The World Trade Organization is waiting on the European Union to submit a “meaningful and credible” proposal on market access to keep the Doha Round negotiations from unraveling before the start of the Hong Kong meeting of WTO trade ministers in December.
The United States and members of the G20 group of countries appear to have reached agreement on a number of issues under two of the so-called three pillars of agriculture in the trade talks, says U.S. Trade Representative Rob Portman. Those two are export competition and domestic support.
But lack of consensus on the third pillar — market access — threatens to derail the agricultural negotiations ahead of the Hong Kong ministerial meeting, Portman told reporters covering a press briefing at the U.S. Trade Mission in Geneva.
“Frankly, in order to complete negotiations by the end of 2006, we have to unlock these discussions on agriculture,” he said. “And there the responsibility at this point rests squarely with the European Union and their ability to come forward with a proposal that is meaningful and credible on market access.”
Portman said the United States offered such a meaningful and credible proposal when it announced earlier this month that it would eliminate its export subsidies and reduce its farm subsidies by an average of 60 percent.
“Our proposal does provide for real cuts in our programs,” he said. “We are certainly hearing that from our farm community, and we are hearing that because we are making a serious commitment here.”
Shortly after Portman announced the subsidy-reduction proposal at a meeting of WTO members in Zurich Oct. 10, Senate Agriculture Committee Chairman Saxby Chambliss sent him a letter reminding him the U.S. Congress would have the final say on any reductions in U.S. farm programs.
Senate Democrats, speaking at a mark-up session for the Ag Committee's budget reconciliation proposal, also accused the Bush administration of seeking to “unilaterally disarm” U.S. farmers in the WTO talks by offering to make such drastic reductions in U.S. farm programs without consulting Congress.
U.S. farm organizations have said they will support the proposed reductions in farm subsidies only if other countries will provide greater market access for U.S. agricultural products.
WTO Director-General Pascal Lamy said the United States had made a “solid contribution” to the efforts to reduce domestic support prices and called on all WTO member countries to work to move their positions on market access closer together.
France appears to be the main sticking point for the European Union to be more accommodating on market access, according to press reports.
All 25 members of the EU, where tariffs average around 62 percent for agricultural products, would have to make substantial reductions compared to the United States whose agricultural tariffs average less than 12 percent.
But France, whose farmers also receive the largest share of the EU's agricultural subsidies, has steadfastly refused to support the level of cuts other agricultural producing nations obviously are expecting.
The Group of 20, a bloc of developing countries led by Brazil, has urged both the European Union and the United States to make larger reductions in spending on price support programs than the French government has been willing to make.
Portman said he was encouraged by new proposals offered by the Group of 20 and by Australia on the percentage of products to be designated as “sensitive” or excluded from any tariff reduction formula that might be adopted by the WTO.
“I think both proposals — the G20 called for a 1 percent exclusion for developed countries and 1.5 percent for developing countries — were very constructive,” he said. “But again, my colleagues in the EU have nothing to offer. And what is more disconcerting to us probably was the time crunch we face.”
Both Portman and Agriculture Secretary Mike Johanns, who also was in Geneva for the WTO meeting, criticized the EU for the lack of progress and reminded reporters the Doha Round negotiators have little time left to put together a draft agreement for the Hong Kong ministerial in mid-December.
“I believe time is too short for us to have wasted weeks, and I believe that unless we see progress soon, it will be very difficult to envision a successful Hong Kong meeting and a successful completion of the Doha Round at the end of 2006,” said Portman.