EU/US table new trade offers

Brussels and Washington have tabled fresh proposals for further liberalisation of agricultural markets in an attempt to inject new life into the stalled world trade talks.

First to move in Switzerland this week was US trade representative Robert Portman. He suggested a two stage process for cutting import tariffs, export aids and trade distorting farm supports.

The first stage would last five years and see deep cuts in these market measures. The second phase would also last five years and deliver the elimination of remaining trade distorting policies.

On import protection, developed countries would have to cut their import tariffs by 55%-90%, with the highest tariffs cut the most.

Developing countries would also have to open up their markets, though with lesser tariff cuts and longer phase in periods.

The US plan also calls for the elimination of all export subsidies by 2010 – the same year as recently advocated by UK Prime Minister Tony Blair.

It also offers to put new disciplines on the export credit programmes favoured by the US, as well as on food aid to avoid commercial displacement.

On domestic supports, Mr Portman has offered to reduce US trade distorting subsidies by 60%, but has demanded an 83% cut by the EU to put the two blocs on a more even footing.

“We are ready to make meaningful changes to American farm programmes, provided our trading partners deliver tangible market access for US exports,” said Mr Portman.

EU trade commissioner Peter Mandelson also tabled a new set of proposals.

Like the US, he is advocating a tiered approach to market access, with higher cuts for higher tariffs. This would see tariffs in excess of 90% of product value cut by at least 50%.

Mr Mandelson repeated the EU’s offer to eliminate export subsidies if other countries take equivalent steps, but said an end date would have to be fixed at the Hong Kong WTO meeting in December.

His offer also included a 70% cut in the EU’s remaining trade distorting farm supports, with lesser cuts for others. “We accept the principle of progressive harmonisation of the levels of support of the main players.”

But an EU spokesman was quick to explain that this offer would simply “bind in” the CAP reforms already being implemented in the EU.

The two sets of proposals drew some praise from other key players at the meeting in Zurich. Australian trade minister Mark Vaille said it was a “good start”.

“Australia will continue to push for an ambitious result. For decades developing countries have been denied the chance to trade their way out of poverty,” he said.

Canadian trade minister Jim Peterson said the proposals were a “serious contribution”. But he had reservations about EU and US calls to maintain lists of sensitive products that might be exempt from tariff cuts.

But Oxfam accused the EU and US of playing with “smokes and mirrors”. The proposals might lower the ceilings for trade distorting supports, but the levels of actual spending would remain untouched, claimed campaign director Celine Charveriat.