Ag Policy Blog

Trading Partners Question US Trade Aid

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Farmers aren't the only ones wanting more details on how USDA will implement the next round of Market Facilitation Program payments and disaster aid.

Bloomberg reported early Monday, "The European Union joined China and five other World Trade Organizations members in criticizing the Trump administration's $16 billion assistance program for U.S. farmers, indicating the bailout may violate international rules."

Canada, the European Union, India and New Zealand were among those with serious questions over the new MFP payments.

On a WTO website, countries post questions to each other regarding issues related to WTO commitments on agriculture. The compilation of questions leads issues raised for the next round of meetings, which are set for June 25-26. A broad array of questions are raised and the U.S. officials trade officials raise quite a few questions of their own, including the U.S. questioning Chine selling rice below its minimum support prices.

The questions from trading partners in some cases are similar to continuing concerns from farmers. Regarding disaster aid, the European Union asked, "In early June 2019, Congress approved a $19 billion disaster bill. Can the US explain in more detail how it intends to implement that the legislation, once signed by the president, gives the USDA the discretion to increase the prevented planting payment factor on crop insurance to 90% instead of 55% for corn and 60% for soybeans?"

The questions posed also provide a certain level of sarcasm as well. New Zealand asked, "Does the US maintain that last year's farmer relief package remains a one-off payment?"

Canada asked how the MFP payments will be calculated on the county level. Canada notes USDA stated that planting is required, but the new MFP payments will not distort planting decisions.

Canada inquires: Could the United States elaborate as to how this announcement made in the middle of the U.S. planting season "will not distort planting decisions,"?

Canada also asked if the United States could clarify if there any plans to allow unplanted acres to qualify for payments. USDA stated last week that farmers must plant a crop, even a cover crop, to

China stated, according to its assessment, the MFP support for some products could exceed U.S. WTO commitments, including its $19.1 billion in "aggregate measure of support." China asked the U.S. for more clarification on how the payments will be assessed by the WTO.

The European Union wants more information on when the three tranches of payment will be made and what the criteria will be for farmers to receive the payments, and how the U.S. will classify the payments for WTO notification.

USDA statement on disaster and trade-related assistance: https://www.usda.gov/…

WTO compilation of questions: https://docs.wto.org/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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