms of U.S. Food Aid Policy Some WTO members view certain types of food aid as export subsidies: Means of surplus disposal Distortion of commercial trade EU and others argue cash-only approach to food aid

11 Food Aid Negotiations U.S. Position Remains Firm: Promoting solid disciplines to prevent commercial displacement Allowing assistance to flow to those in need Permitting members flexibility in programming, an assortment of “tools in the toolbox” Maintaining, not reducing, global aid

12 Food Aid Negotiations EU Proposal EU’s “cash-only” proposal would greatly reduce the availability of food to people who need it African/LDC Proposal Meshes with the U.S. position and allows for a variety of tools

13 Food Aid Negotiations Chair’s reference paper on food aid Proposed criteria for “safe box” – bona fide food aid Non-Emergency Situation Monetization

14 Doha Round and TPA Timing April 30 deadline looms Modalities must be in place before schedules can be developed WTO needs 6 months to negotiate and verify new member schedules – July- December 2006 Submission to Congress - TPA expires June 30, 2007

15 Conclusion U.S. Objectives/Ambitions Remain the Same Improve export competition through elimination of export subsidies Improved market access through substantial tariff reductions Substantial reduction in trade-distorting domestic support Ambitious trade package essential to economic growth and development

The Impact of the World Trade Organization on Food Aid Policies USDA and USAID EXPORT FOOD AID CONFERENCE Kansas, City, Missouri April 25, 2006 Floyd Gaibler, Deputy Under Secretary, Farm and Foreign Agricultural Services, U.S. Department of Agriculture