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US offers to cut its 13b in farm subsidies { June 30 2006 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/30/AR2006063000462.htmlhttp://www.washingtonpost.com/wp-dyn/content/article/2006/06/30/AR2006063000462.html
US defends WTO farm offer
By Sophie Walker
Reuters
Friday, June 30, 2006; 9:28 AM
GENEVA (Reuters) - The United States, under pressure on Friday to help break a deadlock in trade talks, defended its offered farm subsidy cuts and said others needed to hack deeper into their import tariffs before it could move more.
U.S. Agriculture Secretary Mike Johanns told reporters in Geneva -- where World Trade Organization member countries are trying to narrow gaps on farm and industrial trade -- that the United States had offered "fundamental change" to its subsidies.
Ministers from about a third of WTO member countries are battling to find common ground on a proposed deal to lower farm trade barriers as a vital step to a broader global pact. The Doha Development round of negotiations, launched in 2001, is fast running out of time to be concluded and tension is high.
"How could anybody argue that it is not a meaningful reduction, when literally we are saying the very heart of the U.S. farm program is directly impacted by the cuts we have put on the table?" Johanns said. "It is very, very real."
Washington has said it will cut its WTO allowance for most trade-distorting subsidies -- the "amber box" -- by 60 percent.
Critics say overall, the U.S. offer will not necessarily cut into actual spending because they can make up the payments from other areas. Johanns said those claims were not accurate.
"The majority of the subsidies we would run through U.S. farm programs operate through the amber box," he said, adding the 60 percent proposal would cut that spending allowance to $7.6 billion from an estimated $12.5 billion in 2005.
TARIFFS CUTS
Rich nation farm subsidies and tariffs, together with industrial tariffs in developing states, form the "triangle" where WTO chief Pascal Lamy says a deal must be done.
Doha was conceived with the ultimate aim of lifting millions out of poverty by boosting global trade, and poor nations are adamant a deal in farm goods must be concluded first to protect their main export opportunities.
Washington says the European Union is at fault for not cracking open agricultural markets.
Brussels has hinted in recent days that it could move closer to a proposal by the G20 group of developing markets for an average 54 percent tariff cut. But the original U.S. subsidy offer was conditional on Brussels agreeing to cut its import duties by 66 percent.
The complicated negotiations do not end there however. Huge differences remain among WTO countries about proposed exemptions for politically-sensitive farm products, such as dairy and rice. The United States has suggested just one percent of tariff lines be shielded from the deepest cuts, while the European Union wants eight percent.
Talks on Friday afternoon were expected to focus on how countries might narrow differences in this regard.
"We are here to roll up our sleeves. If countries can match our ambition, we can do some very hard work together," Johanns said.
© 2006 Reuters
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