Farm Bill Would Impact Apparel, Textiles

Congressional lawmakers unveiled a $300 billion farm bill compromise on Thursday that has trade implications for the apparel and textile industry.

WASHINGTON — Congressional lawmakers unveiled a $300 billion farm bill compromise on Thursday that has trade implications for the apparel and textile industry.

This story first appeared in the May 9, 2008 issue of WWD.  Subscribe Today.

The measure includes provisions that run counter to the Bush administration’s goal of completing the Doha Round of global trade talks this year.

The bill, which funds farm, food stamp, nutrition and conservation programs for five years, also conflicts with the objectives of the World Trade Organization negotiations because it would continue subsidies for U.S. farmers. The subsidies have been a major roadblock for more than six years in the discussions aimed at reducing or eliminating tariffs and subsidies.

President Bush criticized the bill last week, saying it would “fail to eliminate subsidy payments to multimillionaire farmers.” Agriculture Secretary Ed Shafer reiterated Thursday that Bush would veto the bill.

The legislation is expected to go to the House and Senate for a vote next week, setting the stage for a confrontation with the White House. However, some lawmakers are confident they will have enough votes to override a Bush veto. The bill is politically popular among both Republicans and Democrats because it maintains billions of dollars in subsidized farm programs, but also includes food stamp and nutrition funding, as well as some trade-related provisions.

The Bush administration and Congress appear to be working at cross purposes on agriculture subsidies. The U.S. has been under pressure from the European Union and developing countries to slash domestic agriculture subsidies, particularly for cotton, in the global trade talks. Although the U.S. has signaled it is prepared to reduce certain subsidies, negotiators have been unable to break the stalemate between rich and poor countries over the subsidies.

The legislation puts further stress on the global negotiations.

House and Senate agriculture negotiators, addressing the controversy during a news conference, stressed the multipurpose aspect of the bill. Rep. Collin Peterson (D., Minn.), chairman of the House Agriculture committee, said only $36 billion to $40 billion of the $300 billion would go to farmers.

“The rest, the majority, goes to nutrition and a good chunk goes to conservation,” he said.

Sen. Saxby Chambliss (R., Ga.) said, “We moved as far as we could [toward] the administration on their requests.”

Included in the bill is a two-year extension of a trade preference program for Caribbean countries and an increase in benefits for Haiti, which has been struggling with a severe food crisis and riots.

Julia Hughes, senior vice president of the U.S. Association of Importers of Textiles & Apparel, said importers are supportive of the trade benefits for Haiti, but are concerned that the rules for producing there are still too complex, which has kept companies from placing more production there under an existing trade program.

Textile industry groups gave tacit support to the bill, which provides some benefits for mills.

“We have no objection to the extension [for Caribbean countries],” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “We were concerned about the Haiti provisions, but at the same time no one wanted to give the impression we are steadfastly opposed to a program designed to assist the poorest economy in our hemisphere.”