By TOM WRIGHT International Herald Tribune
ZURICH, Oct. 10 - The European Union came under pressure today to make new concessions to open its agricultural markets after the United States offered to slash farm subsidies to restart global trade talks.
But it remained unclear whether the American offer would bring about concessions by the European Union and other members of the World Trade Organization, which are meeting here this week to work on an outline for negotiations on a global trade deal scheduled for December in Hong Kong.
The United States trade representative, Rob Portman, pledged to cut some farm subsidies by 60 percent over five years. He also called for an "ambitious" reduction of export tariffs on agriculture products - which is considered a key sticking point in global trade talks - of 55 percent to 90 percent. Such reductions would disproportionately hit European markets, which are protected by much larger tariffs than those imposed by the United States.
Mr. Portman said it was now up to "those that subsidize more than the U.S." - referring to Europe and Japan - to move now to open their protected farm markets to American agricultural products.
"We are offering real cuts to U.S. farmers in exchange for market access," Mr. Portman said. "And if we are not able to achieve the market access, they can not be supportive."
The European Union's trade commissioner, Peter Mandelson, called the American move a "constructive step" and said Brussels would be willing to cut agricultural subsidies by 70 percent, exceeding its previous offer to reduce them by 65 percent.
But the European Union did not signal that it would agree to cut contentious farm tariffs on agriculture exports to the levels that Washington wants to see. Mr. Portman is seeking a reduction in export tariffs of 55 percent to 90 percent over five years as a condition of cutting its farm subsidies.
Japan also said it would not accept the American proposal as a basis for further discussions. "The reductions demanded of the E.U. and Japan are out of balance" of those the United States is making, the Japanese agriculture minister, Mineichi Iwanaga, said.
Many trade experts questioned whether the E.U.'s executive arm - which has already angered some European government for a promise last year to completely phase out farm export subsidies - will be able to secure further commitments from its 25 member nations.
Brussels also faces resistance within its own ranks. A letter, signed by 13 European trade ministers, including France, Italy and Ireland, was sent last week to the European Union's agriculture commissioner, Mariann Fischer Boel, in which the ministers raised concerns that concessions by Brussels have not been matched by the American offer.
By moving now, the United States has "upped the ante," said Jean-Pierre Lehmann, a professor of international economics at the Swiss business school IMD. "But Mandelson is not in a position to match that ante."
Mr. Mandelson acknowledged some European governments are "concerned about imbalances," but he said the United States' new proposals could help assuage those fears by showing that Washington is also making concessions.
The United States had been under pressure for months to provide detail's the Bush administration's commitment to cut farm subsidies. Mr. Portman's proposal comes after weeks of closed-door meeting with members of Congress who were opposed to any deal unless American farmers, led by the politically strong corn and beef industries, get better market access to Europe's 500 million consumers.
Europe has agreed to end export subsidies, which dampen world prices and hurt developing nations, but it still has high tariffs on farm imports and domestic subsidies worth about $60 billion each year. The United States has relatively low tariffs and officially spends about $19 billion on subsidies, although trade experts say the real number could be much higher.
Trade talks begun in Doha, Qatar, in 2001 under the World Trade Organization were termed a "development round" meant to help lift the world's poor nations out of poverty by giving their farmers better access to developed world markets. But rich countries have not met these promises, advocacy groups like Oxfam International say.
Developing countries said the American proposal could give some momentum to the talks, which have been stalled for more than a year. "It's a positive step," Egypt's trade minister, Rachid Mohamed, said. "There's a willingness from the U.S. to get things moving."
Trade officials, including those from the U.S. and the European Union, will meet again on Tuesday and Wednesday at the World Trade Organization's headquarters in Geneva for further talks. Other than agriculture, discussions are likely to center on American and European demands for large developing countries like Brazil, China and India to open their markets to Western industrial goods and services.
Meanwhile, the United States and Europe said they would discuss in Geneva ways to solve a growing trade dispute over state support for Boeing and Airbus.
Mr. Portman reiterated today Washington's concern that a European pledge this month to postpone aid for the development of Airbus's A350 aircraft was not a meaningful concession. The United States, which is demanding that Europe eliminate the subsidies, does not want to get involved in a negotiation that is "unlikely to result in any meaningful success," Mr. Portman said.
For its part, Europe wants the United States to make a commitment to reduce indirect support that it contends that Boeing receives in the form of research contracts.
