The end of 2004 marked 11 years of experience in economic integration under the North American Free Trade Agreement (NAFTA). In February the Economic Research Service (ERS) of USDA released a Congressionally-mandated biennial report titled “NAFTA at 11: The Growing Integration of North American Agriculture.” The analysis provides insights on how trade agreements can facilitate the movement of products and capital to meet the changing needs of consumers and create new opportunities for producers, while still providing transition protection for politically sensitive products.
At a WTO Trade Negotiations Committee meeting in Geneva, Switzerland the week of February 14, Deputy U.S. Trade Representative Peter Allgeier suggested an aggressive agenda for negotiations over the next two years. The process is already several years behind the schedule envisioned as part of the Uruguay Round Agreement that was completed in 1994. There is no logical economic reason to delay the process any longer.
While developed countries are under pressure to sharply reduce domestic subsidies for agriculture in a new World Trade Organization (WTO) trade agreement, China is reducing taxes on production agriculture and increasing subsidies to farmers. The Chinese Communist Party recently released “2005 No. 1 Document” outlining measures to support rural incomes, the second year in a row that the number one document has addressed this issue. Rural peasants have traditionally provided the backbone of support for national governments and discontent in rural areas has not gone unheeded.
In late January the Economics Minister from Switzerland, Joseph Deiss, told reporters that ministers from 25 countries met at the World Economic Forum in Davos and agreed to step up the pace of the Doha Round trade talks so an agreement could be reached in 2006. The World Trade Organization (WTO) has already set a full ministerial meeting of all member countries for December 2005 in Hong Kong. Freer trade in agriculture was one of the five areas mentioned by Mr. Deiss as being critical to the success of the negotiations.
Biotech crop acreage in developing countries like China, India and South Africa continued to increase in 2004 according to the ISAAA (International Service for the Acquisition of Agri-biotech Applications). Chinese acreage, mostly cotton, increased 31.9 percent from 6.9 million acres to 9.1 million acres. India’s acreage increased from 250,000 acres in 2003 to 1.24 million in 2004, a 400 percent increase. South Africa’s biotech acreage increased 25 percent in 2004 to 1.2 million acres. The slow progress of the regulatory process in developing countries has allowed agronomic and economic researchers to accumulate data from farm trials and estimate what may happen to productivity as biotech crops become more widely used.