EU subsidies to end if deal is right

BRUSSELS HAS offered to eliminate all its export subsidies – one of the key tools for maintaining EU farm prices above world levels – if it gets a good enough deal on other aspects in the Doha Round of world trade talks.

In a letter sent to other WTO members, EU trade commissioner Pascal Lamy said that, “if an acceptable outcome emerges on market access and domestic support, we would be ready to move on export subsidies”.

Until now, the commission has said it was only prepared to eliminate export subsidies on a list of products of interest to developing countries.

But, owing to the diverse nature of these countries, no list had emerged, said Mr Lamy.

The EU was therefore prepared to go a step further and put all its export subsidies on the table.

But any deal will only be possible if other WTO members are prepared to make equivalent cuts.

“This means that our international partners have to match the EU on their forms of export support such as export credits, abuse of food aid or state trading enterprises,” said EU farm commissioner Franz Fischler.

Addressing journalists at an informal EU farm council in Ireland, Dr Fischler said that the EU was also looking to close a loophole which allows the US to spend $8bn (£4.5bn) on trade distorting farm support.

And it wants guarantees that the so-called “green box” measures, which include future EU decoupled payments, will be free of restrictions.

Some WTO members, including the Cairns Groups, want these supports curtailed too.

The commission offer is intended to kick-start the stalled Doha Round, aimed at liberalising trade and helping the world‘s poor.

Mr Lamy said the WTO had a narrow window of opportunity to make progress before the US gets embroiled in its presidential election after the summer.

He called for WTO members to reach a framework agreement by the end of July.

Currently the EU spends around €2.8bn (£1.8bn) a year on export subsidies.

It claims the US spends $3.2bn (£1.9bn) on export credits to boost market share.