- The Washington Times - Friday, May 7, 2004

A group of developing nations yesterday rejected a U.S.-EU proposal to cut agricultural tariffs worldwide, threatening progress on a global accord.

Agriculture is at the core of World Trade Organization talks meant to spur economic growth and development through increased commerce in manufactured goods, farm products and services.

But it is also the most sensitive issue and contributed to the collapse of WTO negotiations in Cancun, Mexico, in September. Developed and developing nations could not agree on a basic outline to lower subsidies and trade barriers.

The two sides that faced off in Cancun resumed sniping yesterday when a group of developing nations led by Brazil, India and China, known as the Group of 20, formally rejected a U.S.-EU proposal on tariffs.

The United States and the European Union last year, hoping to break a stalemate ahead of the Cancun meeting, proposed a “blended formula” that generally would have countries with the highest tariffs make the biggest cuts, but would allow for some exceptions on specific products.

“This formula doesn’t work,” Brazil’s ambassador to the WTO, Luis Felipe de Seixas Correa, said in Geneva yesterday. The formula would leave nations like Brazil with little in the way of new access to rich-country markets, he said.

U.S. Trade Representative Robert B. Zoellick in Washington said the developing nations should propose an alternative if they reject the U.S.-EU approach.

“The G-20 doesn’t like the blended formula, but he didn’t say what he would like. And this is going to be the real challenge here. The United States prefers a very ambitious result in market access. Some of the G-20 countries do, some don’t. We’re going to have to end up with some compromise here,” he said.

Formal agricultural negotiations resumed this year and informal but high-level negotiations are set for next week among a handful of WTO members in Paris.

Despite the renewed fight, trade officials said they were hopeful that the Paris gathering would help outline a broader agreement by the end of July.

“It is my hope that the types of meetings we have next week and others could actually allow us by the end of July to come to some agreement on roughly that type of framework, which was what we didn’t do in Cancun,” Mr. Zoellick said.

The WTO talks are already well behind schedule.

The official deadline for a new agreement, January 2005, is all but out of reach. Moreover, U.S. elections and a scheduled change in the leadership of the 25-nation European Union leave only about two months before 2004 is written off.

Next week’s informal meetings are set to take place on the sidelines of an Organization of Economic Cooperation and Development gathering.

This article is based in part on wire-service reports.

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