- The Washington Times - Friday, October 14, 2005

The Bush administration’s top trade official yesterday said he is “disappointed” with the European Union for refusing to match a U.S. offer to reduce farm subsidies and open its markets to agricultural products.

But U.S. Trade Representative Rob Portman, in Washington between a round of negotiations this week in Zurich and next week in Geneva, said he remained optimistic that the World Trade Organization’s 148 members would break open deadlocked talks.

“The U.S. has now done its part. It’s time for the EU and others to respond,” Mr. Portman said.

WTO members since 2001 have been working to boost trade and economic development by lowering trade barriers, but talks have stalled over issues such as how wide to open markets and how much to scale back farm subsidies.

The talks are entering a crucial phase, with a WTO summit set for mid-December in Hong Kong that will likely determine if countries meet a final deadline at the end of 2006.

“There’s not enough time for us to dither. We have to make decisions,” Mr. Portman said.

The U.S. this week offered to cut farm subsidies that most distort trade by 60 percent over five years if other nations lower their payments proportionally and open their markets to most U.S. exports.

The reaction, at home and abroad, was mixed. Some members of Congress warned the administration not to go too far in dismantling farm programs, while Japan rejected the offer and the 25-nation European Union responded with a more tepid counterproposal.

“It is fair game for some to say that Europe is not doing enough,” Peter Mandelson, the EU trade commissioner, said Thursday.

Mr. Mandelson said that Europe already has made unprecedented concessions, and would outline further steps.

Still, the bloc may be limited by pressure from its own major agricultural producers. France called an emergency meeting of European leaders for Tuesday in part to discuss the WTO negotiations. The founding member of the EU has a strong and politically active farm community that is rallying to defend agricultural programs.

President Bush and European Commission President Jose Manuel Barroso are scheduled to meet the same day at the White House in part to discuss the WTO.

“Nothing is more important on our short-term horizon than ensuring the success of the WTO Hong Kong Ministerial meeting to set the framework for concluding the WTO … round,” Mr. Barroso said.

The U.S. and Europe are the WTO’s biggest members, but the body operates by consensus and both Mr. Mandelson and Mr. Portman prodded other countries to join more wholeheartedly in the give-and-take of negotiations.

Mr. Portman, for example, said a bloc of 20 nations led by Brazil was not offering to open its market far enough.

“We are making progress. But again this [Brazilian proposal] too fell short of expectations that people had and the level of ambition that has been set by our proposal,” he said, adding that he hoped to see “serious” proposals next week.

India, a member of the Brazil-led bloc, said it would not open its market further unless the U.S. promised even greater cuts to subsidies.

Gary Hufbauer, senior fellow at the Institute for International Economics, a Washington think tank that supports trade liberalization, said countries such as Brazil and India are demanding excessive concessions on farm trade.

“To me that indicates they don’t want to negotiate,” he said. “We shall see if there is a little give on the way to Hong Kong. But the position of these big, developing countries is the big barrier.”



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