Top trade officials from the United States, European Union and 24 other countries began three days of talks yesterday aimed at finding enough common ground on agriculture subsidies and tariff reforms to save world trade negotiations from collapse.

The meeting is the first chance for the trade ministers to explore what impact European Union (EU) farm policy reforms could have on the World Trade Organization (WTO) talks, which have made little progress since they were launched 20 months ago in Doha, Qatar.

The countries need to agree on the broad outlines of an agricultural deal at the WTO's mid-session review in Cancun, Mexico this September to have any chance of finishing the negotiations by the target date of January 2005.

However, there are still wide differences in what trade negotiators call the "three pillars" of the agricultural talks - domestic supports, export subsidies and tariffs.

US Trade Representative Robert Zoellick and US Agriculture Secretary Ann Veneman met EU Farm Commissioner Franz Fischler on Sunday to hear firsthand what the EU thinks its reforms mean for the WTO negotiations.

Zoellick and EU Trade Commissioner Pascal Lamy continued those discussions in Montreal yesterday.

WTO Agriculture Committee Chairman Stuart Harbinson has proposed rich countries cut their most trade-distorting domestic subsidies - a category known as "amber box payments" - by 60 per cent over five years. He has also proposed a 50 per cent cut in "blue box payments," a category of less trade-distorting subsidies used primarily by the EU.

EU officials are optimistic they can meet both of those goals based on their recent reforms. But US farm groups say the Harbinson proposal is unfair.

Currently, the WTO allows the EU to spend more than US$60 billion annually in the "amber box" category, Japan about US$30 billion and the United States US$19 billion, reflecting historical differences in their farm support.

Under Harbinson's plan, the EU could spend about US$25 billion to US$28 billion annually in the "amber box" category and the United States only about US$8 billion or so.

Washington wants to eliminate that huge disparity and also is pressing for deeper agricultural tariff cuts than Harbinson has proposed.

 
(China Daily July 29, 2003)