EU warns US not to extend farm bill
The European Union said that any move by the
US Congress to extend legislation providing hefty subsidies to farmers would
have "serious fallout".
Talks on reform of agricultural tariffs and subsidies are in trouble since
countries mist the deadline in April and pressure on the US government is
growing to prolong the current farm bill until new global rules on trade have
European Commission spokesman Peter Power said such a move
would send the wrong signals to other trade powers, because the whole point of
the trade negotiations is to reduce and discipline farm subsidies and not renew
and roll them over.
Power said that "Any such move would have serious
fallout in developing countries, but also in Europe where our reforms are being
implemented and have started to bite."
The 2002 farm bill boosted US
crop and dairy subsidies by 67% to about $20-billion a year. Parts of it have
been challenged at the World Trade Organisation by other countries on the
grounds the payments unfairly distort trade.
Outgoing US trade chief Rob
Portman has pledged to cut the US WTO allowance for trade-distorting domestic
farm subsidies by 60% if other countries throw open their agricultural markets
and cut tariffs by 55% to 90%.
The EU says US proposals are
unrealistic, adding the bloc already drastically reformed the way its farmers
receive payments. Developing countries say the obligation is on rich nations
like the United States and EU bloc to make the first move to open their farm
The perceived lack of response from other WTO member
countries to the US offer
has irritated many in Congress and some US politicians are growing uneasy
about refurbishing farm policy in 2007, when the current law will expire,
without assurances other nations will cut their subsidies.
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