US takes control at trade talks by rebuffing EU’s farm goods offer

THE United States yesterday rebuffed a move by the European Union to regain the initiative in a battle over global trade talks, saying an improved EU farm goods offer was still too small.

Susan Schwab, who is expected to be confirmed as US Trade Representative this week, said in a speech to trade ministers in Paris that World Trade Organisation (WTO) countries had to be bold with their proposals for securing a new trade round.

“The challenge of leadership within the global trading system is not met by incremental steps such as sweeteners to proposals that fall far short, nor by resisting tariff cuts in the name of preserving trade preferences,” Ms Schwab said.

She did not mention the EU by name but her comments come shortly after the 25-nation bloc said it could improve on its existing offer for agricultural trade.

The EU said last week it could move closer to the demands of developing countries — which want the EU to cut its farm tariffs by an average of 54% — on condition other WTO members also make concessions.

The EU’s current offer works out at an average cut of about 39%.

The United States is seeking tariff cuts of 66% by the EU and a big reduction in the number of goods the EU would class as sensitive products to shield them from the full impact of the tariff cuts.

On Tuesday, Australian Trade Minister Mark Vaile, usually one of Brussels stiffest critics, welcomed the signs that it would go further with its farm offer, saying the United States and developing countries had to show flexibility too.

New Zealand Trade Minister Phil Goff on Wednesday also welcomed the move by Brussels but said the EU along with the United States and poor countries still had to do more to bring off a global deal.

The WTO’s Doha round was launched in 2001 as a way to help developing countries and boost the global economy.

But it has missed deadlines and now risks being shelved possibly for several years if member countries cannot strike a deal in July.

In another sign of the complexity of the talks, Egyptian Trade Minister Rachid Mohamed Rachid said poor countries were concerned their priorities were being ignored as the EU, United States and big developing nations like Brazil battled it out.

He said there was still a risk that poor countries could yet abandon the negotiations, as they did at a stormy WTO meeting in Cancun, Mexico, in 2003, that set the Doha round back.

“I think every country will be prepared to walk away if they feel the amount of pain is much larger than the amount of gain,” Rachid said, adding he did not favour abandoning the talks.

But Pakistan Trade Minister Humayun Akhtar Khan told reporters poor countries would lose the concessions they have won so far if they walked out.