Australia: ‘US farm bill setback for Doha talks’

‘US farm bill setback for Doha talks’

CANBERRA: The US farm bill going through Congress is a setback to efforts to reach a new world trade deal, Australia’s trade minister said on Wednesday.
Trade Minister Warren Truss also said that steep differences between developing and developed countries about the size of cuts in industrial tariffs underlined the difficulty of reaching an agreement.
“The US farm bill in my view was a setback,” he told Reuters in an interview. “The proposals currently in the Congress entrench subsidies at very high levels and that sends the wrong sort of signals to the rest of the world about the US willingness to make concessions.”
The trade negotiations were launched in 2001 after the Sept. 11 attacks on the United States to give a boost to the world economy through increased opportunities for trade, and to help developing countries grow out of poverty.
The talks, known as the Doha round, are due to resume at the World Trade Organization (WTO) in Geneva in September, on the basis of proposals on trade in farm and industrial goods drawn up by diplomats after a series of setbacks.
Australia, a major exporter of food and natural resources, supports greater trade liberalisation. Truss said the US farm bill, setting spending and support for American farmers for five years, was a long way from what is in the agriculture proposals. Officials in the administration of President George W. Bush say that the bill would raise farm support to levels that distort trade and could prompt complaints from US trade partners at the WTO. They have threatened to veto it.
The complex WTO trade talks have frequently broken down, and were suspended last year, but Truss said an agreement was still possible by the end of this year if negotiators work hard in Geneva after the European summer break.
But the reaction of some developing countries to the proposals on industrial trade had made it harder to reach a deal in which a key element involves rich countries opening their markets more to farm goods in return for greater access to developing country markets for industrial manufactures, he said.
The industry trade proposals would require developed countries to cut their import tariffs to a maximum of 8 or 9 percent, while the ceiling for developing countries would fall to 19-23 percent. Truss said the difference between these two levels was already more than most developed countries could accept, but developing countries such as Brazil and India wanted more.
Truss said developing countries could boost their economies and create jobs by opening up to more trade.
“What we can do through opening up markets and encouraging developing countries to have a market-oriented economy will do far more for their GDP than all the aid programmes that the developed world provides,” he said.
Australia is concerned that the latest agriculture proposals give some leeway to aid schemes that distort trade by linking aid to purchases. He said the US was seeking concessions in this area even though they had been banned in previous talks in Hong Kong in December 2005.
He said it was not enough for the US and European countries to sign up to big cuts in farm subsidies and tariffs if they created “a second wall of defence” by rewriting rules on farm support and by exempting sensitive goods from a deal. reuters