29 June 2000
USA to target CAP payments

DIRECT EU payments to farmers under the Common Agricultural Policy are the target of the USA in World Trade Organisation talks on liberalising agricultural aid.

Washington proposes dividing domestic support into two categories, rather than the present three, reports the Financial Times.

As a result, subsidies would either be exempt – as is the case now – since they have little impact on trade, or non-exempt and subject to reductions.

This proposal would eliminate the WTOs “blue box” system protecting direct payments to farmers from subsidy reduction commitments, says the FT.

While the Australian-led Cairns Group is expected to back the proposal, the EU has submitted a defence of “blue box” arrangements.