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Cairns Group fails to reach world farm trade consensus

CAIRNS, Australia – 09/22/06 – The two-day conclave of the Cairns Group of agricultural exporters has broken up after failing to break an impasse between the US and the European Union over farm subsidies that, some analysts say, could leave global trade reform in the doldrums for years.

Ministers from the group’s 18 members had called for a quick resumption of the faltering Doha round of World Trade Organization (WTO) talks, arguing the world could not afford to miss the chance to break down damaging agricultural trade barriers.

But, negotiators were unable to find common ground between the group’s two major players – the US and the European Union – over the rancorous issue of the agricultural subsidies each pays-out to selected sectors of their respective agricultural sectors.

The Cairns Group, pushing for reforms in agricultural trade for 20 years, has urged the WTO's 149 member countries to return to the bargaining table by November to revive the Doha round that was suspended indefinitely in July.

The bloc's ambitious November deadline leaves the parties just weeks to come together before the Bush Administration begins focusing on the US congressional election.

The Cairn's Group's chairman, Australian Trade Minister Mark Vaile, did, however, inject a note of optimism to the situation, telling the media at a press conference held at the end of the conference that the “level of ambition has not changed and no-one, not even the US, European Union (EU) or Japan, has hinted they might abort future discussions.”

But, he stressed, “the major players need to be prepared to give more and expect less.”

Failure to get any agreement in the beleaguered Doha Round by the end of next year could also leave the US unable to implement any reforms from the process, with Washington due to implement a new farm bill by the end of 2007 that will set the level of subsidies it pays its farmers for the next five years.

Vaile admitted the November deadline could be a long shot, but said the major players in the round had to be spurred.

"The window of opportunity is closing rapidly, and unless we make those sorts of challenges, countries will still continue to drag their feet," he told the press.

"If it doesn't work, then we can be satisfied we've done everything we can."
Vaile has put forward a plan for the EU to cut its tariffs by another 5%, and for the US to slash another $5 billion from its domestic subsidies to farmers.

The EU, however, appears unwilling to move beyond its offer of an average 51% cut to tariffs, while US Agriculture Secretary Mike Johanns responded to Vaile's plan, saying it would be “tough to accommodate.”

Both the WTO and the Cairns Group also want developing nations to soften their own demands, focusing on a proposal by the G-33 group of developing countries to exempt 20% of their agricultural products from any tariff cuts.

But key G-33 members the Philippines and Indonesia – both also members of the Cairns Group – have repeatedly said neither country is likely to move far from their position.

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Korea, US Free Trade Pact ''Possible'' by Early 2007

WASHINGTON, DC – 10/25/06 – A free trade pact between the US and South Korea could become a reality by early 2007, says chief US negotiator Wendy Cutler at the opening of this week’s fourth round of talks between the two countries; since the two sides launched FTA negotiations in February they have reported little progress even though they postponed consideration of the most politically sensitive issues, such as US access to the Korean rice market.