Bush, Trade Ministers: Progress on Farm Trade

Bush, Trade Ministers Press for Progress on Farm Trade

U.S. willing to eliminate all barriers to all trade if others do, Bush says

By Bruce Odessey
Washington File Staff Writer

Washington -- As President Bush was challenging United Nations members to eliminate all tariffs, subsidies and other barriers to all trade, U.S. and European Union (EU) trade ministers were trying to make progress on agricultural issues in long-stalled World Trade Organization (WTO) negotiations.

In a September 14 address at U.N. headquarters in New York, Bush said the WTO negotiations, formally called the Doha Development Agenda, could lift millions of people around the world out of poverty.

"Today, I reiterate the challenge I have made before: We must work together in the Doha negotiations to eliminate agricultural subsidies that distort trade and stunt development, and to eliminate tariffs and other barriers to open markets for farmers around the world," Bush said.

The president went further, asserting that his administration would accept elimination of all barriers to all trade, agricultural and nonagricultural, if other countries did so.

"The United States is ready to eliminate all tariffs, subsidies and other barriers to free flow of goods and services as other nations do the same," Bush said.

In Washington, meanwhile, U.S. Trade Representative Rob Portman and EU Trade Commissioner Peter Mandelson completed September 13-14 meetings that aimed to find some common ground on the sensitive agricultural issues that have stalled the Doha round almost since it was launched in 2001.

"Our talks today were frank, constructive and embraced the spirit of President Bush's challenge," Portman said at a press conference afterward. "We agreed to remain personally engaged and provide the necessary leadership in moving the talks forward.

"These negotiations require us to do our part, but we can't do it alone," he said. "We will continue our intensive outreach and consultation with other nations."

Pascal Lamy, the new WTO director-general, has been trying to revive the negotiations ahead of a crucial December trade ministers' meeting in Hong Kong with the aim of concluding them in 2006.

After the 2003 collapse of WTO negotiations at a meeting in Cancun, Mexico, trade ministers managed in July 2004 to achieve a framework agreement for pursuing the agriculture negotiations. Since then, progress on agriculture and most other issues has stalled again.

That framework agreement would require elimination of export subsidies by a certain date and reductions of domestic support, both to be worked out in negotiations.

The framework achieved even less precise language on the third major agricultural issue, the crucial one for the United States: market access. At a July 2005 meeting in Dalian, China, the G-20 group of developing countries proposed a formula for reducing tariffs that other key countries have agreed to use as a starting point.

Other WTO members have pressed the U.S. and EU trade ministers to resolve their differences over agriculture first before broadening the discussion to others.

Portman and Mandelson reiterated at their press conference that the G-20 proposal was acceptable as a basis for discussion. Although they indicated disagreement with several of its points, they did not elaborate.

The G-20 proposal would classify developed-country tariffs in five tiers and developing-country tariffs in four tiers in such a way that developing countries would have to reduce their tariffs by much less than developed countries. It would mandate an average cut for each tier but allow lesser cuts for individual tariff lines. It would cap maximum tariff rates at 100 percent for developed countries and 150 percent for developing countries. All those ideas have provoked strong disagreements from other WTO members.

Any U.S.-EU proposal on agricultural tariffs, Mandelson said, "must deliver substantial additional market access."

The two ministers also indicated, again without elaboration, that they had narrowed their remaining differences over reducing domestic support; EU spending is much higher than that in the United States. A tricky situation for Portman is that Congress likely will be deliberating a multiyear farm bill including domestic support while the WTO negotiations are still going on in 2006.

Portman and Mandelson both asserted that any U.S.-EU agreement on agriculture is meant to contribute to WTO negotiations and not to impose on other members.

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