The US is moving towards food industry protectionism, the European Commission has warned in an analysis of the country’s 2008 Farm Bill.
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The Commission said that, because the new Average Crop Election Programme (ACRE) locks in 2007-8 price increases in subsidy allocation, “if there is a high take-up and if prices fall, then expenditure could increase sharply above levels seen in recent years”.
This would especially impact subsidies for wheat, soybeans and corn.
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Brussels concluded: “US policy appears to be moving in the direction of more trade-distorting support.”
The Commission said that this is likely to make forging a World Trade Organisation Doha Development Round agreement more difficult.
The EU has also reacted angrily to plans from the US Congress to reserve steel purchases in President Obama’s economic stimulus plan to US manufacturers.
