Trade ministers on Tuesday edged towards a breakthrough in deadlocked talks over agriculture, with the European Union, the US and a large block of developing countries agreeing to consider a new framework for negotiations ahead of a crucial end-of-year meeting in Hong Kong.
The framework, proposed by the G20 group of developing countries, has the potential to break an impasse over farm tariffs, in particular between the EU and the US, ministers said on Tuesday.
“The two extreme interests [of the US and the EU] would not fly,” said Kamal Nath, the Indian commerce and industry minister, who chairs the G20 group.
Ministers from about 30 countries have gathered in Dalian, a Chinese port city, in an effort to produce a framework for negotiations ahead of a meeting of all 148 members of the World Trade Organisation in Hong Kong in December.
The G20 proposal centres on a new five-tier tariff system for developed countries, setting uniform tariff cuts in each band, and also capping the maximum tax on imports at 100 per cent.
The plan offers greater leeway for developing countries, with a four-tiered system and a maximum tariff of 150 per cent. Mariann Fischer Boel, EU agriculture commissioner, said: “We welcome the G20 proposal on market access.”
Rob Portman, US trade representative, also backed the G20 plan as a potential basis for negotiations, saying: “The US is prepared to move, and move to the middle.”
The differences between the world's two largest trading blocs remain substantial, with the EU proposing a variation on the G20 plan to give it greater flexibility to resist sharp tariff cuts.
The EU is also demanding that the US put on the table a plan to reduce its domestic farm subsidies as part of any negotiating package, something that Mr Portman rejected yesterday as “not realistic”.
With only about two weeks to go before a framework is needed to allow time for the detailed and difficult negotiations ahead of Hong Kong, not everybody was optimistic about a genuine resolution to the impasse.
“I am pessimistic but I want to be proved wrong,” said Supachai Panitchpakdi,the WTO director-general.
“We have days. We don't have weeks.”
The G20 plan potentially faces stiff resistance from countries such as Japan, Taiwan and South Korea, which have tariffs on farm goods far higher than the caps set by the G20 proposal.
Countries that demand open market access for their farm products, such as Australia and Canada, will want to ensure that the G20 plan, which has steep cuts to the products with the highest tariffs, is not diluted by the EU.
“We want to see a number of bands and we would like to see a progressive formula within each band that will provide the greatest possibility of increase in access,” said Jim Peterson, Canada's trade minister.
