US Offers to Cut Farm Subsidies

The United States says it is ready to cut its trade-distorting farmsubsides to $15 billion a year in a bid to reach a global trade dealthat could help boost the world economy. The offer was made on thesecond day of a ministerial meeting aimed at wrapping up theseven-year-old negotiation to ease trade restrictions.  Lisa Schleinreports for VOA from World Trade Organization headquarters in Geneva.

U.S.Trade Representative Susan Schwab says the proposal reflects a promisemade by Washington to play a leading role in getting a trade deal done. 

The U.S currently has a ceiling of just over $48 billionon agricultural subsidies. But, actual support payments tofarmers came to about $7 billion last year because soaringfood prices meant they needed less help.  

Schwab says theproposed $15 billion ceiling is $2 billion below what theUnited States promised a year ago. She says this offer is being madeto move the negotiations forward and to conclude the talks.  

"Thisis a major move taken in good faith with the expectation that otherswill reciprocate and step forward with improved offers in marketaccess," she said. "These cuts will deliver effective and significantreductions in trade distorting domestic farm support."  

Thetalks, called the Doha Development Round, aim to make trade fairer forpoor countries. The United States and European Union have been underpressure to reduce their agricultural subsidies and to cut tariffs.  

Developingcountries say trade-distorting subsidies give the wealthy countries anunfair advantage, making it difficult for them to compete in the openmarket.  

Wealthy countries say they are willing to cut theirfarm supports, but in return the poorer countries have to providegreater market access to their manufactured goods and services.  

Schwabsays the new cuts proposed by Washington would require adjustments todomestic farm programs. But, the U.S. is prepared to make thosechanges.

"But, we also need assurances that if our programs aregoing to meet these disciplines, they are then not going to be subjectto legal challenges that reduce them further," said Schwab. "Now, letme say again. These reductions are not offered in isolation. Theymust be accompanied by significant market access, market opening inagriculture and in NAMA."  

NAMA or Non-Agricultural Market Access Negotiation deals with a wide-range of manufactured and industrial goods.  

Reactionto the U.S. proposal so far has been mixed. The European Union callsit a reasonable offer, but suggests it could go further. A Braziliandelegate says it is a nice try, but still too high.