- The Washington Times - Tuesday, July 22, 2008

To kick-start the latest attempt to resuscitate the moribund global trade talks in Geneva, the European Union offered Monday to reduce its average farm tariffs by 60 percent, six percentage points higher than its previous proposal.

“That is a very considerable improvement on our part,” EU Trade Commissioner Peter Mandelson told reporters in Geneva. But he said the offer was not a gift. Rather, he insisted that fast-growing developing countries such as Brazil, China and India needed to reciprocate by proposing deeper cuts in their tariffs on industrial products.

“It’s great that [the EU] has shown its cards,” said J.P. Fielder, director of media relations for the U.S. Chamber of Commerce. “It’s a darn good hand. However, it still comes back [to] whether India, Brazil and China are even going to bring their cards to the table.”

While U.S. Trade Representative Susan C. Schwab declined to comment, her spokeswoman, Gretchen Hamel, told The Washington Times: “These are the right kind of moves at this stage of the process.”

Developing countries questioned whether the EU offer represented a major change.

“Let’s see if that 60 percent comes with the products that are of interest to us, such as ethanol, sugar and beef,” Foreign Minister Celso Amorim of Brazil told the Associated Press in Geneva. “If not, it’s not meaningful.”

Even within the EU bloc, there was disagreement over whether Mr. Mandelson’s offer represented a new proposal. Mariann Fischer Boel, the EU farm commissioner, claimed that the European Union had not conceded any ground to the developing countries.

Gary Hufbauer, a senior fellow at the Washington-based Peterson Institute for International Economics, noted that the EU offer effectively meant that a 10 percent tariff would be reduced to 4 percent rather than to 4.6 percent.

The EU’s proposal to increase its tariff reductions, while welcome, failed to address the EU’s biggest agricultural obstacle in the multilateral trade negotiations, Mr. Hufbauer said. “The biggest EU problem is farm subsidies, not tariffs.”

The Doha round of global trade talks began in Qatar in November 2001, two months after the Sept. 11 terrorist attacks on the United States. Negotiations have repeatedly broken down over disputes involving agricultural tariffs and subsidies in the European Union and the United States and import restrictions imposed on industrial and manufactured goods by rapidly growing developing economies.

This week, about three dozen nations have convened in Geneva seeking the breakthrough that has eluded members of the World Trade Organizations for nearly seven years.

The EU proposal amounted to “a small ray of sunshine in a dark room,” Mr. Hufbauer said. “But you’ll need a lot more than a single ray to brighten the dark basement.”

In 2003, a ministerial meeting broke up in Cancun, Mexico, amid angry recriminations across the board. Two years ago in Geneva, talks collapsed when Australia, Brazil, India, Japan, the European Union and the United States failed to agree on a plan to slash import barriers for farm and manufactured products.

Last year, talks among the so-called G-4 - India, Brazil, the European Union and the United States - collapsed in Potsdam, Germany, over the same issues.

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