US, EU agriculture trade plan disappoints Sutton

By BRIAN FALLOW

An outline agreement between the European Union and United States on agricultural trade has been greeted with disappointment and concern by Trade Negotiations Minister Jim Sutton.

With the World Trade Organisation's Doha Round stalled for want of progress on farm trade, the EU and US have been under pressure to string at least a rope bridge across the divide between their positions ahead of the ministerial conference in Cancun, Mexico, next month that marks the half-way point of the round.

In the three key areas of export subsidies, tariffs and domestic support the Euro-American deal sketches a framework for how to carry the negotiations forward but leaves the detail, and in particular the extent and timing of the commitments, to be negotiated.

"Without the insertion of some big new numbers this paper could prove to be a recipe for allowing subsidy-bloated European and American farm sectors to ride roughshod over efficient unsubsidised producers for another generation," Sutton said.

The paper provides for the elimination of export subsidies on a yet-to-be-agreed list of products of interest to developing countries.

For other commodities the only commitment would be to reduce export subsidisation.

"It doesn't live up to the clear agreement at Doha [when the current round of trade talks was launched] that export subsidies are to be phased out," Sutton said.

"That is not acceptable. The only thing up for discussion could be the date."

On market access the paper proposes a compromise formula that blends steeper cuts on higher tariffs with a more modest reduction formula used in the Uruguay Round. But special treatment is envisaged for "sensitive" products.

"They have set out an approach that could let them shield the most politically sensitive products like dairy products, meat, sugar and rice, from reform. To carve out dairy and meat would carve out the heart of the New Zealand economy," Sutton said.

European trade commissioner Pascal Lamy said the paper provided a solid and sustainable basis upon which to complete the agricultural negotiations which were the cornerstone of the Doha Round.

US negotiator Allen Johns called it a major breakthrough. "But we don't pretend it will solve all the issues in this negotiation."

Brazil's ambassador to the WTO, Luiz Felipe de Seixas Correa, said that on export subsidies it was not faithful to the mandate.