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Brazil, India challenge US to lower subsidies to farmers

Brazil, India challenge US to lower subsidies to farmers
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First Published: Tue, Jun 12 2007. 12 56 PM IST
Updated: Tue, Jun 12 2007. 12 56 PM IST
Geneve: Brazil and India challenged the United States on 11 June to offer “real” cuts in the amount of subsidies paid out to American farmers or risk another setback in the World Trade Organization’s long-suffering round of global commerce talks.
The administration of US President George W. Bush, which has not budged on farm subsidies since an October 2005 offer to cap them at US$22 billion annually (16.5 billion euros), needs to go as far as halving that figure if it wishes to salvage a new global trade deal by the end of the year, the countries said.
“The US has to deliver,” Indian Trade Minister Kamal Nath told reporters after top officials from over 20 developing countries met at the WTO’s Geneva headquarters.
The talks known as the Doha round have struggled since their inception in Qatar’s capital largely because of wrangling between rich and poor countries over eliminating barriers to agricultural trade. Critics of the subsidies say they unfairly deflate international prices, making it impossible for poorer nations to develop their economies by selling their farm goods abroad.
Having already missed numerous deadlines, negotiators are currently aiming for a year-end date for wrapping up a trade treaty designed to add billions of dollars to the world economy and lift millions of people out of poverty. Brazil and India, which co-lead the WTO’s emerging economies bloc, meet next week with the US and the European Union in Potsdam, Germany, for talks that have been described as crucial for the six-year-old talks.
In a statement Monday, developing countries said a “low-teen” number for US farm subsidies, which they interpret to include levels as low as $10 billion (7.5 billion euros), would reflect a “commitment to real and effective cuts” and is the “only possible outcome.”
Brazil has proposed a limit of $12 billion (9 billion euros), Foreign Minister Celso Amorim said. Indian Trade Minister Kamal Nath said many of the countries at the meeting wanted US assurance that spending would not increase from a current estimated level of $11 billion (8.2 billion euros).
Gretchen Hamel, a spokeswoman for the Office of the US Trade Representative, said even the current US proposal was generous compared to the intransigence shown by leading developing countries.
“The question in the negotiations is not whether (we) should improve our October 2005 offer, but whether there is enough on the table from other countries to warrant us maintaining our current proposal,” she told The Associated Press in an e-mailed statement. “Neither in agricultural market access nor in (manufactured goods) have we seen such a level of ambition.”
The United States and the 27-nation EU have repeatedly said they will make no further concessions on agriculture as long as major emerging economies such as Brazil, China and India refuse to open up their markets to manufactured products, which comprise the vast majority of goods traded internationally.
But a new offer on industrial goods last week by Brazil, India and others underscored how little progress has been made in that negotiation over the last 12 months, repeating the same figures for tariff cuts that have been roundly rejected by the United States, the European Union, Japan and others since being offered last June.
Trade officials attending Monday’s meeting said Brazil and India were seeking to persuade fellow developing countries to give them more flexibility on industrial tariffs ahead of the Potsdam talks with the US and the EU. But Amorim and Nath both stressed that it was not for poorer nations to move first.
“The givers should not become the takers,” Nath said.
The WTO’s 150 members are seeking to clinch agreement on the framework of a deal by the end of July, so that enough time is set aside for the technical work needed to conclude a deal by December. Failure over the next seven weeks could set the whole process back until 2010, as subsidy and tariff concessions are generally seen as unlikely in 2008, when US elections will be held, and 2009, when Indian elections are scheduled.
Nath said he was “betting” on an agreement next week that would address agriculture, manufacturing and services topics such as highly sensitive restrictions on outsourcing and immigration by technicians, engineers and other trained professionals from poorer nations.
Both of those issues could run into trouble with a highly skeptical US Congress, which is demanding that a final treaty makes sense for Americans.
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First Published: Tue, Jun 12 2007. 12 56 PM IST
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