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Ag Committee Hearing: Foreign Subsidies Jeopardizing Free Trade and Harming American Farmers

The House Committee on Agriculture conducted a hearing on October 21 exploring how foreign government meddling in various agricultural markets was hurting U.S. farmers while making a mockery of the notion of “free trade.”

In opening remarks, Committee Chairman K. Michael Conaway noted that when it comes to government subsidies, “in many cases what foreign countries are doing is patently illegal under their World Trade Organization commitments.”

“Our government,” Conaway declared, “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.”

Such “cheating” is especially pronounced in the global sugar market.

Jack Roney, director of economics and policy analysis with the American Sugar Alliance, testified to the “tremendous distortion” in world sugar prices due largely to government “price protection” for foreign sugar farmers.  He further charged specifically that India was in violation of World Trade Organization (WTO) rules.

In addition, the day before the hearing the U.S. International Trade Commission (ITC) “affirmed that Mexico’s sugar industry had harmed American producers by selling subsidized sugar onto the U.S. at below market prices – a practice known as ‘dumping’.” (Source: Agri-Pulse)

The unanimous ruling “means that an agreement signed by the U.S. and Mexican governments to establish a trading structure that caps Mexican imports and stop Mexico’s abuses will remain in effect for at least five years,” according to the American Sugar Alliance.

“U.S. sugar producers want NAFTA to operate as intended and to foster free and fair sugar trade between Mexico and the United States,” said Phillip Hayes, a spokesman for the U.S. sugar industry. The ITC ruling “helps accomplish that goal by upholding the governments’ agreement and addressing the unfair trade practices that were injuring American farmers, workers, and taxpayers.”

“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,” Chairman Conaway concluded in his opening remarks at the congressional hearing.  “But, until that day becomes a reality, we cannot and we will not unilaterally disarm America’s farmers and ranchers.”

What he said.