Lobbies in US oppose liberal sops at WTO

Pressure lobbies are at work in the US to ensure that it does not make significant concessions at the World Trade Organisation.

Senator Saxby Chambliss, chairman of the committee on agriculture, nutrition and forestry, has asked the agriculture department to ensure that there was no reduction in the overall farm programme costs in the WTO negotiations.

"I am deeply concerned because the administration is using the current negotiations to reshape farm policy without the full input of Congress and grassroot support. The agriculture negotiations can set broad parameters of spending limits, but they should not write the next Farm Bill," Chambliss said in a letter to Mike Johanns, secretary in the US department of agriculture.

"Care should be taken to ensure that resources currently committed to all titles of the Farm Bill remain available when it is reauthorised in 2007. I firmly believe the US should commit to reducing trade-distorting domestic support in exchange for other forms, but it should not reduce the overall farm program expenditures in the negotiations," the Chambliss said.

Expressing concern that proposals from the EU and other countries may reduce the support for the US, the senator said, "Some of our trading partners are asking for a lot while offering very little."

Chambliss said efforts to eliminate the blue box should be opposed. The blue box refers to mildly trade-distorting subsidies which are permissible up to a limit under the WTO.

"Overall caps are not objectionable. But, product-specific caps should not be part of the limits placed on either amber or blue box support," he said.

He added that agriculture economy should not be subject to rapid shocks as part of the negotiations.

"The US can commit to substantial down payments in the first years of an agreement, but the Congress must have adequate time extending over a period of time (ie a minimum of 10 years) to implement larger and deeper reforms in domestic support," he said.

"A final agreement should maximise protection for farmers and ranchers, while providing flexibility for new mechanisms to maintain the farm safety net," he said.

The US has offered an overall 53 per cent reduction from the bound rates in its trade-distorting subsidies to the WTO. But, the proposal is unacceptable to developing countries like India.

This is because given the huge gap between the bound and applied or actual rates in the US, the proposed tariff reduction will still allow the US to increase its subsidies by around a billion dollars from the applied rates.