January 5, 2005
News Release 05-006
Contact: Peg O'Laughlin, 202-205-1819
GLOBAL ISSUES AFFECTING U.S. INDUSTRIES
AND THE TECHNOLOGICAL COMPETITIVENESS OF THE UNITED STATES
ARE FOCUS OF PERIODIC USITC PUBLICATION
Recent efforts to terminate U.S. tobacco quota supports and the most recent WTO agricultural
trade negotiations are among the topics examined in the current issue of Industry Trade and
Technology Review (ITTR), a periodic publication of the U.S. International Trade Commission's
(USITC's) Office of Industries.
Industry Trade and Technology Review contains articles originating from research and analysis
conducted by USITC staff as part of its responsibilities to provide advice and technical
information on industry and trade issues. The ITTR provides analysis of important issues and
insights regarding the global position of U.S. industries, the technological competitiveness of the
United States, and how trade and policy developments affect U.S. business.
The ITTR is a publication of the Office of Industries. The opinions and conclusions it contains
are those of the authors and are not the views of the Commission as a whole or of any individual
The current issue (September/October 2004) includes the following articles:
- U.S. Tobacco Quota Buyout: Issues and Analysis -- Plummeting domestic and international
demand for U.S. leaf tobacco has led to sharp reductions in U.S. production and farm
receipts, resulting in an unprecedented crisis affecting the U.S. tobacco farming sector.
Factors that led to this decline include strong competition from low-cost foreign tobacco
suppliers, a steady fall in domestic cigarette consumption, and production advancements
that use less and lower-priced tobacco per cigarette. The federal tobacco price support
program, which restricts U.S. output and prices from adjusting to world market
conditions, has been a major contributing factor to the declining price competitiveness of
U.S. tobacco. This article provides brief overviews of the U.S. tobacco industry and the
federal tobacco program, examines market factors that have made this program
unsustainable, and presents quantitative insights from partial equilibrium modeling. The
analysis indicates that eliminating the tobacco program likely would increase U.S.
production and exports of leaf tobacco. The recently signed American Jobs Creation Act
includes a buyout of the federal tobacco program, with quota and price support programs
to end after the 2004 growing season. Owners of tobacco marketing quotas will be
provided with transition payments funded by assessments on the tobacco-products
- WTO Agricultural Trade Negotiations: A Fourth Update -- World Trade Organization (WTO)
members have developed a framework for further trade liberalization of world agriculture
after four years of setbacks and some intense negotiation about the final implementation
of the earlier Uruguay Round Agreement on Agriculture. Specifics on how fast and how
far reforms will be undertaken are yet to be negotiated and a long period of discussion
and debate is anticipated before reaching a final new WTO Agreement on Agriculture.
This article, another in a series tracing developments in the agricultural negotiations,
covers the period from the Doha Ministerial in November 2001 up to agreement in July
2004 on a framework for opening markets to foreign competition, reducing export
subsidies, and reducing trade-distorting domestic supports.
In addition, the publication includes an appendix charting key performance indicators for the
steel, automobile, aluminum, flat glass, and services industries, as well as for North American
Industry Trade and Technology Review (USITC Publication 3747, September/October 2004) will
be posted on the USITC's Internet site at www.usitc.gov. A cumulative list of articles published
in the report series is also posted. The ITTR will also be available at regional federal depository
libraries in the United States. To request a printed copy of the ITTR or to be added to the mailing
list, contact the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436. Requests may also be faxed to 202-205-2104.
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