Farm trade draft rules branded too timid

By BRIAN FALLOW

Draft plans to liberalise agricultural trade are not good enough, says Trade Minister Jim Sutton.

He was commenting on a paper by Stuart Harbison, who chairs the World Trade Organisation's agriculture negotiations. It is a first draft of an agreement - which needs to be reached by March 31 - setting the framework for new commitments and rules on farm trade as part of the Doha Round of world trade talks.

But the parties remain far apart, as Harbison acknowledges, describing his paper as a "first attempt to identify possible paths to solutions".

It proposes a complex formula for the phasing out of export subsidies, half of them within five years, the rest within nine.

Sutton said that was far too long. He noted that the proposal would allow countries to choose the later elimination date for sensitive sectors.

The draft also fell short of what the Cairns Group of agricultural exporting nations sought on tariff reductions and domestic subsidies, Sutton said.

It sets out a formula for tariff reduction that would involve bigger cuts for higher tariffs, but would also leave scope for countries to apply minimum cuts to politically sensitive products.

The paper proposes only minimal increases in quota, requiring that they be expanded to the equivalent of 10 per cent of a country's domestic consumption.

Trade-distorting domestic subsidies would be reduced 50 per cent over five years - but from the maximum levels allowed under existing WTO commitments rather than from the present levels of subsidy actually paid.

Sutton said that could leave actual subsidy rates largely unchanged in many countries.

According to OECD data, its members spend almost US$1 billion ($1.8 billion) a day on domestic farm subsidies.

Trade ministers are meeting in Tokyo this weekend in a bid to kick along the Doha Round negotiations, within which the agricultural talks are central.

"Deal-making in Geneva is very difficult, for the simple reason that no ambassador has ever been fired for saying 'no'," European Trade Commissioner Pascal Lamy said this week.

"But I know some of them have been fired for saying 'yes', and this is why it's a matter for ministers."