March 22, 2006

EU may cut farm tariffs if others reciprocate

The European Union may agree to cut farm tariffs within ongoing global trade talks if its negotiating partners show a willingness to make concessions too, the European Commission's President said Tuesday (Mar 21).

"We believe there is room for further progress on agriculture," Commission President Jose Manuel Barroso told journalists. But he added "our negotiating partners have to move too".

Global trade talks among the World Trade Organization's 149 members are at a standstill as negotiators demand their counterparts move first. Europe has bore the brunt of the blame for risking a collapse of the talks because it refuses to cut protective farm tariffs as sharply as other trading nations demand. Brazil, which wants to increase its exports of meat and grains, is among the most vocal in demanding Europe budge.

One way the EU could placate its trade partners and get talks back on track would be to agree tariff cuts on products currently excluded from reform--such as dairy products, poultry and tomatoes. But Brussels has long insisted countries such as Brazil and India must first promise to cut their own tariffs on industrial goods so European companies can sell their cars and telephone services to growing consumer markets there.

Barroso's comments came during a meeting with the press ahead of a summit of European leaders scheduled to take place in Brussels Thursday and Friday. The issue of trade may come up during that summit.

France has been the strongest defender of farm tariffs, which it says protect France's traditional stock of small farmers. Countries such as the UK and Sweden have been calling for greater cuts in farm trade barriers.

The WTO talks aim to create a global rule book to cut trade barriers and increase world wealth. A deal must be struck in early 2007 at the latest. After that, US President George W. Bush loses his authority to negotiate trade deals on behalf of Congress--an authority crucial for the talks to progress.