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Mon, Jul 12, 2004 - Page 12 News List

At informal WTO meeting, EU hopes to make progress

AP , PARIS

The EU pressed the US to drop export credits on farm goods as five key WTO members held an informal meeting, hoping for progress toward a new global trade deal.

"The ball is now in the court of the Americans to say what they're really offering," said Gregor Kreuzhuber, spokesman for EU Agriculture Commissioner Franz Fischler.

"What they've offered so far is not yet good enough," he said.

Fischler and his EU trade colleague Pascal Lamy arrived in the French capital Saturday for talks with WTO counterparts including US Trade Representative Robert Zoellick.

Brazilian Foreign Minister Celso Amorim is hosting the two-day meeting at the Brazilian embassy, also attended by Indian Commerce and Industry Minister Kamal Nath and a delegation of Australian officials.

Efforts to broker a new global trade treaty are now almost a year behind schedule but received a boost in May, when the EU said it was ready to drop agricultural export subsidies.

The controversial payments to EU exporters are blamed for hurting developing countries by undercutting their own farmers' prices.

Brussels says it will end the subsidies only if other rich WTO members scrap their own export aid, including credits to US farmers and state-owned boards that coordinate some exports from Canada, Australia and New Zealand.

But Washington has so far refused to abolish its farm export credits -- government loans enabling producers to offer low-risk credit to overseas customers -- offering instead to cut what it calls the trade-distorting "subsidy elements" of the scheme.

A US trade official defended the American position, saying Washington had agreed to eliminate export subsidies long before Brussels.

The official, who asked not to be identified, also attacked the EU for resisting moves backed by the US and "many other countries" to cut down on industrial aid.

Almost all of the WTO's 147 members agree that the global economy needs a new trade treaty to cut tariffs and subsidies, opening up markets to more international commerce.

But the hard part is agreeing who should cut what by how much, especially in the politically charged area of agriculture -- which remains the toughest sticking point since it derailed last September's WTO meeting in Cancun, Mexico.

Negotiators are struggling to find a compromise between rich agricultural protectionists like Japan, who maintain high import tariffs to protect their own farmers, and exporters from Australia to Brazil who want tariffs slashed.

Japan, Switzerland and the eight other members of the so-called Group of 10 heavy farm importers warned last Monday that they would not sign on to a deal that imposed strict caps on their highest tariffs.

Proposals introduced by Washington last month would allow the protectionists to keep high tariffs on some of the most "sensitive" farm goods provided they increase quotas, the limited quantities allowed onto their markets duty free or at reduced tariffs.

The US and other key WTO members are concerned that slow progress on agriculture tariffs could make it impossible to reach a deal on industrial goods -- which represent 90 percent of world trade -- before the July 31 deadline.

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