US concession revives mood in WTO talks

US concession revives mood in WTO talks

Geneva: Hopes of an agreement in the six-year-old World Trade Organization (WTO) talks on reducing global trade barriers appeared to have been revived on Thursday after the US accepted to negotiate more stringent limits on farm subsidies.

Diplomats at WTO said the US agricultural negotiator, Joseph Glauber, had announced during talks late on Wednesday that the US accepted WTO proposals on subsidy cuts made two months ago as a basis for negotiations.

It marked a shift in the US position on the compromise proposal suggesting a limit of $12.8-16.2 billion (nearly Rs51,072-64,638 crore) a year on its agricultural subsidies.

Until now, Washington has refused to accept a ceiling below $23 billion.

“I had never heard them say that before. It’s not a small thing," said Crawford Falconer, the New Zealand ambassador chairing the negotiations.

Falconer made the compromise proposals on farming before the summer break in a final negotiating drive for an outline agreement this year, alongside parallel proposals for cuts in import tariffs on industrial goods.

He is due to refine his proposals based on the stance of each of the 151 WTO members next month.

Observers said Washington’s concession would place more pressure on emerging and developing nations to accept the WTO’s compromise proposals on industrial products.

They would involve cuts in import duties in a range of 19% to 23% for 28 developing nations. India and Brazil have refused to go below 30% in order to protect their nascent industrial growth.

The European Union (EU), which has been calling for greater concessions from the US on farming, on Thursday welcomed the shift.

“It’s a positive move which we welcome," said EU trade commissioner Peter Mandelson, who represents the 27 country bloc in the talks.

The Doha round of trade negotiations, covering agriculture, industrial goods and services, was launched in the Qatar capital in 2001 in an attempt to increase trade flows largely for the benefit of poor countries.

However, the talks slumped into deadlock, missing a 2004 deadline amid squabbles between rich and poor countries, and disagreements between the world’s leading trade powers, the US and the EU.

Poor and emerging market countries have notably accused rich nations of distorting the global market for farm products with state subsidies.

A senior EU official underlined on Thursday that the wider economic climate was ripe for progress on the agriculture talks, which are believed to hold the key to unlock the rest of the negotiations

“On agriculture, the economic conditions have never been better to strike a deal, with world market prices booming," said the official, who declined to be named.

“For every country, a deal should be doable, but politically, things are more complicated," he added.