Speaking halfway around the world from each other last week, JB Penn and Alan Tracy faced much different audiences while addressing the same issue: How does the U.S. make trade programs more responsive to markets emerging under much different world conditions than existed a mere five years ago?

JB Penn, the Undersecretary for Farm and Foreign Agricultural Services in the U.S. Department of Agriculture, presented his thoughts to a House of Representatives subcommittee that will consider the trade provisions of the upcoming farm bill, the major U.S. legislation for agricultural policy. "We must sharpen our strategic focus to include those fast-growing, emerging markets that have the most potential for market share expansion," Penn told the committee.

Among the questions he posed, "Are our aid and development programs still appropriate for today, or have they become obsolete or cumbersome?"

On the other side of the world, in Thailand, U.S. Wheat Associates President Alan Tracy presented his thoughts to over a hundred U.S. wheat customers from South Asia, and basically responded, albeit unknowingly, to Penn's question. Outlining various adjustments that are needed in U.S. food aid programs, Tracy suggested that internal rules on those programs need to be clarified and that humanitarian aid needs to be more clearly differentiated from market development programs. He also suggested that donation programs need to be more consistent from year to year, and they should be non-commodity specific.

"That is," he explained, "a country that needs food aid should not have to beg, nor to wait and wonder, nor should they be given a commodity they do not need." Tracy indicated that the U.S. could do a better job in developing documentation to confirm that the aid is not interfering with local commercial markets in the countries to which aid is given.

Penn also posed the question "should the new trade title provide more flexibility to the Secretary of Agriculture to shift priorities and funds depending on the dynamic world trade situation?" In Thailand, Tracy argued for more flexibility, especially in U.S. credit guarantee programs. "Our competitors have complained loud and long about [U.S.] credit programs.

"They call them unfair trade subsidies and demand that the programs be scaled back," Tracy told the conferees. "I couldn't disagree more. The U.S. should do more--not less--to provide credit to the markets that most need it, while meeting its obligations under global trade rules. Rather than scaling back the credit programs, we need to put more flexibility into them."

Following Penn at the committee hearing, Dusty Tallman, the president of the National Association of Wheat Growers, called on the USDA to "reconstitute" the EEP "as a flexible, commercial program." Tallman told the committee that "some business trade groups, our competitors and many in USDA have not only worked to stop the program but continue to criticize EEP as unfair and want to see it completely eliminated."

He warned the committee, "Do not let the Office of Management and Budget and internal agency politics dictate what tools you can make available to strengthen market development as well as helping our negotiators stack the deck in our favor at the negotiating table."

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