Europe to review US offer on farm deal

22 September, 2006

EUROPEAN trade negotiators have agreed to consider a new offer from the US to cut its generous subsidy schemes for its own farmers.

Two days of global trade talks in Cairns failed to break the deadlock in the Doha round, but set the scene for more discussions in the US next week. European Union ambassador Bruno Julian told The Weekend Australian yesterday that EU Trade Minister Peter Mandelson would seek more information from the Americans on their stated willingness to cut farm subsidies when he arrived in Washington next week.

The meeting provides an opportunity to revive the trade reform negotiations that collapsed in July.

"The US has made a further offer, that's what I heard, even if they have not been very specific in what they said," Mr Julian said.

Trade representatives of the Australia-led Cairns group of agricultural exporters called yesterday for a resumption of the collapsed Doha round of negotiations by mid-November.

"The window of opportunity is only narrowly opened and is closing and we don't have any time to spare," Trade Minister Mark Vaile said.

"This is about getting the major players to focus ... on what they need to do to get more flexibility to resume negotiations by that time."

Mr Vaile said discussions between the 18 Cairns Group members had been positive, but it was important not to underestimate the challenges to be overcome for the Doha talks to resume.

"None of the major players wants to move first," he said.

"This is the significant challenge - how do we all get them to move?"

Mr Julian said the EU wanted to capitalise on what was on the table, and Mr Mandelson would maintain the momentum of the trade reform talks in Washington on Tuesday.

He doubted if Australia was offended when Mr Mandelson accused John Howard of being out of touch on trade issues, and said the Prime Minister had taken a light-hearted approach.

"He still had a sense of humour," he said.

"The main point in what Mr Mandelson wanted to say - if I can interpret what the commissioner said - is that we have made a concrete effort through the G6 in July, and this offer has not been matched by the US."

Mr Vaile rejected suggestions from World Trade Organisation chief Pascal Lamy that the single-desk trading system was distorting Australia's international trade arrangements.

He repeated a pledge given in Hong Kong last year to review the single-desk system, which allows monopoly traders such as AWB to operate, before 2013.

"We all made a commitment then to remove any of those trade-distorting or export-subsidy aspects of those operations, and that's clear and been made public," he said.

Labor foreign affairs spokesman Kevin Rudd said the lack of progress in Cairns showed Mr Vaile should be moved from the trade portfolio.

Philippines Department of Agriculture undersecretary for policy and planning Segfredo R.Serrano took a parting shot at the WTO chief before the completion of talks yesterday.

"While we appreciate his opinion, it is not Pascal Lamy who is a party to these negotiations," Mr Serrano said.