EU Makes Tentative Offer on Import Tariffs

The Associated Press
Wednesday, May 24, 2006; 3:36 PM

PARIS -- The United States faced mounting pressure to slash domestic farm subsidies after the EU said Wednesday it was willing to move toward developing countries' demands by making bigger cuts to its import tariffs.

The tentative offer by the European Union came at a Paris meeting of ministers and senior officials from key trade powers, less than a month before a crunch deadline in the Doha round of World Trade Organization talks, which has come to a near standstill over agriculture.

The EU had previously offered to cut tariffs on farm goods by an average 39 percent _ well short of both the 54 percent demanded by the G-20 group of developing countries and the 66 percent called for by the United States.

Top EU trade negotiator David O'Sullivan confirmed Wednesday in an interview with The Associated Press that Brussels has told trade partners it is now ready to go further.

"We would be willing to look at our offer and move towards, but not to, the G-20 position," said O'Sullivan, who reports directly to EU Trade Commissioner Peter Mandelson.

But he stressed the improvement of the EU's offer was conditional on new U.S. subsidy cuts and moves by developing countries to open their industrial goods markets.

Deputy U.S. Trade Representative Susan Schwab brushed off the EU move Wednesday, saying the Doha round's challenge "is not met by incremental steps, such as sweeteners to proposals that already fall far short." U.S. officials also complained that the EU gesture included no firm figures.

Negotiations are intensifying among the WTO's 149 members before a mid-June deadline for agreement on the guiding principles of a new treaty that the World Bank calculates would add $300 billion to global economic output.

Unless a blueprint is agreed upon before the summer, diplomats say, the five-year-old process may have to be put on ice until after U.S. presidential elections in 2008. President Bush's fast-track authority to strike trade deals expires next year.

There were some signs that Europe's move had eroded support for the U.S. position, even among countries that have pressed for increased access to EU markets for their farm produce.

Australia, usually one of the EU's harshest critics on agriculture, welcomed the initiative and rejected criticism that it contained no numbers. "It's a negotiation and that's reasonable," Trade Minister Mark Vaile told reporters.

"They expect on the other side of the equation to see more flexibility from the U.S. on domestic support in agriculture," Vaile said, as well as offers from richer developing states to reduce tariffs on industrial goods and services.

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