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Texas Agriculture Archive

February 7, 2003

U.S./EU differ on
scope of WTO reform

While the United States is seeking major reform in international trade rules in the current World Trade Organization negotiations, the European Union is seeking a more incremental approach, according to trade officials who spoke at the "Ag Trade and Your Future" conference at the American Farm Bureau Federation convention.

Allen Johnson, the Office of U.S. Trade Representative's chief agricultural negotiator, said, the United States has a very "ambitious" proposal.

"We're willing to cut if everyone goes along," Johnson said. "But we're not going to unilaterally disarm."

But Gerald Kiely, a longtime EU agricultural official who is now a counselor with the European Commission delegation in Washington, D.C., said the trade bloc has made considerable progress in the last 10 years in cutting back on trade-distorting subsidies and practices.

Because the EU is expanding to include Eastern European countries in 2004, there is less money available to pay farmers, Kiely noted.

Differences noted

Kiely said the EU wants an agreement, but one that builds on the Uruguay Round framework and not the one proposed by the United States last summer. The EU, he said, hopes to officially submit its proposal in time for WTO negotiations in Geneva this week.

Both Kiely and Johnson acknowledged that in the eyes of the rest of the world, there isn't much difference between the EU and the United States. Both are considered trade transgressors who over-subsidize and make life difficult for the 140-plus WTO members who don't pay their farmers anything.

Kiely explained that the EU has little political support for widescale trade reform. In addition to farmers who demonstrate frequently, the bloc faces considerable opposition from environmentalists, animal welfare advocates and consumer groups.

"The animal welfare lobby is probably even stronger than the agricultural lobby," Kiely said. Any agreement has to be "politically acceptable," he added.

Johnson said the United States won't "stand still" during the drawn-out WTO process. It is going ahead with several regional and bilateral trade agreements, such as the recently completed one with Chile, and proposed accords with Australia and Central American nations.

Those agreements, however, cannot address the key issue of reforming all nations' domestic supports, Johnson said. That can only be done, he stressed, in the WTO talks.

Paul Drazek, a Washington, D.C.-based trade consultant, also spoke at the conference, outlining the major issues raised by the U.S. WTO agriculture proposal and the EU's known position.

U.S. proposal reduces tariffs

He said the U.S. proposal to increase market access would "dramatically reduce disparities" in tariffs worldwide. While the world average tariff for agricultural products is 62 percent, the U.S. only imposes tariffs that average 12 percent.

Drazek noted that some developing countries with growing markets, such as India, have stiffer tariffs. If the tariffs aren't lowered, he said, they will continue to hurt U.S. exports. India, for example, has an average tariff of 114 percent on farm imports.

Developing countries will play a key role in the new round of trade negotiations, Drazek said, explaining they are "reluctant to open markets to subsidized products" from the United States and Europe without getting "safeguards" that will protect their interests.