Doha – U.S. Promises New Proposal for Subsidy Cut

The principal American voice for commercial negotiations said this Monday that the United States is ready to present a new proposal to cut their agricultural subsidies, one of the developing world’s greatest demands in going ahead with negotiations for the liberalization of global trade.

“We know that we must make many more contributions, and we are prepared to make them. The United States takes a position of complete leadership and we intend to maintain that position,” declared the North American commercial representative, Susan Schwab, shortly before negotiations between 35 member countries of the World Trade Organization (WTO) began in Geneva.

The meeting, a part of the Doha round, is considered to be crucial since, in the absence of any deal thus far, negotiations are being hampered by the United States’ presidential elections in November, as well as by the European election in June 2009.

Scwab admitted that, in her role as world leader, the United States has the “responsibility” to go beyond what has already been offered, while also highlighting an expectation of proposals from other countries, “including from the more important developing countries.”

“No one or two countries, alone, will be capable of successfully concluding the Doha round without the active commitment and contribution from all of our colleagues,” said Schwab. “We all know we will have to make tough choices.”

On Saturday, the Brazilian Minister of Foreign Relations, Celso Amorim, criticized the subsidies in the negotiations of the Doha round and pointed out that the current proposal would allow the United States to concede up to US$13 billion in aid to her farmers, double the current value of around US$7 billion.

For Schwab, the American position regarding agricultural subsidies is, “a convenient excuse for many countries who prefer not to touch upon other aspects of negotiations,” such as the question of market access for services and industrial goods.

Counterpart

Rich countries would like to see bigger cuts in import tariffs in these sectors, while the poorer members try to protect a sector in which they consider themselves unable to equally compete.

“Any study worth its weight has left it clear that, as far as commercial negotiations are concerned, it is not through subsidy cuts that one can most contribute to growth and economic development, but through ensuring more open markets,” he argued.

For its part, the European Union has offered to reduce agricultural subsidies by 60% in exchange for a reduction in import tariffs for industrial goods and services from emerging markets.

According to the EU’s commercial representative, Peter Mandelson, this is the best offer ever presented by the bloc.

Controversy

The North American representative refused to comment on statements made by Amorim on Saturday, accusing developing countries of using Nazi communication tactics to spread the message of conceding more in agriculture than other partners have in industry.

“Goebbels used to say that a lie, repeated many times, becomes the truth… when i hear these declarations, I cannot help but think of Goebbels,” said the Brazilian chancellor, quoting the Nazi minister of propaganda under Adolf Hitler’s regime.

The statement was classified as “unhappy” by Schwab’s spokeswoman, herself a daughter of Holocaust survivors.

Today Schwab seemed eager to turn a new leaf and declared that she is in Geneva to, “finish a job: to guarantee a successful agreement for the Doha round.”