/ 28 October 2005

New EU offer to cut agricultural tariffs

The European Union offered on Friday to reduce average agricultural tariffs by 47%, its steepest farm tariff cuts to date, in a proposal aimed at breaking a deadlock in world trade talks.

The EU said it will reduce the highest tariff rates by 60% and eliminate all subsidies for farm exports if trading partners make similar moves at a World Trade Organisation (WTO) meeting in December. The EU did not give a time frame for the cuts.

”The EU’s offer is substantial, offering new market access in agriculture and driving down trade-distorting farm subsidies,” EU trade commissioner Peter Mandelson said.

French reaction to the offer is key, after the nation warned on Thursday that it would veto any world trade deal that goes too far in making concessions on agriculture.

The 148-country WTO remains split on a new trade pact that aims to increase market access for poorer countries, boost the opening-up of services sectors and reduce farm subsidies.

Mandelson stressed that the offer to major trading partners the United States, Brazil, India and Australia is conditional on ”immediate movement in negotiations on trade in industrial goods and services”.

He said it stays within the negotiating mandate given to the EU head office by the 25 national governments.

The EU head office said US commitments on food aid and export credits do not go far enough and it wants to see ”real disciplines” on the most trade-distorting US farm payments.

Both Australia and New Zealand also need to do more to prove they are reforming state trading enterprises, it said. — Sapa-AP