20, 1986, is shaping up to be a critical, timely opportunity for us to
resolve international trade problems. It is an opportunity we may not
have again in the foreseeable future.
U.S. Trade Representative Clayton Yeutter recently observed:
One of the major shortcomings of the GATT during its 40-year
existence is that it has never effectively confronted agricultural
trade policy problems. It has done a reasonably good job in the
industrial area over the past four decades, but very little has
happened to provide any discipline over the way agricultural
trade is conducted (Yeutter and Lyng).
The United States approach has been to place every type of trade
restriction on the table. The fundamental fact for most basic com-
modities is that domestic systems of support and protection inhibit
growth in demand, stimulate excess production, and, in so doing, pro-
voke more frequent use of import restrictions and export subsidies.
This administration is convinced the time has come for an interna-
tional approach to removing the domestic systems that restrict
growth in world agricultural trade. That simple idea has taken a
long time to gain acceptance. Better late than never. The statement
issued in Paris at the conclusion of the ministerial meeting of the
Organization of Economic Cooperation and Development (OECD)
was the consensus for which we have long hoped (Organization of
Economic Cooperation and Development). The section on agriculture,
agreed to by all the industrialized countries, recognizes that long-
term reform of domestic programs is essential and declares that the
Uruguay Round should establish the framework in which this reform
can take place.
In keeping with that sentiment, on July 6, 1987, in Geneva, the
United States submitted its formal proposal for the reform of agricul-
tural trade under the GATT.
The proposal is easy to describe but sweeping in concept. We are
seeking the elimination of all direct and indirect subsidies and all
import barriers that affect agricultural trade. We have proposed that
these subsidies and restrictions be phased out over the next ten
years.
We are not proposing a simple swapping of tariff cuts or other con-
cessions, product by product. We are linking subsidies and access
barriers together in order to phase out whole systems of excess sup-
port and protection. Only by eliminating the source of the problem
can we end the creation of price-depressing surpluses and put compe-
tition back on an even playing field.
Our proposal does include a safety net for those farmers who need
help making the shift to a market-oriented world agriculture.
Farmers unable to compete could receive help in the form of direct
income supports. Such direct help would prevent them from being
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