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Last Updated: Monday, 10 October 2005, 21:01 GMT 22:01 UK
EU move to match US farm aid cuts
US Trade Representative Rob Portman, left, and EU Trade Commissioner Peter Mandelson
The US and EU now seem to be speaking the same language
The European Union has moved to match a US offer to cut controversial agricultural subsidies and tariffs.

In an effort to revive stalled World Trade Organization (WTO) talks, US Trade Representative Rob Portman said the US would cut farm subsidies by 60%.

EU Trade Commissioner Peter Mandelson responded by indicating that the EU was willing to at least halve it highest tariffs on farm imports.

The WTO meeting in Zurich aims to bring about a trade treaty by year-end.


The European Commission said Mr Mandelson had proposed that EU tariffs which currently stand at 90% for some agricultural imports should be cut by at least 50%, with smaller cuts for lower tariffs.

Anti-WTO protestors
The WTO's stance over trade has inflamed many opinions worldwide

Europe's response came after the US said its offer was valid only if the EU and Japan also made large cuts in trade-distorting support for agriculture.

"The US is willing to take some pain," said Mr Portman. "But those who subsidise more need to reduce more."

As part of its plan, the US would cut key agricultural subsidies by 60% before 2010, with trade tariffs slashed by up to 90%.

Trade tariffs would eventually be phased out completely, except on a limited number of "sensitive" products.

The US said it was also willing to tighten up its regulation of export subsidies.


Agricultural subsidies and trade tariffs were blamed for the breakdown of WTO negotiations. Without some willingness to compromise, analysts have warned that the chances of reaching an agreement look slim.

The current round of WTO talks - called the Doha round and aimed at producing a new global free trade agreement by 2006 - are scheduled to start again in Hong Kong in December.

Developing nations want wealthier nations to stop helping their farmers and producers with state aid, which they say distorts market prices and makes it impossible for them to compete.

They also want freer access to the world's most profitable markets and are unwilling to open up their markets until they get it.


Wealthier nations are concerned that low-cost products would flood their markets, putting many of their farmers and companies out of business.

Mr Portman said that it was not only the wealthiest nations that must be willing to find a compromise.

"Developing countries must also offer contributions, commensurate with their role in agricultural trade," he wrote in the Financial Times newspaper.

Representatives from 15 nations including China, India, Australia, Brazil, South Africa, Rwanda, Hong Kong and Canada, as well as the EU and the US, have gathered for the meeting in Zurich.

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