U.S. dumping of five major export commodities continues to be widespread

February 27, 2004, Agribusiness Examiner: U.S. based multinational food companies are continuing a decade-long trend of agricultural dumping of five major export commodities onto world markets, according to a new analysis released [recently] by the Institute for Agriculture and Trade Policy (IATP).

Agricultural dumping is the exporting of commodities at prices below their cost of production.

"Dumping is one of the most damaging of all current distortions in world trade practices," said Kristin Dawkins, Vice President for Global Programs at IATP. "Developing country agriculture, vital for food security, rural livelihoods, poverty reduction and trade, is crippled by the competition from major commodities sold at well below cost of production prices in world markets. U.S. family farmers are also being driven out of business by this system of low prices."

The U.S. is one of the world's largest sources of dumped agricultural commodities. This updated analysis is based on the most recent numbers available --- 2002. These latest numbers are an update to IATP’s more comprehensive dumping report issued last year. This analysis provides dumping calculations from 1990 to 2002 for five commodities grown in the U.S. and sold on the world market: wheat, corn (maize), soybean, rice and cotton. The findings conclude that in 2002:

  • Wheat was exported at an average price of 43% below cost of production;
  • Soybeans were exported at an average price of 25% below cost of production;
  • Corn was exported at an average price of 13% below cost of production;
  • Cotton was exported at an average price of 61% below cost of production;
  • Rice was exported at an average price of 35% below cost of production.

Article Six of the General Agreement on Tariffs and Trade (GATT), which is one of the agreements overseen by the World Trade Organization (WTO), sets rules that prohibit dumping. However, the rules make it complicated in practice for smaller, poorer countries to establish grounds for anti-dumping duties because of the stringent requirements to demonstrate harm to the sector involved.

"Governments need to make it easier for poor countries to challenge agricultural dumping," said Alexandra Strickner, director of IATP's Trade Information Project in Geneva. "The easiest and most WTO-legal approach is for the importing country to have the ability to immediately impose countervailing and anti-dumping duties to bring the dumped prices up to cost of production levels."

IATP's full report, United States Dumping on World Agricultural Markets, and latest analysis can be found at: http://www.tradeobservatory.org

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