US offer of big farm-subsidy cuts wins warm welcome from Europe

An offer by the Americans yesterday to eliminate agriculture export subsidies by 2010 and reduce trade-distorting payments by 60 per cent was welcomed by European negotiators, although officials were yesterday studying the details. Agricultural subsidies have been a crucial obstacle in the negotiations, with developing countries and non-government organisations demanding reductions in subsidies, which are worth $180bn (£102bn) to US and European farmers.

European negotiators know that only if they dismantle export subsidies and reduce domestic payments will developing countries open more of their markets to industrial goods and services.

Crucially, yesterday's offer by the US put a series of figures on the table for discussion. It also appeared to vindicate the EU's strategy, which made an earlier offer to get rid of export subsidies if other sides do the same.

Speaking in Zurich, the US trade representative, Rob Portman, said the US "is willing to take some pain" to revive the talks, which began in December 2001. The EU trade commissioner, Peter Mandelson, said the US offer was the step "we asked them to take". He argued: "The time has come for all of us to put cards on the table; to stop bidding and to start to play the hand." Negotiators are up against a tight deadline, with a deal sought at a meeting in Hong Kong in mid-December.

A spokesman for Mr Mandelson said the US proposals were still being studied but could prove a "shot in the arm" to the talks. He added: "They have encouraged people here, and there is a greater sense of optimism that Hong Kong can produce a meaningful agreement, though there is a lot of work to do."

The European Commission yesterday issued a paper on its position, repeating the offer made to cut trade-distorting subsidies by 70 per cent, and adding details of further proposals. The EU is in a position to do so because of Common Agricultural Policy reforms already agreed.

But Oxfam described the US initiative as a "case of smoke and mirrors", adding: "If this offer goes ahead, trade-distorting domestic subsidies will remain almost completely unchanged and dumping will continue. Meanwhile, harsh concessions on market access will be wrung from developing country members in exchange for illusory progress."

The US proposals build on President George Bush's offer last month at the United Nations to eliminate all trade barriers and subsidies, but this was widely seen as a ploy, aimed at burnishing Washington's free trade credentials while embarrassing Europe.

Pressure to break the deadlock on farm subsidies has become intense, because the conflict is stalling progress on the entire Doha round of trade liberalisation.

The domestic climate in the US for major change is more favourable than for some time. With the budget deficit soaring, the Bush administration is looking desperately for cuts in federal spending. The 2002 farm support bill, which offers $180bn of subsidies over 10 years and comes up for renewal in 2007, is a prime candidate. The question mark is Congress, which would have to approve any changes. The last time the administration called for major reform, it backed off after fierce opposition on Capitol Hill. The 2002 bill, enacted before that year's mid term elections, helped Mr Bush and the Republicans make gains in the Mid-West and the cotton- producing South.

Both the party and the White House would be loath to make major concessions now, unless they could claim the EU had made even larger adjustments. Analysts say hard bargaining lies ahead.

The issues

* WHAT THE US WANTS The US knows its current trade rules are indefensible and is under pressure to make changes. The government has lost several rulings on international trade issues and needs to reduce a federal budget ballooning in the wake of the Iraq war and Hurricane Katrina relief effort. Washington's pretensions to stand up for the interests of Third World countries are at stake.

* WHAT EUROPE WANTS With reforms to the Common Agricultural Policy agreed, the EU strategy is to challenge other countries to match changes being implemented in Europe. It has offered to eliminate all export subsidies if others do the same. If the big First World nations cut farm subsidies, it is hoped emerging nations will open their markets to European industrial products.

* WHAT THE OTHERS WANT Brazil, India and China have grown in influence and their priority is better market access to Western countries and a reduction in those countries' agricultural subsidies. The wider grouping of 90 poorer nations has disparate objectives. This is because the poorest often already enjoy tariff-free deals with the EU on which sections of their economies rely.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete tomorrow
News
Piers Morgan tells Scots they might not have to suffer living on the same island as him if they vote ‘No’ to Scottish Independence
peopleBroadcaster has a new role bringing 'the big stories that matter' to US
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
Life and Style
Moves to regulate e-cigarettes and similar products as medicines come amid increasing evidence of their effectiveness
healthHuge anti-smoking campaign kicks off on Wednesday
Life and Style
fashionEveryone, apparently
Voices
The erotic novel Fifty Shades of Grey has already been blamed for a rise in the number of callouts to the fire brigade for people trapped in handcuffs
voicesJustine Elyot: Since Fifty Shades there's no need to be secretive about it — everyone's at it
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
art
Arts and Entertainment
Shia LaBeouf is one of Brad Pitt's favourite actors in the world ever, apparently
filmsAn 'eccentric' choice, certainly
Life and Style
An Internet security expert has warned that voice recognition technology needs to be more secure
techExperts warn hackers could control our homes or spend our money simply by speaking
Extras
indybest
News
peopleBenjamin Netanyahu trolled by group promoting two-state solution
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

1st Line Service Desk Analyst

£27000 - £30000 Per Annum: Clearwater People Solutions Ltd: Our client who are...

Trainee Recruitment Consultant - Manchester - Progressive Rec.

£18000 - £23000 per annum + Commission: SThree: Progressive Recruitment are cu...

Trainee Recruitment Consultant - Manchester - Huxley Associates

£18000 - £23000 per annum + Commission: SThree: One of SThree's most successfu...

Trainee Recruitment Consultant - Birmingham - Progressive Rec.

£18000 - £23000 per annum + Commission: SThree: Progressive Recruitment are cu...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style