USDA Spells Out Farmer Trade Aid Payments

USDA used a three-step process to determine damages caused by unfair trade practices deployed by US trading partners against U.S. agriculture, setting the stage for efforts USDA has announced -- the Market Facilitation Program (MFP) and Food Purchase and Distribution Program.The three steps USDA used are like those used in other trade disputes, with a "white paper" issued by the Office of the Chief Economist (OCE) noting this was the same process used in the US Country of Origin Labeling dispute case. The WTO "awarded trade damages of approximately $1 billion to Canada and Mexico based on the gross trade value of their lost livestock exports to the United States due to the COOL measure," the white paper said.The effort focused on countries putting retaliatory tariffs in place on US ag products, including Canada, China, the European Union (EU), Mexico and Turkey.The three steps:Step 1: Trade value without the retaliatory tariff from a particular country.Step 2: Trade value with the retaliatory tariff from a particular country.Step 3: Take the difference of the two as the "trade damage" due to the tariff.OCE used actual 2017 trade data "as a proxy for the expected value of trade without the retaliatory tariff using import data from Canada, China, the EU, Mexico, and Turkey."While a WTO case unfolds over time, allowing for several years of trade data to be used, the effort USDA pursued used "a global trade model to estimate what the value of trade is expected to be after the imposition of the tariffs.