Posted August 15, 2005, Scott Miller for the Wall Street Journal via
Cropchoice: In global trade talks that have
largely centered on the conflicting interests of rich
and poor nations, a dispute between the U.S. and Europe
over farming is throwing negotiations dangerously off
The showdown, being played out in Geneva this week
and likely into the autumn, could help determine whether
the so-called Doha Round talks will make a leap toward
their scheduled conclusion next year, or risk collapsing.
On the surface, Europe and the U.S. would seem to have
little about which to fight. Political leaders in Europe
and the U.S. agree that farm trade must be made fairer
for developing countries and that barriers must be reduced.
But the two are unable to agree on how to get there,
each unwilling to make concessions on issues such as
tariffs and subsidies until the other moves first.
Washington's chief agriculture negotiator, Allen Johnson,
said in an interview that without more European Union
action such as cutting tariffs and subsidies, "It's
hard to see how others, including the U.S., can push
their own reform."
EU officials use similar language, saying that they
believe their own proposals take them "off the
hook" and that the ball is now in the U.S.'s court.
Agriculture long has been the linchpin of the current
round of talks, which also includes many thorny issues
on opening trade in services and manufactured goods.
According to a World Bank study last month, almost two-thirds
of the economic gains that would come from dismantling
all merchandise trade barriers would come from agriculture.
Poor nations, many of which rely on farming, are reluctant
to make concessions in areas important to the U.S. and
the EU until they are convinced the richer players are
making farm concessions first.
"The only people who can really break the standstill
are the U.S. and the EU," said Amy Barry, trade
specialist at aid group Oxfam International.
Talks this week were supposed to produce an initial
blueprint of a final Doha package. Ministers from the
148 member nations of the World Trade Organization were
then to fill in the details at a meeting in Hong Kong
in December. The risk is that much of the preparatory
work for the Hong Kong meeting will be left undone,
raising the prospect that the meeting could go nowhere
and cutting the chances of completing trade talks by
late next year.
One reason negotiators want to finish Doha is that
in 2007, the U.S. president's power to put trade deals
on a fast track is set to expire. Negotiators worry
that Congress then will have vastly increased powers
to block U.S. approval.
Europe maintains it has taken steps toward compromise
that the U.S. hasn't matched, agreeing in China earlier
this month to begin work on a new tariff-cutting formula
that appears to make the most reductions in tariffs
on products with the highest levies, but about which
it has provided few details. "We are now off the
hook and I hope that there will be a similar contribution
from the U.S.," said Europe's agriculture commissioner,
Mariann Fischer Boel.
The EU would like the U.S. to further limit domestic
subsidies, focusing especially on countercyclical payments
made to farmers when prices fall. Such payments swing
widely but can be large. In 2003, they amounted to $655
million. But they jumped to $5.65 billion in 2004. The
U.S. has offered to limit such subsidies but only if
the EU promises to follow suit.
Europe also is eager to see the U.S. overhaul its food-aid
program, which, in EU eyes, amounts to a production
subsidy. Under the U.S. program, the government buys
food such as corn from its farmers and donates it to
poor countries. Europe wants the U.S. to consider policies
such as providing poor nations with money to buy food
closer to home, helping regional trade. The U.S. says
that as it provides 60% of the world's food aid, it
would be foolish to end the program.
The U.S. wants Europe to cut tariffs on farm products.
Europe charges major trading partners average agriculture
tariffs of 25%. The U.S. figure is 15%. The EU says
it is willing to negotiate such reductions. [ July 27,