Countries would stop paying export subsidies to their farmers and trade barriers would be lowered under a proposal released yesterday by the World Trade Organization.
Agriculture supports and tariffs are one of the most difficult issues facing negotiators as they try to update global trade rules.
The cool reactions to the WTO draft highlighted the differences yesterday.
Trade officials from 25 countries, including the United States, will meet in Tokyo starting tomorrow to discuss the latest proposal and other issues dividing the 145 WTO members.
The United States will focus “as much attention as we can” on eliminating export subsidies, substantially reducing domestic supports and cutting tariffs, U.S. Trade Representative Robert B. Zoellick said during a Tuesday press conference.
“Obviously we’re not going to be able to do that unless we get the Europeans and the Japanese to go along,” Mr. Zoellick said.
The United States, the European Union and Japan are three of the world’s biggest agricultural traders, and all rely to some degree on tariffs and price supports.
A December report by the U.S. Department of Agriculture estimated that agricultural subsidies in the United States are worth about 21 percent of the country’s production value, while it reaches 35 percent in Europe and almost 60 percent in Japan. U.S. tariffs average 12 percent, EU tariffs 30 percent and Japan’s almost 50 percent, the report said.
The WTO agriculture proposal, written by Stuart Harbinson, chairman of the WTO’s agriculture negotiations and a former ambassador from Hong Kong, acknowledged the “difficulty participants have so far had in building bridges between widely divergent positions.”
Mr. Harbinson’s outline would drop all export subsidies over nine years, reduce import duties using a formula that cuts the highest tariffs the most but still leaves many in place, increase import quotas, and offer developing countries a chance to protect “strategic products.”
The Bush administration said the proposal does not go far enough.
“The WTO needs to eliminate export subsidies. The United States believes, however, that this step needs to be matched by deeper cuts in tariffs and trade-distorting domestic subsidies,” said Richard Mills, spokesman for the U.S. trade representative.
WTO members set a March 31 deadline to agree on a framework for agriculture talks. Jan. 1, 2005, is the deadline for an overall agreement.
The United States, Australia and a handful of other countries have been pushing for some of the deepest reductions in tariffs and subsidies.
Developing nations have been leery of cutting tariffs too much and leaving producers vulnerable to global competition, but have been critical of U.S. and European subsidies.
The European Union, backed by Japan, has proposed measures that try to help developing countries while allowing for extensive farm supports.
The 15-nation European Union immediately criticized Mr. Harbinson’s plan as “unbalanced, spreading the burden very unevenly amongst the developed countries.”
“It fails to address the huge market distortions created by certain forms of subsidies typically granted in other major developed countries,” the European Union said in a statement.
Development groups were also suspicious of the proposal.
“It would be devastating,” said Aileen Kwa, research director with Focus on the Global South, a Thailand-based research group.
The plan would leave developing countries at a competitive disadvantage, cause food insecurity and increase reliance on imports for developing countries, she said.