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Trade envoys seek agriculture agreement, Oxfam calls for cut in U.S. farm subsidies

(Tuesday, Aug. 26, 2003 -- CropChoice news) -- The following two stories touch on agricultural trade and subsidies.

1. Trade envoys seek agriculture agreement

Naomi Koppel, Associated Press, 08/25/03: GENEVA - Still fighting over farm subsidies and import duties, members of the World Trade Organization (news - web sites) met Monday to search for signs of agreement on how to open international trade.

Diplomats met to comment on a compromise proposal published late Sunday by the Uruguayan ambassador to the WTO, Carlos Perez del Castillo, who chairs the body's General Council. The document is the proposed text of an agreement to be signed by trade ministers from all WTO member states when they meet in less than three weeks in Cancun, Mexico. The meeting is an important staging post in attempts to create a binding trade treaty by the end of next year.

"It's my best shot at proposals and now I am going to listen to the governments," Perez del Castillo said as he entered the meeting. However, he expected criticism from all sides.

"Of course we don't like it. Everyone is going to say that," said Australian Ambassador David Spencer. "When you look at the ambition we are seeking in agriculture, it just doesn't stand up."

"So far I can tell you that I like our proposal much better," said Brazilian (news - web sites) Ambassador Luis Felipe de Seixas Correa, adding "we want to have it on the table."

Although the compromise proposal offered late Sunday covers all the issues in the WTO negotiations, most of the interest has focussed on trade in agricultural goods, which is the major concern of most developing countries and some of the industrialized nations as well.

In his text, Perez del Castillo mostly accepted a joint offer by the European Union (news - web sites) and the United States to make cuts to their import tariffs. However the document contains no figures. Developing countries also must cut tariffs, according to the document.

In a change to his previous proposal, Perez del Castillo stops short of setting a deadline for the elimination of all farm subsidies aimed at export. The European Union has said it is prepared to reduce subsidies but cannot eliminate them completely. Major exporting countries like Brazil and Australia say export subsidies make EU goods artificially cheap.

Senior EU negotiator Peter Carl expressed reservations about the document.

"This is a draft that we are unhappy with and even in some cases very unhappy with in several important respects," Carl said. "It is therefore a text which is flawed, but it isn't fundamentally flawed. It is one that can still be repaired."

He said the proposal puts almost all the burden on a small number of countries starting with the 15-nation EU while developing countries would get away "scot-free."

But Indian Ambassador K.M. Chandrasekhar said import duties are the only protection his country has against subsidized products from rich nations.

"You want to preserve the incomes of your farmers so they can have a third car," he said, in reference to the European Union. "My farmer is eating one meal a day. You are saying that even that one meal he should eat once every two days."

Hidenori Murakami, director-general for international affairs in Japan's ministry of agriculture, said his country could not accept proposals to force countries to increase import quotas and set an upper limit on tariffs. Japan maintains tariffs of up to 490 percent on rice a sacred crop with cultural importance.

A senior U.S. official, who spoke on condition of anonymity, said, "We still have some important issues with the paper. We think it's important to get the issues framed properly."

WTO Director-General Supachai Panitchpakdi told the meeting that it was vital to find agreement.

"The world economy is in a difficult state. In just a couple of weeks' time, at Cancun, we will have a chance to make a difference," he said.

"The choice is clear either we continue to strengthen the multilateral trading system and the world economy, or we flounder and add to the prevailing uncertainties. At Cancun, the world will judge us on the choice we make and how well we have served them."

2. Oxfam says U.S. should slash farm subsidies

Reuters, 08/21/03 -- The United States has a moral duty to slash its farm subsidies even if developing countries do not reciprocate by opening their markets to more U.S. farm goods, officials with a leading private sector development group said.

The United States is under pressure in world trade talks to reduce the billions of dollars in subsidies it pays to farmers each year. Leading U.S. farm groups have vowed to fight such an agreement unless developing countries reduce their tariffs to allow in more agricultural imports.

Gawain Kripke, a senior policy advisor with Oxfam, said the United States had a greater responsibly to eliminate subsidies that depress prices for farmers in poor countries and make it harder for them to compete for export sales.

"It doesn't work to demand that developing countries roll over on their agricultural sectors in order for the U.S. to reduce its subsidies," said Kripke. "The U.S. is sinning --- and so is the E.U. (European Union) --- by subsidizing and dumping products on poor countries."

Also, in an era of $400 billion U.S. budget deficits, farm subsidies "may be a luxury we can't afford," he said.

U.S. farmers are expected to receive about $19 billion in government subsidies this year.

Phil Twyford, an advocacy director with Oxfam, said the group hoped a World Trade Organization meeting next month in Cancun, Mexico, would focus attention "on the incredible unfairness of international trade rules."

The group will give WTO Director Supachai Panitchpakdi a petition with three million signatures demanding fairer treatment for farmers in developing world, Twyford said.

John Audley, director of the trade equity and development project at the Carnegie Endowment for International Peace, said the United States has a closed market for many products important to developing countries.

If the United States wants international cooperation in other areas, it must cut its farm subsidies and open its market to more farm goods and textiles from poor countries, he said.