- The Washington Times - Tuesday, December 17, 2002

The European Union yesterday introduced a plan to cut import tariffs, lower export subsidies and reduce domestic farm supports while opening markets to agricultural products from the world's poorest countries.
Agriculture is one of the most difficult topics open to negotiations as part of worldwide talks on trade and investment rules at the World Trade Organization. National agriculture programs, such as the United States' 10-year, $182 billion farm bill signed into law by President Bush earlier this year, would be directly affected by proposals like the EU's.
Even with the intrusion into domestic policy, the Bush administration said the EU needs to offer more significant tariff and subsidy cuts.
The EU's long-awaited proposal would cut all countries' import tariffs by 36 percent, export subsidies by 45 percent and "trade distorting domestic farm support" by more than half through the next 10 years. The proposal would also have developed countries, like EU member nations, the United States and Japan, drop all tariffs for half of all agricultural exports from poor countries.
Pascal Lamy, the EU's trade commissioner, called the proposal ambitious but realistic.
The EU's executive commission has criticized the United States' proposal for agricultural trade, announced in July, calling it unrealistic.
But trade officials in Washington and Geneva were unimpressed with the EU plan.
"The proposal, while welcome, does not embrace fundamental reform in world agricultural trade," said Richard Mills, spokesman for the U.S. Trade Representative's Office.
The United States proposed reducing agricultural tariffs from a worldwide average of 62 percent to 15 percent and capping farm support.
The EU proposal also ran into criticism for not covering certain forms of financial support, such as rural development or animal welfare. WTO negotiators also noted the EU text includes no offer on how much it plans to cut export subsidies by volume.
"There's no real value without volume," said a Western diplomat.
And the proposal offers "little access to the EU market," another envoy noted.
In the last round of trade talks, rich nations agreed to increase minimum access for poorer nations from 3 percent of domestic consumption in 1995 to 5 percent by 2001.
The EU, which offers generous support to its own farmers, has been equally skeptical of U.S. proposals, at least in part because of a popular farm bill that became law in the spring.
EU officials said the U.S. farm bill which provides direct payments to farmers, spending on trade programs, funds for rural development and other money distorts trade by artificially raising prices or influencing what farmers produce.
Mr. Lamy said the proposal for worldwide agricultural trade conflicts with the United States' farm bill package.
"The United States has seriously increased potential outlays for agriculture," Mr. Lamy said at a news conference. "The U.S. will have to change its farm bill."
A U.S. Agriculture Department study from earlier this year says that over the long term, worldwide tariffs, domestic support and export subsidies reduce consumer purchasing power by $56 billion per year.
The EU the United States and other countries pledged an eventualphaseout of farm subsidies at a WTO meeting in Doha, Qatar, last year.
The EU plan, announced in Brussels, will be formally presented to the WTO in the coming days. The WTO's agriculture talks are scheduled to start in March.
The WTO's agenda includes a wide range of trade negotiations including agriculture, services, market access for industrial products, trade and environment, intellectual property, and general WTO rules.
John Zarocostas contributed to this article from Geneva.

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