US and EU Seek Common Ground on Farm Trade

The US and the European Union will try in the next two weeks to achieve common ground on farm trade liberalisation in a last-ditch attempt to prevent deadlock on the issue scuppering the World Trade Organisation's ministerial meeting in Cancun, Mexico, in September.

The initiative was launched at an informal meeting of about 25 trade ministers in Montreal, at which participants said a huge effort would be needed to revive the stalled Doha world trade round. "There is a lot of work to do and not a lot of time left to do it," said Pierre Pettigrew, Canada's trade minister, who chaired the three-day talks.

Ministers said the talks had identified more clearly the problems to be resolved and that several governments had shown a willingness to adopt more flexible negotiating positions.

But they said the talks had made no breakthrough, and some doubted that the wide gaps between them on agriculture and many other issues could be bridged soon.

"I am turning more pessimistic, not more optimistic," said Joseph Deiss, Switzerland's economics minister.

Some developing countries were angry at the meeting's failure to make progress on agriculture. "We have got a major problem," Alec Erwin, South Africa's trade minister, said. "It has been very tough."

Although Pascal Lamy, EU trade commissioner, and Robert Zoellick, US trade representative, pledged to co-operate intensively on agriculture, each made it clear he expected the other side to make most of the concessions needed to narrow their differences.

The two sides aim to table by mid-August a joint paper that they hope will be endorsed by the rest of the WTO's 146 members as the basis for negotiations in Cancun.

The centrepiece of the US-EU talks will be an attempt to marry their two different approaches to cutting farm tariffs.

Washington wants high tariffs to be cut more steeply than low ones, while Brussels favours a less radical formula that would reduce all duties by the same percentage.

However, EU officials said they had little room to amend their formula, though they might be able to raise the levels at which tariffs were imposed on some agricultural products subject to import quotas.

The two sides are also far apart on farm subsidies. The EU believes recent reforms of its Common Agricultural Policy have given it the upper hand and is pressing the US to make good on its offers to cut spending on domestic farm support.

The EU offered for the first time to eliminate export subsidies on some "sensitive" farm products, though the US and other big agricultural exporters dismissed the proposal as inadequate.