WTO Chief Offers Idea for Ending Stalemate

But U.S. farm groups aren't buying Pascal Lamy's idea of more cuts and a limit on U.S. ag spending.

Trade ministers are hard at work trying to make headway on a World Trade Organization agreement, but one idea floated by the organization's chief isn't being met well by at least one U.S. farm group. WTO chief Pascal Lamy has suggested that a proposal by the G20 group of developing countries for a 54% cut in ag import duties and a reduction in U.S. farm subsidy spending to below $20 billion, could be the basis for an agreement, according to a Reuters report.

But Bob Stallman, president of the American Farm Bureau Federation, has responded saying the idea would "come up with a net economic loss to producers" and won't support the idea.

The U.S. made a significant offer last October to cut trade-distorting farm programs 53% in return for other countries cutting import duties 95%. So far U.S. negotiators have held firm despite comments from the G20 and the European Union that say further cuts are necessary.

The European Union has said the United States has to offer more to get an agreement, but in comments made before the WTO meeting in Geneva this week, Congress and U.S. negotiators have indicated they need market access as part of these agreements. Stallman told Reuters that "we're here because we want real trade, not phony numbers. U.S. agriculture will walk away from a bad deal. Our members say that, Congress says that."

The G20 group, which includes Brazil, has become a powerful force in trade negotiations at the WTO. The group is balking at opening its markets further in exchange for the U.S.-offered 53% cut in subsidies saying the United States needs to offer more.

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