Brussels, 25/01/2007 (Agence Europe) - In the run-up to a major informal meeting (on 27 January) of some 30 trade ministers to reactivate Doha trade talks (EUROPE 9348), the private American foundation, Carnegie Endowment, has published a new, highly critical analysis signed by Sandra Polaski. She claims that the United States had trapped itself during the round of talks by suggesting insufficient reduction of farm subsidies while calling for excessive opening of its partners' markets. It would be in Washington's interest, she says, to review its offer as well as its Farm Bill.
“The United States has put itself in a corner with its maximalist bargaining proposal on agriculture. Changing its position is the only way out. As it happens, a changed position that meets the key objections of the rest of the world would also be good domestic, trade and foreign policy for the United States”, says Ms Polaski. In her view, the American offer “is widely seen as requiring little or no actual policy change by the United States, particularly with respect to trade-distorting subsidies paid to certain US farm sectors, while asking for wide and deep market opening by its trading partners”. Agricultural products only account for 4.5% of US exports compared to over 90% for manufactured goods and services. On the domestic front, Ms Polaski deplores the fact that the American farm subsidy programme is “an inequitable, distorted and very expensive set of policies that do not serve the objectives of the US government, the interests of US consumers, or even the interests of the majority of US farmers”. She takes the view that US internal subsidies benefit no more than half of American farms, which are mostly very large or belong to agricultural companies. Ms Polaski considers therefore that the Congress should review US farm policy in earnest once the 2007 Farm Bill is adopted. At the external level, she considers that review of the American farm offer to the WTO would allow the United States to make headway for increasing the outlets for its manufactured goods and services, which make up a large part of its economy. US farm exports would continue to grow not only because of the future opening of markets by wealthy countries but also due to income growth in developing countries, she said, pointing out, moreover, that the United States is constantly the main exporter of farm goods towards developing countries. Washington's maximalist demands when it comes to gaining access to the markets of developing countries may, she points out, “backfire in the real world, as depressed incomes for the large portion of households dependent on farming force them to buy less, not more US goods”.
Ms Polaski praises the Union for being willing to make an “unprecedented” effort in accepting average overall tariff reductions of 50% for agricultural goods. (eh)