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Published:June 18th, 2006 05:49 EST
WTO Still Divided over Agricultural Tariffs, U.S. Negotiator Says By Bruce Odessey

WTO Still Divided over Agricultural Tariffs, U.S. Negotiator Says By Bruce Odessey

By SOP newswire

Washington -- A deal on agricultural market access is still beyond reach with little time left for World Trade Organization (WTO) negotiations, a U.S. trade official says.

After a week of agriculture negotiations, Jason Hafemeister, assistant U.S. trade representative, told reporters in Geneva June 16 that participants remain far apart over tariff cuts, exceptions for politically sensitive products and limits on temporary safeguards to restrict import surges.

"We`re not there," Hafemeister said.  "We still have some serious differences in this area of the negotiations."

The WTO aims for conclusion of the broader negotiations, formally called the Doha Development Agenda, by the end of 2006, well ahead of the mid-2007 expiration of the U.S. president`s trade negotiating authority.

Almost since its 2001 launch, the Doha round has remained nearly stalled over the politically difficult agricultural trade issues, especially market access.

"Without market access we don`t deliver on the Doha promise," Hafemeister said.  "Without market access we don`t create the gains from trade.  Without market access we can`t have a balanced package in any saleable sense anywhere."

To meet the deadline for the end of the year, he said, agriculture negotiators must agree at least on modalities, or a specific framework and timetable, before the WTO takes its summer break in August.

"Whether that`s June or July, I`m not particular," he said.

Ministers from some key countries are expected to convene in Geneva the last week of June to try to advance the negotiations.  A potentially crucial WTO General Council meeting is scheduled for the last week of July.

In October 2005, the United States proposed deep cuts in domestic support spending for farmers by wealthy countries and in agricultural tariffs by wealthy and rapidly growing developing countries.

New U.S. Trade Representative Susan Schwab reiterated just days ago that the U.S. proposal remained conditional on other countries offering significant new market access for U.S. exports through tariff cuts. (See related article.)

By nearly all analysis, tariff cuts proposed by the European Union (EU) would amount to no real increase in market access.  And under any existing proposal, the EU would still be allowed to spend on domestic support multiple the level allowed to the United States.

At the Geneva briefing, Hafemeister rebutted EU`s claims that under its proposal the United States could still spend as much or more money on domestic support as it spends now.

He said the United States would have to cut the most trade-distorting domestic support, in a category the WTO calls the amber box, from $19 billion to $7.6 billion a year and cap counter-cyclical spending, which assists farmers when commodity prices fall.

"When you combine those two together, the two most trade-distorting boxes, there are real cuts, and there`s no avoiding that," Hafemeister said.

Even an increase in what is called de minimis spending could not evade real cuts in domestic support, he said.  Under the existing WTO agreement, de minimis trade-distorting product-specific domestic support -- in which the aggregate value does not exceed 5 per cent of the total value of production -- is not subject to reductions.  The U.S. proposal would cut the de minimis ceiling to 2.5 percent.

Hafemeister rejected an EU demand for even more U.S. concessions.

"We`ve made a very strong offer, it hasn`t been responded to, and it`s not really a good use of our time to continue to explore strengthening our offer when we`re still very unbalanced with what`s on the table," he said.

A transcript of the briefing is available on the Web site of the Office of the U.S. Trade Representative.

For additional information on U.S. policy, see USA and the WTO.

Source: DoS