The Financial Times reports that it just may happen: US and EU near agriculture trade deal (Eoin Callan and Alan Beattie, Jan 21). Lots of parties need to be brought on board:
The EU:
The deal that has been taking shape behind closed doors includes a proposal by Brussels to cut barriers to foreign agricultural products by an average of at least 54 per cent...
The US:
...a conditional offer by the US to lower the ceiling on its domestic farm subsidies to close to $17bn (€13.1bn, £8.6bn).
The previous U.S. offer, a cap at $22.5 billion (about a 50% cap decrease) was larger than the $19.7 billion actually spent in 2005. So this new proposal would actually limit U.S. subsidies.
The French:
Both sides are also aware that the provisional EU offer on tariff cuts could lapse under the strain of opposition from Paris, which has demanded that the farm talks in Doha be put on the agenda of the meeting of EU agriculture ministers next Monday.
The U.S. Congress (who will have to give the Bush Administration an extension of its Trade Promotion Authority):
The Bush administration has also met key figures on Capitol Hill who will shape policy on agriculture and trade under the new Democratic leadership of Congress. But it is likely to take weeks to establish whether Congress would consider renewing President George W. Bush’s trade promotion authority – which expires in six months and is needed to complete a deal.
These approaches included an appeal to Collin Peterson, the influential chairman of the agriculture committee in the House of Representatives, to tone down his opposition to the renewal of trade promotion authority.
The congressman said after the meeting that he remained deeply critical of US trade policy but was not determined to wreck a Doha deal that included meaningful benefits for US farmers.
Brazil and India:
Any agreement is also contingent on reciprocal concessions by Brazil and India on lowering barriers to trade in industrial goods and services – which are still under negotiation... Brazil has been negotiating separately with the US and EU and dispatched a senior diplomat to Delhi over the weekend to try to broker a common position
For quick background, take a look at Sandra Polaski's paper, Breaking the Doha Deadlock. Congress Could Play a Pivotal Role. (Carnegie Institute, January 2007). Polaski is Director of the Trade, Equity, and Development Project at the Carnegie Endowment for International Peace. She argues that a U.S. "maximalist" negotiating position in the early summer of 2006 was the key reason for the suspension of negotiations. The U.S. needs to accept lower limits on its agricultural subsidies, and give developing nations more scope for protecting weak agricultural sectors. This she says, and I agree, would be good domestic, foreign, agricultural, and trade, policy for the U.S.
For more background, I'd also suggest a post by Iana Dreyer on the new globalisation blog, Global Conditions: Doha Round - Just Do It (Jan 18). I learned about the Polaski paper from Dreyer. Dreyer also draws on stories from recent articles in the International Centre for Trade and Sustainable Development (ICTSD) newsletter, Bridges.
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