Page 1 of 1

#1 EU offers to cut farming tariffs

Posted: Fri Oct 28, 2005 1:02 pm
by frigidmagi
BBC
Europe has offered to cut the tariffs it charges on farm goods by up to 60%.
The European Commission said it was doubling its average cut to about 47%, as negotiators sought to prevent a new world trade deal collapsing.

EU Trade Commissioner Peter Mandelson had considered larger cuts ahead of a December summit, but France insisted he was exceeding his mandate.

However, Mr Mandelson told BBC Radio 4's World at One that the EU offer was "a very bold one... a serious one".

He added: "By any measure this is a very bold move indeed. It goes way beyond anything we've offered before."

The European Commission said its offer "must unlock immediate progress" on other areas, such as services and industrial products.

'Outer limit'

But despite Mr Mandelson's description of the offer as "Europe's bottom line" and the "outer limit" of what his mandate would allow, other negotiators were critical.

"From our early analysis, we are disappointed," said US Trade Representative Rob Portman in a statement.

"While in some ways it is a step in the right direction and we acknowledge the European Commission's efforts, much more needs to be done."

For example, the new proposals set aside 8% of goods as "sensitive", meaning they would still attract higher tariffs to protect EU production.

The US says this should be only 1% of farming goods.

Biggest offer

Friday's new proposal could still fall foul of internal rifts, since France has vowed to block further concessions.

French President Jacques Chirac said on Thursday that he could veto any further concessions, in the face of France's huge and powerful farming lobby.

Europe's farming subsidies have been blamed by other parties of being one of the main problems hampering the trade talks.

Until now, its standing offer to cut tariffs has been put by the US and other parties at about 25%.


France is holding out against further concessions

The new proposal is by far the biggest offer yet from the European Union, and offers to cut the steepest tariff rates by 60% - and to scrap subsidies as long as its trading partners do likewise.

But no timetable has yet been announced.

Doha round

The World Trade Organization (WTO) is currently trying to hammer out a new global trade deal before 2006.

The WTO hopes to have an agreement in place ahead of a key conference in Hong Kong in December, which is scheduled to rubber-stamp the final deal, and bring to an end the so-called Doha round of trade talks that first started in 2001.

WTO head Pascal Lamy last week called on both the US and EU to make concessions.

But while each side accepts that cutting farm subsidies and tariffs is vital in order to increase access for food exports from the developing world, both Washington and Brussels face pressure from their own agricultural sectors.
This actually a pretty damn good deal, provided we can get a solid agreement on what qualifies has a subsidy. For example the Euros like to scream that tax breaks and military/government contracts are subsidies whenever Air Bus and Boeing are brought up. I like most Americans tend to disagree, has for example military contracts are up for bids between different competiors. And tax breaks are depenent on you doing something to earn it, usually something expensive.

Course both of those things can be and are at times abused.