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A New Zealand diplomat has proposed a compromise on farm subsidies to try to get movement in world trade talks.
Crawford Falconer, who chairs agricultural negotiations for the World Trade Organisation, has put forward a proposal that will push the United States to reduce its farm subsidies - earning a cautious reaction from that country.
The plan would reduce the ceiling for overall trade-distorting subsidies for US farmers to between US$13 billion ($16.4 billion) and US$16.4 billion a year.
The deeper cut is well above the 53 per cent reduction the Bush administration has on the table and would put the US close to the US$13.2 billion it was expected to spend on all subsidies, including conservation, in fiscal 2008.
Gretchen Hamel, a spokeswoman for the US Trade Representative's office, said she would be interested in reaction to the proposal.
"We look forward to next week's work in Geneva, when we will exchange with our trading partners initial reactions to the texts [proposal] and discuss how to take the negotiations forward," she said.
"The texts will demand close analysis as we develop a comprehensive US reaction."
Hamel said a final deal would also have to include trade in services.
American business and agriculture leaders reacted gingerly as they digested more than 60 dense pages laying out the means of reducing import duties, reining in subsidies and regulating other aspects of global commerce.
But Gary Blumenthal, an analyst at World Perspectives in Washington, said a "rather cavernous philosophical divide remains".
With the Doha round of world trade talks on the brink of collapse, the draft leaves some wriggle room on difficult issues in agriculture, including a primary cut of between 4 per cent and 6 per cent of tariff lines for "sensitive" products that developed countries can protect from full tariff cuts. Some developed countries could protect more.
It does not set down a figure for how many goods developing countries can deem "special" products, an issue that has divided Washington and New Delhi.
In the manufacturing negotiations, chairman Don Stephenson said his proposal would reduce bound tariffs for developed countries below 3 per cent on average and below 10 per cent for their most sensitive products.
Bound tariffs would be below 12 per cent on average for developing countries.
The differential between developed and developing country tariff cuts has been a hotly contested part of the manufacturing talks.
US manufacturers said they needed time to digest the texts but welcomed the proposals as a positive development.
- NZPA
