US regrets lack of movement at WTO farm talks

Geneva, March 24 | Updated: Mar 25 2006, 05:30am hrs
World Trade Organisation (WTO) farm talks this week made no headway on the core issue of market opening, but outlines of a deal are emerging in other areas as an April deadline looms, a senior U.S. official said on Friday. On market access ... the level of ambition is not there, there are big loopholes and we have not really seen real meaningful improvements, said the official, who declined to be further identified.

WTO states are scrambling to reach draft pacts by the end of April on farm and industrial goods, key areas of the Doha round of free trade talks. Failure could end chances of a full treaty this year and possibly sink the talks altogether.

The official said he expected efforts to reach a farm deal to intensify over the next two weeks, with further meetings between various groups of key states, possibly outside Geneva.

In agriculture, the U.S. official said key elements for an accord were there for export competition and domestic support, which along with market access make up the three so-called pillars of the farm talks.

On domestic support, or subsidies, both the European Union and the United States, the major users, have put forward offers for sharp percentage cuts from their current permitted ceilings.

On export competition, the EU cleared the way for a deal with its acceptance last December of an end date of 2013 for eliminating direct export subsidies.

But Brussels remains under heavy pressure for deeper tariff cuts from both developed country farm goods exporters, such as the United States and Australia, and developing country farm powers like Brazil.

We are pretty close on export competition and we are pretty close on domestic support, where you just have to figure out what the numbers are, the U.S. official said.

We were hoping to see some real offers on the market access side, he added.


The official said that discussions had focused largely on sensitive products, which are those that will be partially shielded from any tariff-cutting formula that is agreed.

Brussels wants to classify 8 percent of tariff lines as sensitive, although EU officials say privately the bloc is prepared to see this figure fall significantly.

It has not spelled out the goods to be covered, but they would be expected to include dairy produce, beef and sugar.

The Doha negotiating mandate also calls for significant market opening even in sensitive products, and talks in Geneva this week focused on how this could be done.

There is a general recognition that the EU approach is too complex and does not offer enough, the official said.

Despite the U.S. officials assertion that an accord appeared near on domestic support, Brazil and the EU are still pressing Washington for further cuts.

In particular, they want tighter controls on the so-called blue box, which is farm spending deemed to be a half-way house between significantly market-distorting support and that considered to have little impact on trade.

The U.S. official rejected an EU call for caps on spending on individual crops, saying Washington had already agreed to set a low ceiling for overall blue box use and was willing to give guarantees against concentrating cash in a few areas. On food aid, another controversial area of the export competition talks, the official proposals put forward by African states this week, including a definition of emergency assistance, could provide the basis for an accord.