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Fri, Aug 15, 2003 - Page 12 News List

EU, US plan agriculture reform

REAP WHAT IS SOWN The 146 members of the WTO continued their battle to find common ground for next month's round of trade-liberalization talks in Cancun


The EU and the US on Wednesday put up a plan for farm trade reform that could inject new life into stalled talks for a new global trade pact -- but poorer countries said "no go."

The scheme, presented to the WTO just hours after it was drafted, came as the 146 members of the body battled to find something to agree on at a key ministerial meeting in Cancun, Mexico, next month.

The gathering -- at the half-way point of the WTO's troubled Doha Round -- is widely viewed as a make-or-break effort, and diplomats say the making or breaking depends almost entirely on everyone agreeing on how to handle agriculture.

The proposal from the 15-nation EU and the US -- the biggest players in global trade in farm goods -- was concluded on Tuesday night by negotiators who have been locked in closed-door talks for the past two weeks.

The plan covered the three areas of agricultural trade -- domestic support, export subsidies and market access -- but avoided putting figures on its call for reforms.

Although billed by EU Farm Commissioner Franz Fischler as offering a good deal to developing countries and other agricultural powers like Australia and New Zealand, it seemed to have failed to impress.

India's envoy K.M. Chandra-sekhar said it was "not feasible," adding: "It does not take account of our farmers' interests ... and seems to be an attempt to prise open developing country markets without commitment by rich countries to open theirs."

Brazil's Luiz Felipe de Seixas Correa said the 18-nation Cairns Group of farm produce-exporters -- which includes emerging economies and some richer nations -- felt the plan "falls short" of targets set for the Round.

The group, which had been demanding early and radical moves to end all types of farm support in the EU and the US, said the proposals were "not enough" and were too vague to be a basis for real negotiation, according to the envoy.

The plan skated around some contentious issues, like a demand by the EU and some others, including India, for more trademark protection for special products -- such as champagne and Basmati rice -- whose names are taken as a sign of quality.

The US and the EU are the biggest providers of subsidies to domestic farmers, one of the most controversial issues in the negotiations.

Developing countries say rich state farm subsidies -- running to over US$300 billion a year -- prevent them competing on equal terms in international markets.

Diplomats said an agreement between the two farm giants was a crucial first step to an overall farm accord but the blueprint must still win the backing of the full 146-member WTO.

"We have always acknowledged that the United States and the European Union had to find common ground," said Australian ambassador David Spencer. "But whether it is a basis for a decision at Cancun remains to be seen."

On tariffs, the EU-US deal contained a hybrid formula marrying the gentle across-the-board cuts used in previous international farm agreements with a call for a more aggressive capping of duties in some areas.

As a sweetener for poorer states, richer WTO members would allow duty free access to an unspecified portion of their markets from developing countries.

A similarly mixed approach would apply to export subsidies and to export credits, while US food aid programs -- which critics say are often disguised export subsidies -- would also be subject to greater scrutiny.

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