WTO subsidies paper favours US, warns Fischler

Date: 20/02/03

By David Cronin

FRANZ Fischler has branded a key World Trade Organization (WTO) paper on farm subsidies "unbalanced", arguing it favours the US over the EU.

The agriculture commissioner is angry that loopholes - enabling America to continue with perceived trade-distorting measures - would continue if recommendations by Stuart Harbison, chairman of the WTO's talks on farm trade, come into effect.

Harbison's paper does not adequately tackle the "de minimis clause", according to Fischler. Under this, farm subsidies paid by developed countries that amount to less than 5% of the value of production do not have to be reduced. The Union wants to abolish the clause, claiming it allows the US to spend some €7.5 billion on farm subsidies per year - not a level playing field, says the European Commission.

Fischler also says the paper does not properly address export credits by other developed parts of the world and the use of food aid to deal with surplus production, contending these both have a negative effect on world trade: "Everything is being required of us and nothing is being required of anyone else. It offers huge market access to others to European markets and very little access for Europeans to others' markets."

The Harbison paper proposes export subsidy cuts, advocating that most should be eliminated within five to nine years. It urges tariffs be reduced by 60%, some 24% more than the Union has proposed. The EU is seeking that farm support measures deemed trade-distorting should be slashed by 55%, providing there is equal "burden-sharing" among richer countries.

Agriculture Commissioner Franz Fischler has branded a key World Trade Organization paper on farm subsidies 'unbalanced', arguing it favours the US over the EU.