EU And US Inch Closer On Farm Trade Talks

by Leroy Baker, Tax-News.com, New York

13 August 2003

The United States and the European Union appear to be edging closer to an initial agreement on agricultural tariffs and subsidies following meetings between the two blocs in Geneva this week.

"I think we are the lead countries in terms of trade. If we can move, it will have an impact on others," commented EU spokewoman Beate Gminder, though added a somewhat cautious proviso. "We're trying to find a common [position], though we don't know if we are able to. We are optimistic but realistic," reported the Washington Times. Agreement must be reached by all 146 WTO members on agricultural trade rules.

The EU and the US have long been deadlocked on the issues of tariffs and subsidies, and the US would like to see large scale reductions in both of these as a basis for an agreement.

At 12% tariffs on farm produce in the United States are far lower on average than in the EU where they average 30% according to analysis by the Agriculture Department. There is a similar gap in terms of subsidies where on average support equals about 18% of receipts in the US whereas it is 36% in Europe.

Trade Ministers from all WTO members are due to meet at Cancun, Mexico between September 10 and September 14 to agree a basic framework for future negotiations, a task which will probably be beyond them if the US and EU fail to come to terms on agricultural tariffs.

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