By Anne-France White - 1st February 2007
The US government’s proposal for a new farm bill does not go far enough in cutting subsidies, the European commission has said.
A commission spokesman said the proposal, unveiled on 21 January by US officials, is not enough to trigger progress in the Doha global trade talks.
“If we are to have a successful outcome to the Doha Round, the US will need to propose more ambitious cuts and disciplines in trade-distorting domestic farm subsidies,” he said.
In particular, he said cuts in the so-called loan deficit payments were “extremely modest”, adding that “key trade distorting programmes for dairy and sugar remain virtually untouched”.
The commission also says the 183-page document does not signal clearly the US’s intentions for the next round of the Doha talks.
“So far as Doha is concerned, it is not possible for us to form a clear view from this proposal of what the administration’s negotiating approach will be,” the spokesman said.
But in spite of its criticism of the US proposal, the commission does note a “modest shift towards more ‘green’ direct payments”.
The commission’s statement also adds that the US proposal is “not the end of the story”, adding that “further steps are not precluded by these initial proposals”.
Talks on the stalled Doha round are being relaunched following renewed commitment to a deal at last week’s world economic forum in Davos.
Politically-sensitive farm trade is one of the main sticking points in the complex negotiations, which broke down in July 2006.
WTO chief Pascal Lamy sounded an optimistic note on 31 January, saying “the political conditions are ... more favourable for the conclusion of the round than they have been for a long time”.
The key to a deal lies in achieving deeper US cuts in farm subsidies and in slashing farm tariffs in the EU, Japan and other big importers.
But as shown by the EU’s reaction to the US farm bill proposal, there is still a long way to go before reaching an agreement.
The negotiations will also be under strong time pressure, with special US presidential powers to negotiate trade deals due to expire in July.
Earlier this week, US President George Bush formally asked the Democrat-controlled Congress to renew his negotiating authority.
But US officials have warned that this is unlikely to happen without significant progress on the Doha round.
Have your say...
Please enter your comments below.