US farm support targeted as WTO talks begin

GENEVA - The United States faced pressure on Monday to make bigger cuts in trade-distorting farm subsidies at the start of a week of global trade negotiations.

By (Reuters)

Published: Mon 21 Jul 2008, 8:30 PM

Last updated: Sun 5 Apr 2015, 12:55 PM

"We know we're going to need to make further contributions than the many contributions we already have put on the table," U.S. Trade Representative Susan Schwab told a news conference.

But a deal is possible only if big emerging markets such as China, India and Brazil open their agriculture, manufacturing and services markets to more foreign trade, Schwab said.

"We are looking forward to seeing the contributions of others," she said after an opening session with trade ministers from about three dozen member states of the World Trade Organisation.

WTO Director-General Pascal Lamy emphasized the positive signal an agreement this week would send to global financial markets rocked by the U.S. credit crisis and rising food and energy prices.

"There is widespread recognition that a balanced outcome for the Doha round could in these circumstances provide a strong push to stimulate economic growth, providing better prospects for development and ensuring a stable and more predictable trading system," WTO spokesman Keith Rockwell quoted Lamy as telling delegates.

No earth-shaking moves

No country signalled a major change in position on Monday, but that was typical for this stage, Rockwell said.

The latest text of the proposed deal requires the United States to cut its spending cap on "overall trade-distorting support" to a range between $13 billion and $16.4 billion, from the current ceiling of $48.2 billion.

But high prices have cut U.S. farm programme spending dramatically in recent years, and leading developing countries such as Brazil and India want a new U.S. ceiling closer to current outlays of approximately $7 billion.

Meanwhile, the European Union is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.

The EU's offer on farm tariff cuts, depending on a deal on tropical products still to be agreed, could reach an average 60 percent, against the currently proposed 54 percent minimum, a spokesman for EU Trade Commissioner Peter Mandelson said.

"We are signalling that we are prepared to make a down payment in order to generate movement here in Geneva," spokesman Peter Power said.

Nonetheless, the EU step earned U.S. praise.

"These are the right kind of moves at this stage of the process," USTR spokeswoman Gretchen Hamel said.

Developing countries say the onus is very much on rich nations to make the necessary changes.

"We are looking for a concrete offer on the table which hasn't come out yet. We are looking for U.S. leadership on this issue," Indonesian Trade Minister Mari Pangestu said.

Developed country hopes for increased exports must take a back seat to development goals of the round, Pangestu said.

"The development aspects are crucial, otherwise why call it a development round?" she told Reuters, referring to the talks' formal title, the Doha Development Agenda.

Oxfam International, a leading development group, echoed calls for deeper U.S. farm subsidy cuts and also urged the United States to trim its market access demands.

"Rich countries must stop demanding harsh conditions from developing countries," the group said in a new report which said new U.S. farm legislation that boosts subsidies had greatly complicated chances of reaching a deal.

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