US farm subsidy concession revives mood in WTO talks

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GENEVA, Sept 20 (AFP): - Hopes of an agreement in six- year-old WTO talks on reducing global trade barriers appeared to have been revived yesterday after the US accepted to negotiate more stringent limits on subsidies to its farmers.
Diplomats at the World Trade Organisation said the US agricultural negotiator, Joseph Glauber, had announced during talks late Wednesday that the United States 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 to 16.2 billion dollars (9.2- 11.6 billion euros) a year on its agricultural subsidies.
Until now, Washington has refused to accept a ceiling below 23 billion dollars.
"I had never heard them say that before. It's not a small thing," said Crawford Falconer, the New Zealand ambassador chairing the farm negotiations.
The European Union, which has been calling for greater concessions from the United States on farming, on Thursday welcomed the shift.
"It's a positive move which we welcome," said the spokesman for EU Trade Commissioner Peter Mandelson, who represents the 27- country bloc in the WTO talks.
The spokesman, Peter Power, said in Brussels that it demonstrated a "US commitment to negotiate on the basis of the Geneva text and we urge all partners to do likewise."
"Unless the US is committed then there is no future," he added.
The Doha round of trade negotiations covering agriculture, industrial goods and services was launched in the Qatari 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 United States and the European Union.
Poor and emerging market countries have notably accused rich nations of distorting the global market for farm products with their state subsidies.
A senior EU official underlined 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.
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.