US and EU spar over farm exports

HONG KONG - The United States urged a global trade meeting today to fix a date for ending farm export subsidies, mainly used by Europe, but Brussels stuck to its guns that Washington should reform its food aid first.

The two economic superpowers are sparring at the World Trade Organisation's 6th ministerial conference where states are battling to make progress in the Doha round of free trade talks, of which agriculture is a crucial part.

"We should set a date for the agreement we have already made to eliminate all forms of export subsidies," US Trade Representative Rob Portman said in a speech.

While not rejecting the call outright, top EU officials said far more needed to be done in other areas of so-called export competition, which also includes food aid and the activities of state trading companies.

"It would be a huge own goal if were were to focus on just one (form of export aid)," EU Trade Commissioner Peter Mandelson told a news conference. "It is the cumulative impact which it is our goal of eliminating," he added.

The EU says food aid subsidises US farmers by guaranteeing them a market for their crops. It wants all aid to be in cash, a call which has been echoed by aid organisations such as Oxfam.

But a senior US official accused Brussels of making "completely unrealistic" demands.

Washington, backed by some United Nations' aid organisations, says US food aid is vital to poor communities, particularly in sub-Saharan Africa, for whom cash assistance would be too slow.

"If the condition for them to move (on export subsidies) is something as radical as rewriting food aid rules (to) only use cash, that's completely unrealistic," the official told reporters, adding that there was no support for the EU's demand among other countries.

He said the debate over food aid should distinguish between the circumstances in which it is provided and noted there was little commercial displacement in emergency situations, where the US sends most of its food aid.

The US is the world's largest provider of food aid, supplying about half. The US programme provided a market for American farmers to sell US$1.1 billion -- or 3.72 million tonnes -- of their products in 2004.

US food aid chief Andrew Natsios blasted Europe's position, noting current global food aid contributions were "woefully short" of even emergency needs and endangered by the stance taken by EU trade leaders.

"It is unfortunate that people who have no experience at all in food aid and humanitarian relief are making decisions at this trade round," he told reporters, adding that Brussels had not involved food aid experts in the negotiations.

"We don't think these negotiations should be the place that life or death issues should be decided unless experts are at the table and they're not," he said.

Oxfam policy adviser Gawain Kripke said it was cynical of the United States to say it would only continue to supply food for hungry people by holding to an inefficient system.

"The US should agree to reasonable reforms of food aid and stop giving the EU an excuse to continue their export subsidies," he said.

Elsewhere in the negotiations on agriculture, the US said it was unlikely to discuss opening farm markets with developing countries this week and would instead continue to press the EU improve its offer on cutting import tariffs.

The EU's Mandelson said Canada needed to join the debate on ending export subsidies. Since agreeing in principal in July 2004 to eliminate export subsidies, he said Ottawa has showed no interest in negotiating over its state trading enterprises. Critics say their monopoly over exports amounts to a form of subsidy.

The trade talks in Hong Kong end on Sunday.

- REUTERS