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Last Updated: Friday, 28 October 2005, 20:54 GMT 21:54 UK
EU offers to cut farming tariffs
Wheat
Farm tariffs and subsidies are holding up world trade talks
Europe has offered to cut the tariffs it charges on farm goods by up to 60%.

The European Commission said it was doubling its average cut to about 47%, as negotiators sought to prevent a new world trade deal collapsing.

EU Trade Commissioner Peter Mandelson had considered larger cuts ahead of a December summit, but on Friday France asked if he was exceeding his mandate.

Mr Mandelson had earlier told BBC Radio 4's World at One that the EU offer was "a very bold one... a serious one".

He added: "By any measure this is a very bold move indeed. It goes way beyond anything we've offered before."

The European Commission said its offer "must unlock immediate progress" on other areas, such as services and industrial products.

Mr Mandelson has been under pressure from France and on Friday evening its trade minister Christine Lagarde said Paris was seeking clarification from Brussels that a new EU offer respected Mr Mandelson's mandate.

'Outer limit'

And despite Mr Mandelson's description of the latest offer as "Europe's bottom line" and the "outer limit" of what his mandate would allow, other negotiators were critical.

"From our early analysis, we are disappointed," said US Trade Representative Rob Portman in a statement.

"While in some ways it is a step in the right direction and we acknowledge the European Commission's efforts, much more needs to be done."

For example, the new proposals set aside 8% of goods as "sensitive", meaning they would still attract higher tariffs to protect EU production.

The US says this should be only 1% of farming goods.

Biggest offer

Friday's new proposal could still fall foul of internal rifts, since France has vowed to block further concessions.

French President Jacques Chirac said on Thursday that he could veto any further concessions, in the face of France's huge and powerful farming lobby.

Europe's farming subsidies have been blamed by other parties of being one of the main problems hampering the trade talks.

Until now, its standing offer to cut tariffs has been put by the US and other parties at about 25%.

French President Jacques Chirac
France is holding out against further concessions

The new proposal is by far the biggest offer yet from the European Union, and offers to cut the steepest tariff rates by 60% - and to scrap subsidies as long as its trading partners do likewise.

But no timetable has yet been announced.

Doha round

The World Trade Organization (WTO) is currently trying to hammer out a new global trade deal before 2006.

The WTO hopes to have an agreement in place ahead of a key conference in Hong Kong in December, which is scheduled to rubber-stamp the final deal, and bring to an end the so-called Doha round of trade talks that first started in 2001.

WTO head Pascal Lamy last week called on both the US and EU to make concessions.

But while each side accepts that cutting farm subsidies and tariffs is vital in order to increase access for food exports from the developing world, both Washington and Brussels face pressure from their own agricultural sectors.


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