U.S. – Australia Relations

U.S. Still Flexible on Agriculture Trade Proposal, Official Says

Washington, D.C. — 22 September 2006

Cabinet members attend Australia meeting aimed at reviving WTO negotiations

By Bruce Odessey
Washington File Staff Writer

Washington -- The United States continues to offer flexibility in modifying its agricultural trade proposal to revive suspended World Trade Organization (WTO) negotiations, U.S. Trade Representative Susan Schwab says.

In September 21 remarks at a meeting of officials in Cairns, Australia, Schwab and U.S. Agriculture Secretary Mike Johanns welcomed an Australian proposal aimed at breaking the long-standing impasse over agriculture but neither endorsed nor rejected it.

The meeting, marking the 20th anniversary of the Cairns Group of agriculture-exporting countries, an influential bloc in the WTO negotiations, comes nearly a year after the United States submitted a proposal for sharp reductions in U.S. domestic support payments to its farmers and in agricultural tariffs in return for sharp tariff reductions by other markets, notably the European Union (EU).

That U.S. proposal from October 2005 failed to break the impasse; the long-stalled negotiations, launched in 2001 and formally called the Doha Development Agenda, collapsed in July.

"We've ... indicated that our proposal is negotiable, that we are even prepared to do more in terms of cutting domestic support than we have on the table if and when there is significantly more [non-U.S.] market access on the table in agriculture," Schwab said.

The Australian proposal would require the United States to cut its domestic support payments by an additional $5 billion and the EU to reduce its agricultural tariffs by an additional 5 percent.

"We think this would be very, very difficult," Johanns said, neither endorsing nor rejecting the proposal but applauding Australia for attempting to break the impasse. "The reaction of the EU was 'no.' You don't get to yes by saying no."

The leader of one large U.S. farmers' group, the American Farm Bureau, did reject the Australian proposal, arguing that even with a proposed further 5 percent tariff cut, the EU could use exemptions to avoid opening its market to U.S. imports.

The Cairns Group comprises Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

At the September 22 conclusion of the three-day meeting, the Cairns Group issued a communiqué urging the United States, EU and other wealthy countries to propose the tariff and subsidy cuts needed to restart the Doha round as soon as possible.

DEVELOPING COUNTRIES ALSO SHOULD OPEN MARKETS

In her briefing a day earlier, Schwab said not only wealthy countries, but also developing countries have to open their markets.

"There are some developing countries ... that still have not come to grips with the importance of opening up their markets, unilaterally quite frankly in the context of these negotiations," she said.

Johanns said a WTO breakthrough is needed to persuade the U.S. Congress to extend the president's negotiating powers, called trade promotion authority (TPA), which expires July 2007. Under TPA, Congress restricts itself only to approve or reject a negotiated trade agreement, within strict time limits and without amendments. Without TPA, other countries generally are unwilling to negotiate trade with the United States.

"It is clearly going to be difficult to extend Trade Promotion Authority," Johanns said. "It is not impossible."

A transcript of Schwab's and Johanns' remarks is available on the USTR Web site.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Original document from usinfo.state.gov.

Last update: Monday, 19 November 2007 GMT+1000