March 7, 2007

 

Mexico will join complaint if WTO probes US corn subsidies

 

 

Mexican officials Tuesday (Mar 6) told US Agriculture Secretary Mike Johanns their country will join Canada's trade complaint against US corn subsidies if the World Trade Organization orders a formal investigation of the issue.

 

Mexican Economy Secretary Eduardo Sojo said his country would join the complaint--now supported by the EU, Australia, Argentina and Brazil--if the WTO orders the establishment of a dispute settlement panel. That could happen if the dispute isn't worked out during a consultation period.

 

"If a panel is set up as a result of Canada's initiative, Mexico would join as an affected third party," Sojo said at a ceremony in which officials signed a consultative agreement to resolve agriculture-related trade issues more quickly.

 

The debate over US subsidies--which many nations say represent unfair competition for their own farmers--comes as global free-trade talks remain stalled over the topic, and Mexico braces for the lifting of its last protective tariffs on imported corn in 2008 under the North American Free Trade Agreement.

 

Johanns was quick to assure his Mexican counterpart, Alberto Cardenas, that US subsidies will decline, because of both high US corn prices--which don't qualify for subsidy payments--and potential changes in payment structures in the 2007 US farm bill.

 

The administration of US President George W. Bush has proposed reducing agriculture spending by US$18 billion over the next five years.

 

"I can pretty definitely assure you that less money will be paid out in subsidies for corn than what has historically been made," Johanns said, adding he hopes the US will approve a broader guest-worker programme for Mexican migrants--an issue dear to Mexico--"soon".

 

Speaking of talks with Johanns, Sojo said "we talked about the importance of moving forward and successfully concluding the Doha round of WTO free trade talks".

 

But while Mexico has embraced free trade--officials said they will approve the importation of 3 million to 3.5 million tonnes of US corn in 2007 to help reduce the cost of animal feed here--they also said they wanted US help to achieve a "soft landing" when Mexico opens its corn market.

 

That was apparently a reference to US training, cooperation or investment for poor, marginal corn-growing areas in Mexico expected to be hit by the opening.

 

The two countries' agricultural trade now tops US$20 billion per year, with Mexico now a major supplier of fruits and vegetables to the US, and also a large market for US grain and meat.