The Bush Administration has signaled its desire to slash long-standing agricultural subsidies as part of the next WTO pact. U.S. Trade representative Robert Portman is suggesting cuts of up to 60% in U.S. subsidies to producers, which drew enthusiastic support from dairy manufacturers’ representatives.

“USTR’s aggressive proposal is exactly what is needed to get the crucial WTO negotiations back on track,” said Clay Hough, sr. v.p. and gen. counsel of the IDFA. “This should prompt real movement during December’s Hong Kong WTO Ministerial.”

Manufacturers have lobbied long and hard to reduce or eliminate agriculture subsidies they say keep the cost of raw dairy products artificially high. But Congress preserved many support programs in the recent extension of the Farm Bill. Portman’s proposal also faced a brick wall without agreement by other member nations to reduce their agricultural subsidies as well – something European governments, especially, have been unwilling to do in the past.

There was a bitter fight in Congress last summer over passage of the Central American Free Trade Agreement-Dominican Republic (CAFTA-DR) but the National Association of Manufacturers says the latest trade deficit numbers show it was right for lawmakers to approve it. While the overall U.S. trade deficit in manufactured goods has continued to worsen this year, a NAM report says the deficit with countries with which the United States has entered into free trade agreements has markedly improved.

“It’s time for those who opposed CAFTA, NAFTA and other FTAs to move past raw emotion and politics for a closer look at the facts,” said NAM President John Engler. “The facts show that free trade agreements are good for our trade balance, and that our economy stands to benefit from more of them as quickly as they can be negotiated.”

Engler said NAFTA and other free trade agreements now account for 43% of our manufactured goods exports, but only 6% of our deficit.

USDA has announced a third adjustment to the sugar program in order to increase U.S. market needs after the recent Gulf coast hurricanes caused supply disruptions. In this most recent adjustment, USDA increased the fiscal year 2006 marketing allotment quantity, and the sugar cane portion of the increase was immediately reassigned to imports.

The new total Overall Allotment Quantity is now 8.825 million short tons raw value, with 4.796 million STRV allocated to the beet sector and 4.029 million STRV allocated to the cane sector. The allocations of this OAQ increase to beet and cane companies will be announced later.