The Bush administration said it will unveil soon its plan to eliminate farm-trade barriers through the WTO by reducing tariffs and tackling global farm subsidies.
While companies including Kellogg Co and Archer Daniels Midland Co welcome the push to cut subsidies and tariffs, Imperial Sugar Co and Sunkist Growers Inc. say they may be hurt if the US drops barriers to cheap sugar and citrus imports.
The plan is "very aggressive on tariffs," said Sarah Fogarty, international trade director at the Grocery Manufacturers of America. "It's comprehensive in terms of market access. It's fair in putting our domestic support on the table."
The proposal, to be released simultaneously by US Trade Representative Robert Zoellick in Washington and Agriculture Secretary Ann Veneman in Japan, lays out what the US hopes to achieve to further open the US$850 billion world market in agricultural products.
The plan is being offered as US trade partners, including China, Canada, Japan and the EU, have challenged US moves to protect domestic steelmakers and lumber producers from foreign competition while boosting government support for farmers.
On tariffs, the US wants to address so-called "peaks" and "escalation," high duties used by countries to protect their most sensitive farm sectors.
The US proposes to cut those high tariffs the most and the fastest, to bring them more in line with a country's average agricultural tariff.
The US proposal will be submitted to the WTO talks in Geneva along with competing proposals from the EU, Japan and other members. The plan also lays out proposals to tackle foreign farm subsidies, both direct payments to farmers and export subsidies.
In June, special agriculture negotiator Allen Johnson said the US wants to eliminate global farm subsidies within five years of the scheduled 2005 completion of the current round of WTO negotiations.
His call came as the US was criticized by its trading partners for enacting a farm bill that boosts government support for US farmers by as much as US$190 billion over 10 years.
Zoellick has called the increase in farm spending a "build-up to build down."
He said legislating the maximum support allowed to the US by WTO rules -- US$19 billion a year, versus US$40 billion a year in Japan and US$60 billion in the EU -- gives the US more negotiating power.
Taking on tariffs and subsidies abroad means the US will also have to put its own duties and farm supports on the table, said Fogarty, who represents companies including Campbell Soup Co and Sara Lee Corp.
Beneficiaries of peak tariffs say they are concerned.
"Our concern is straight-across-the-board issues like tariff reduction," said Andy Lavigne, chief executive officer of Florida Citrus Mutual, the largest US growers association, which supplies fruit to Sunkist, Pepsico's Inc's Tropicana division and other juice makers. "They can't trade us off for something else."
Citrus fruit and juice imports to the US are now subject to tariffs of up to 63 percent, which can add 30 cents to the price of a gallon of foreign juice, Lavigne said.
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