EU and US seal farm trade deal Mark Tran Wednesday August 13, 2003 The Guardian
The EU and the US today agreed on a joint plan for agricultural trade reform designed to boost the chances of success at global trade talks next month. The plan, to be put to the full World Trade Organisation (WTO) membership later today, came as negotiators tried to make headway before the crucial ministerial meeting next month in Mexico. The proposal, which still needs approval from EU member states, was concluded late yesterday negotiators after several weeks of intensive talks. "There is an agreement in principle," said the EU ambassador to the WTO, Carlo Trojan. Few details of the accord were immediately available, but diplomats said it covered the three key areas of agricultural trade - domestic support, export subsidies and market access. The two main sticking points had been export subsidies and market access. The EU felt it was unjustly targeted for providing export refunds to its farmers while US export credits were off the negotiating table. On market access, the EU wanted smaller cuts on import tariffs than the US. Today's deal between the world's two largest providers of farm subsidies followed what the EU described as landmark reform of its common agricultural policy (CAP) in June. In that package, the EU agreed to break the link between subsidies and farm output and so reduce the surplus produce Europe dumps in poor countries, where the practice bankrupts local farmers. Trade ministers from the developing world have already dismissed the CAP reform as a fudge because it leaves the worst excesses of the Û40bn (£28bn) programme untouched. Nevertheless, it paved the way for today's deal. Agriculture is one of the stickiest issues for the WTO, with the EU and a handful of other countries with strong agricultural lobbies pitted against the US, Canada, New Zealand and Australia, as well as developing countries. The latter argue that farm subsidies paid by rich states - running to over $300bn (£186.5bn) a year - prevent them from competing on equal terms in international markets. Despite giving heavy financial support to its own farmers, the US had allied itself with major agricultural exporters such as Argentina, Brazil and other members of the Cairns group in calling for the sharp cuts in tariffs and an end to export subsidies. The EU and individual WTO members such as Japan, South Korea, Switzerland and Norway have demanded a more gradual approach. An EU official admitted that today's compromise might not satisfy the Cairns group. ActionAid, an international development agency, argues that rich countries must agree to slash their subsidies, while allowing poor countries flexibility to develop policies to support small-scale farmers. With only weeks to go before the Cancun meeting, WTO negotiators face an enormous task in bridging differences on thorny issues such as agriculture, access to cheap medicines and investment. WTO members were supposed to have reached a common position on agriculture back in March, and the overall talks that began nearly two years ago in Doha are supposed to be wrapped up by the end of 2004.
