14th May 2021

EU offers to cut farm subsidies

  • Farm subsidies have been one of the main sticking points in the current Doha round of world trade negotiations (Photo: EUobserver)

The EU has matched Washington's move and said it is prepared to substantially cut subsidies for its farmers in a bid to get stalled world trade talks moving.

In a statement released on Monday (10 October), EU trade commissioner Peter Mandelson said the bloc would be prepared to reduce its aid to the agriculture sector by 70 percent.

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Presenting the EU's plan to WTO counterparts in Zurich, Mr Mandelson also said the EU would be ready to reduce its import duties on farm goods by up to 60 percent.

"If we do not advance this negotiation in concrete terms this week - and amongst ourselves today - we will have to acknowledge that we may simply run out of time".

"They have to be real offers providing forward movement. The time has come to push the envelope", the trade commissioner told his trade counterparts in Zurich.

The commission made clear that the EU's gesture is "entirely contingent on satisfactory reciprocal gestures" from other WTO members.

The US already indicated on Monday that it would be prepared to reduce farm subsidies by up to 60 percent.

But reactions have not always been positive.

According to news agency AFP, Japanese Agriculture Minister Mineichi Iwanaga told reporters: "Japan is not able to accept the US proposal on domestic support as a basis for further discussion because the extent of the reduction the US is willing to make on its own domestic support is insufficient, in our view."

"There is a very big gap between the US proposal and our position", he added.

For the EU's part, there is also set to be strong opposition from among its own member states.

Although the European Commission is entitled to negotiate on behalf of member states, a group of governments, particularly France, have said that they want to go through any agreement first before the Brussels executive signs up to it.

On top of this, around 13 member states are opposed to the move to cut subsidies by up to 70 percent, reports the Polish daily Rzeczpospolita.

These countries, which include France and Poland, wrote a letter to agriculture commissioner Mariann Fischer-Boel in which they set out their 'red lines' and argue that the EU has already done more to open up markets than some of its trading partners

The WTO's members are trying to reach a deal on liberalising trade to reduce poverty in developing countries but farm subsidies have been one of the main sticking points for the talks that were lauched in 2001.

The negotiations are up against a tight deadline, which is why the EU and the US - upon whom much of the talks depend - have started to show their cards.

Mid-December in Hong Kong at a WTO ministerial meeting, is when the main thrust of agreement is expected to be reached.

The successful outcome to the talks will also largely depend on developing countries who have been urging the EU and the US to cut trade-distorting subsidies.

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