Developing countries discuss US and EU aid cuttings for farmers

Developing countries met Tuesday to discuss new offers from the United States and European Union to cut aid to farmers, just two months before the World Trade Organization hopes to conclude global trade talks.

The so-called G-20 group of developing countries, led by Brazil and India, is pushing for increased access to industrialized markets for its farmers while arguing that poorer countries should be allowed to cut their own import tariffs much less dramatically.

The countries convened in Geneva a day after U.S. Trade Representative Rob Portman gave negotiations a boost, outlining a new proposal on agricultural tariffs and subsidies and saying the EU and Japan must now promise to do more to cut aid to their own farmers.

"This means real cuts for us," Portman said Tuesday. "Right now, the U.S. has support for its farmers at one level, but the EU is at another level. Our farmers remind us of that often."

The EU responded with a proposal to make deeper cuts in subsidies to its own farmers, while Japan said the U.S. offer was insufficient. The reforms are expected to be a tough sell to farmers on both sides of the Atlantic who have profited from generous government handouts.

While ministers from Australia and New Zealand backed the U.S. proposal, both Brazil and India were more reserved, saying they still needed more time to assess the proposal.

At a Hong Kong summit scheduled for the end of the year the WTO's 148 members are supposed to agree on an outline for a global trade deal. But progress has stalled, largely because of the thorny issue of U.S. and EU farm subsidies.

The round of talks, launched in 2001, is set to conclude next year. It sets out to boost the global economy by lowering trade barriers across all sectors, with particular emphasis on developing countries, for whom farm subsidies are a particularly sensitive topic.

According to the U.S. offer, Washington would make cuts of 60 percent in trade-distorting farm subsidies. But Portman said the EU and Japan would have to make cuts of 80 percent, since their subsidy levels are higher.

European Union Trade Commissioner Peter Mandelson put forward an offer to make deeper cuts in EU farm subsidies, but it stopped short of Washington's demands.

Brussels offered to cut its subsidies in products including wheat, dairy goods and rice by 70 percent, five percentage points higher than its previous pledge. Other subsidizers, including the United States, would make lower but proportional cuts, the EU proposal said.

"The time has come for all of us to put cards on the table," Mandelson said as he laid out the EU proposals. "If we do not advance this negotiation in concrete terms this week, and among ourselves today, we will have to acknowledge that we may simply run out of time for Hong Kong."

But Japan's Agriculture Minister, Mineichi Iwanaga, said his country could not accept the U.S. offer as a basis for discussion.

"There is a very big gap between the U.S. proposal and our position because the (U.S.) domestic support reductions are insufficient," Iwanaga said, adding that Tokyo cannot accept any restrictions on its tariffs.

In Washington, Republican Senator Saxby Chambliss said that it would be difficult to get the next farm bill through Congress unless other countries also slashed their domestic support and removed obstacles blocking foreign goods from entering their farm markets.

On photo: U.S. Trade Representative Rob Portman.

T.E.