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EU offers to cut farm tariffs 60%
published: Tuesday | July 22, 2008

The European Union said Monday it would be willing to slash farm tariffs by 60 per cent as part of a new global trade pact, the deepest cut it has ever offered.

EU Trade Commissioner Peter Mandelson told reporters at the World Trade Organisation that the offer was meant to kick-start a week of crunch-time talks on a new global commerce pact.

The 27-nation bloc has previously proposed to cut the tariffs by 54 per cent, but it was unclear what Mandelson's new figure fully entailed.

Some trade officials suggested the cut was only an EU recalculation of its old offer.

Negotiators are aiming for agreement on liberalising agriculture and manufacturing this week, so that the 153-member WTO can clinch a final deal to reduce tariffs and subsidies by the end of the year.

The talks have dragged out for seven years and many observers are sceptical an accord can be reached.

"We've decided to help the negotiations this week get off to a strong start by raising the average cut in our agricultural tariff," Mandelson said.

"That is a very considerable improvement on our own part, but of course it's light years away from any effort we've previously made in a trade round."

Improved offers

But, he added, the offer was not a gift. It depends on emerging economies such as Brazil, India and China responding with improved offers on lowering industrial tariffs to give European manufacturers more access to their markets.

Rich and poor countries have clashed repeatedly in the seven-year WTO talks known as the Doha round. Developing nations want agricultural subsidies in rich countries to come down so they can sell more of their produce, while the US, EU and others seek better access for their manufacturers and banks.

"If we don't all make the same sort of effort ... then we're not going to get through to the end as we need to do this week," Mandelson said.

While the EU's farm tariffs have been an issue of dispute - especially inside the bloc with countries sceptical of agricultural liberalisation like France and Ireland - it is not clear how much pressure Brussels had been under from its trading partners.

The US, Brazil and other powerful agricultural exporters have recently focused on securing better conditions for trade in beef, dairy, sugar and other products sensitive for European farmers that would be shielded from deep cuts.

It remains to be seen how effective the EU's offer will be in convincing developing countries to open up their manufacturing markets or the US to cut its farm subsidies, another main sticking point of the negotiation.

Mandelson said he had yet to see "any movement or any flexibility on industrial tariffs from the fast-growing economies."

"We need to see that," he added.

Earlier, the chief US negotiator said she was focusing on substance this week and not on talk that divides people, in her first public comments since Brazil's foreign minister on Saturday compared rich countries' deception in commerce talks to the tactics used by Nazi propaganda chief Joseph Goebbels.

- AP

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