Business Groups Warn Farm Bill Could Violate Trade Rules

In an effort to get lawmakers to change the farm bill - major U.S. business groups have said this week that the new farm bill might violate World Trade Organization rules against trade-distorting subsidies. The U.S. Chamber of Commerce, National Association of Manufacturers and National Foreign Trade Council said in a letter that the bills pending in the House and Senate carried some of the same provisions the WTO ruled against in the cotton case and that the bills run a substantial risk of violating WTO rules on farm subsidies. They said the House provision tying crop payments to plantings could quickly invite other nations to initiate dispute settlements against with U.S. with good chances of success. According to analysis by the international law firm White and Case - potential complainants include Brazil, China and Argentina. It called the House provision the most likely trigger for a WTO case. The analysis said the somewhat similar Senate provision that would link price supports to historical plantings would be less likely to draw a challenge - but that its high support prices could trigger payments that exceed WTO parameters.

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