Agriculture issues divide U.S. and Europe

BRUSSELS, February 25, 2005, Paul Meller, NY Times via CropChoice: The United States and the European Union, the world's two biggest trading blocs, are disagreeing over agriculture positions adopted last year, casting doubt on progress made earlier.

In one spat, the United States has threatened sanctions on a range of European food exports, from cheeses to olives, in retaliation for Europe's decision in September to raise import tariffs on rice.

In an interview Thursday, Europe's new agriculture commissioner, Mariann Fischer Boel, said she hoped to avert sanctions and her office later announced that a deal had been reached. But the United States trade representative's office quickly denied that.

"Good efforts were made, but there are issues that still need to be resolved," said Richard Mills, a spokesman for the United States trade representative.

Sanctions, slated for March 1, would affect $33 million in imports from Europe. The United States, however, plans to ask the World Trade Organization, which is arbitrating the dispute, for an extension of the deadline.

Europe's position in the rice dispute does not bode well for efforts to reach agreement on agriculture in the Doha round of trade talks, Allen Johnson, the United States chief agriculture negotiator, said in a phone interview.

"It's not a good sign that Europe is going back on commitments it made in the Uruguay round," Mr. Johnson said, referring to talks concluded in the mid-1980's, in which Europe and the United States promised to reduce tariffs.

Two weeks ago, in another skirmish, the European Union started paying wheat producers export refunds to encourage them to sell their produce outside of the union after a bumper harvest last year.

American officials have criticized the new export refunds, which are designed to compensate farmers by paying them the difference between the price of wheat in Europe and the lower world price.

"I understand their concerns," Ms. Fischer Boel said, but insisted that under existing rules Europe had the right to impose that type of measure.

Last year, Europe offered to scrap all export assistance it pays its farmers, and the United States said it would reciprocate by scrapping export credits and no longer using food aid as a way of subsidizing its farmers. These promises were designed to resuscitate global trade talks, which had broken down at a meeting of the World Trade Organization in Cancún, Mexico, in 2003.

The move seemed to work. Progress in the global trade talks is fastest in agriculture, according to European trade officials, while progress on services and manufacturing is slower.

Ms. Fischer Boel and Mr. Johnson will be attending a small ministerial meeting of trade officials next weekend in Nairobi. Agriculture talks will focus on technical details, like how to compare tariffs imposed on 8,000 different farm products by the 148 members of the World Trade Organization.

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