U.S. and European officials on Tuesday praised a compromise proposal by poorer countries that would gradually diminish agricultural subsidies worldwide, lending momentum to a round of trade negotiations that has long been vexed by the issue of support for farmers.
The proposal was floated on the first day of a two-day meeting of trade officials from 30 countries in the northeastern Chinese city of Dalian. They have convened to seek consensus on reducing protection for farmers ahead of a high-level World Trade Organization conference set for Hong Kong at the end of this year -- part of the so-called Doha round of trade negotiations.
"I'm very encouraged by the attitude of the ministers," said U.S. Trade Representative Rob Portman, who attended the talks. "There does seem to be a sense of urgency and a continued high level of ambition."
The Doha round, which aims to lower tariffs around the world to boost trade, has long stumbled over the degree to which governments should have the right to protect farmers against lower-cost imports. The same issue has proved politically combustible in many venues: In Europe, where leaders remain deadlocked over a budget for the European Union, accusations fly over the fairness of the billions of dollars in subsidies still lavished upon French farmers. African, Asian and Latin American governments argue that $279 billion worth of agricultural aid bestowed by the world's 30 wealthiest countries keeps farmers in the rest of the world in poverty by forcing them to compete unfairly against subsidized products.
The proposal offered Tuesday was an attempt to chart a center path through this terrain, adding to a compromise achieved in principle among WTO ministers in May. The plan was offered by the so-called Group of 20, a bloc of mostly poor countries focused on shipping more fruits, vegetables and grains to Europe. Under their approach, the countries of the world would be divided into five bands, with each band assigned a different level of acceptable protection for farm goods.
The proposal would mandate across-the-board, uniform rates of reduction for all products in every band. The United States has long advocated applying the sharpest tariff reductions to those goods that now enjoy the highest rates of tariff protection. President Bush recently called for all farm subsidies to be eliminated by the end of the decade, putting him at odds with European leaders who favor a more gradual approach. But Portman said the United States considered the proposal a good basis for discussion.
"We have a framework," he said, according to the Associated Press.
European Union Agriculture Commissioner Mariann Fischer Boel called the proposal a "good basis for further work." Fisher Boel said the E.U. favors setting only three bands and allowing individual governments greater options in determining how much they may subsidize farmers and for how long.
China, one of the leading nations in the Group of 20, has long taken a cautious approach to the issue. China may have the most to gain from reducing tariffs in any trade agreement because its exports are soaring. But China's 900 million farmers are struggling to absorb the changes brought on by the country's transition from communism to the free market, with incomes sliding in many rural areas and protests on the rise -- a growing concern for the government.
As it hosted Tuesday's meeting, China lent its voice to those calling for a swifter reduction of farm tariffs: Chinese Commerce Minister Bo Xilai called for an elimination of farm subsidies by 2010.
"If we can make even small progress, I think it would be a contribution," Bo said.
Despite the optimism, WTO Director-General Supachai Panitchpakdi, who is set to relinquish his post in September, said those in attendance had failed to agree on the concrete terms of a deal, raising doubt whether a consensus could be reached in time for the December meeting.