Page last updated at 15:29 GMT, Monday, 21 July 2008 16:29 UK

EU offers 60% cut in farm tariffs

European tobacco farmer
The European Union has offered more generous cuts to farm subsidies

The European Union (EU) has offered to cut its farm tariffs by 60% to kick-start trade talks in Geneva.

EU trade commissioner Peter Mandelson urged emerging economies such as Brazil, India and China to reciprocate by slashing their industrial tariffs.

The US trade chief also vowed to help make the talks succeed if emerging nations made a contribution.

But developing countries warned that rich nations were expecting too much from their poorer counterparts.

Rich versus poor

"When it comes to trade negotiations, the vast overwhelming contribution has to come from market liberalisation rather than the subsidy side," US trade representative Susan Schwab said.

There is this kind of self-righteousness that is very common among the rich countries

Celso Amorim, Brazil's foreign minister

Richer nations, such as the US and the EU, are demanding better access in developing markets, for their manufacturers and banks.

But Brazil's foreign minister Celso Amorim said emerging economies, such as China, India and Brazil, were already offering substantial concessions and that developed countries should not expect too much.

"There is this kind of self-righteousness that is very common among the rich countries because they not only want to have the best deal, they also want to be in the high moral ground," he said.

Ministers from 35 nations are trying to thrash out a deal in make-or-break talks at the Geneva-based World Trade Organization.

Farm deadlock

Europe's latest contribution to global efforts to cut agricultural trade barriers was its best offer yet, Mr Mandelson argued.

The EU had previously offered to cut farm tariffs by 54%.

India's Trade Minister Kamal Nath on subsidies

"That is a very considerable improvement on our own part, but of course it's light years away from any effort we've previously made in a trade round," he said.

Previous trade talks have failed over the issue of farm subsidies and tariffs and how far trade in services should be liberalised.

The major industrialised countries, which have powerful farm lobbies, have been criticised for being reluctant to change financial incentives for their farmers.

Canada's Trade Minister Michael Fortier said he hoped that any new deal would protect its dairy and poultry farmers from foreign competition.

"At the end of the day, everybody has got a pocket of sensitive issues which they wish to protect," he said.

Even with the EU's pledge to make deeper tariffs cuts, developing countries are looking for a more concessionary tone from the world's most developed countries.

Egypt's trade minister Rachid Mohamed Rachid said rich nations should lead the policy changes in the face of increasing global economic uncertainty.

"Soaring fuel and food prices are a stark reminder of the continuing inequalities of global agriculture trade," he said.

"Developed countries are today responsible for the greatest distortions in the global trading system."

Mari Pangestu, Indonesia's trade minister, said rich nations' hopes for an increased share of global trade should take a back seat to the development goals of the current trade round.

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