US Proposes Major Agricultural Tariff Reductions

by Mike Godfrey, Tax-News.com, New York

29 July 2002

Robert Zoellick, US Trade Representative, says that the US will today present its package of proposed agricultural reforms to the WTO in Geneva. Writing in the Financial Times, Mr Zoellick says that the US will propose to scrap all export subsidies over five years, and will call for average permitted tariffs to be cut from the current 62% to 15% over the same period.

'The US is willing to tackle its own trade-distorting policies provided others agree to do the same,' says Mr Zoellick. Some may consider the US stance hypocritical, coming so soon after President Bush signed a major agricultural subsidy bill into law, but Mr Zoellick quotes the OECED as saying that the US farm bill 'does not increase the level of support overall in any significant way compared to what it was in most recent years . . . and remains significantly below the levels of farm support granted by the European Union.

Indeed it is the EU, headed by the French, which is likely to put up the strongest resistance to any fundamental reform of global agricultural subsidy regimes. The package recently proposed by Agriculture Commissioner Frank Fischler is already very feeble, even before the French attack it. But Mr Zoellick has kind words even for the EU: 'Even though the Commission's proposal does not cut spending and does not address market access or export subsidies, it does seek to move Europe away from trade-distorting subsidies.'

'Make no mistake,' ends Mr Zoellick, 'The US is committed to lead global agricultural reform. We challenge our trading partners to join us.'

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