WASHINGTON — The Senate passed a more than $300 billion farm, nutrition and conservation bill Thursday by a veto-proof majority, setting the stage for a showdown with President Bush.
The president has vowed to veto the five-year legislation, which has trade implications for the apparel and textile industry, because he wants to limit subsidies for farmers as commodity prices skyrocket. The administration also argues the bill runs counter to the goals of the Doha Round of global trade talks that aim to cut subsidies and lower prices for developing nations.With bipartisan support, the Senate vote of 81-15 came a day after the House passed a companion bill that also received more than the two-thirds majority needed for a veto override.
“This bill has reform in it,” said Senate Majority Leader Harry Reid (D., Nev.). “Could we have done more? Perhaps. But had we done more we wouldn’t have gotten a bill.”
Reid said 13 percent of the total funding will go to farm programs, and 74 percent will be earmarked for nutrition programs such as food stamps.Passage of the bill could damage the World Trade Organization-sponsored Doha talks by generating conflict with developing countries seeking deep agriculture subsidy cuts from the U.S. and European Union, Bush administration officials said.
“There is some good news and some disappointing news in this bill,” said Stephen Lamar, executive vice president of the American Apparel & Footwear Association, citing a two-year extension of a trade preference program for Caribbean countries and expanded trade benefits for Haiti as two of the positives.
U.S. textile producers, who largely supported the broader farm bill, expressed concern the new benefits for Haiti could undercut some of the $63 million in U.S. fabric and yarn export business in the region because companies in Central America that use U.S. yarn and fabric might increase business in Haiti.
“There is reason for some apprehension,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.
The bill gives some relief to retailers and apparel firms by directing U.S. Customs & Border Protection to conduct impact studies before moving ahead with a proposed change in a “First Sale” rule. Customs wants to raise duties on imports that are now based on the value of a finished product at the point of first sale in the supply chain — generally the factory cost price — to the higher value of a product at final import, basically the wholesale price.