- The Washington Times - Monday, May 10, 2004

The European Union yesterday offered key concessions to spur World Trade Organization talks, a move quickly welcomed by the Bush administration.

The 25-nation body offered to eliminate export subsidies on farm goods, to trim earlier demands that all WTO members sign on to new rules that guarantee investor rights and to carve out exemptions from trade rules for the world’s poorest countries.

“On agriculture, we believe that we have a historical opportunity for a breakthrough,” EU Trade Commissioner Pascal Lamy and Farm Commissioner Franz Fischler said in a letter to the WTO’s 147 members.

Agriculture is at the heart of WTO talks started in 2001. The ongoing negotiations are meant to create new rules by the end of this year that would boost world economies by lowering trade barriers.

An agreement that significantly lowers tariffs and reduces subsidies would boost world economies by $520 billion and lift some 144 million out of poverty, according to the World Bank.

But talks last year in Cancun, Mexico, collapsed when rich and poor nations fought to a standstill on agriculture subsidies, and rules to protect multinational corporations.

U.S. Trade Representative Robert B. Zoellick in January wrote the WTO’s members urging a renewed commitment to the talks and outlining steps that would break the impasse. Yesterday he welcomed the EU letter.

“I hope this will provide a shot in the arm to the overall negotiations,” he said.

Developing nations, led by Brazil, India and China, have fought hardest for an end to subsidies that wealthier countries pay farmers to produce and sell goods. The subsidies can spur production and lower world prices, making it harder for unsubsidized farmers to earn a living.

Brazil’s foreign ministry, which handles trade issues, said the letter put in writing offers that had been made in past weeks.

“The fact that these positions have been made public is welcomed and constitutes a move that we take positively and with satisfaction,” said Ricardo Neiva Tavares, a spokesman for Brazil’s foreign ministry.

Brazil last week rejected an earlier U.S.-EU proposal on agricultural tariffs.

Mr. Lamy yesterday said Europe was ready “to go the extra mile” to advance talks.

The bloc would stop some farm payments — export subsidies — but also demanded concessions from the United States and other nations, including cuts to U.S. farm programs and greater access for European products to overseas markets.

At the same time, the European officials said they would no longer demand investor rights, antimonopoly and government procurement regulations be written into the laws of each WTO member nation.

Europe also said it would favor allowing the poorest and weakest developing countries to gain the benefits of new rules but not be required to open further their own markets.

A handful of WTO members plan to meet informally this week in Paris, and the entire body plans to gather formally next week in Geneva.

Officials hope to reach the outline of an agreement by the end of July. The original deadline for the outline was last September.

“In a sense we’re trying to get back to where we all hoped to be last September at the Cancun ministerial,” Mr. Zoellick said.

Beyond July there is little hope for further progress this year because of scheduled changes in leadership within the European Union and elections in the United States.

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