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Wednesday, 15 May, 2002, 16:20 GMT 17:20 UK
Farming nations slam US payouts
Kansas corn field
Spending on US farmers is to increase by almost 80%
The free market credentials of the US have come under fresh attack, with 18 countries condemning a bill which will hand American farmers up to $190bn (131bn) over the next decade.

The Cairns Group, which numbers Australian, Brazil and South Africa among members, warned that the US farm bill was "damaging to the international economy".

By increasing farm subsidies by nearly 80%, the legislation threatened efforts to reduce agricultural subsidies worldwide, the group said.

And it was poorer countries, attempting to grow food exports, which stood to lose the most, Wednesday's statement added.

"The impact will be particularly damaging on developing countries... many of which are heavily reliant on their agricultural sectors for their economic development," the statement said.

The European Union, which has long been the target of US calls for subsidy cuts, has already said it may challenge the payments at the World Trade Organisation (WTO).

And Wednesday's criticism follows mounting condemnation of the US decision to impose tariffs on steel imports.

Commitment call

The farm bill, signed by US President George W Bush on Monday, was introduced as a "safety net" for a sector he described as "essential to the success of the American economy".

But it also revived subsidies for wool and honey producers, and provided new payments for milk, peanuts, lentils and dry peas, so protecting farmers of these products from international competition.

"[The bill] is damaging to the international economy and could undermine efforts to achieve global reform of this heavily subsidised and distorted sector," the Cairns Group statement said.

The US has previously claimed to be an ally of Cairns Group nations in their efforts to cut subsidies.

In November, the WTO's 144 members, which include the US, signed up to negotiations on fresh trade proposals including a "reduction of, with a view to phasing out, all forms of export subsidy".

The Cairns nations said on Wednesday: "We call on the US to... demonstrate the necessary leadership for the attainment of an ambitious and comprehensive programme of agricultural liberalisation and reform in the current WTO negotiations."

The other members of the Cairns Group are Argentina, Bolivia, Chile, Colombia, Costa Rica, Fiji, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, Thailand and Uruguay.

See also:

14 May 02 | Business
IMF chief slams US steel tariffs
13 May 02 | Business
Outrage as US farm handout agreed
10 May 02 | Business
Anger greets US farm aid
03 May 02 | Business
US farm aid threatens new trade row
02 May 02 | Business
EU-US trade tensions rise
29 Apr 02 | Business
US farm bill raises trade tensions
14 Jan 02 | Business
Q&A: US-EU trade war
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