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EU Says May Make Deeper Tariff Cuts in WTO Talks

Source: Reuters
22/05/2006

Brussels, May 19 - The European Union said on Friday it would consider making deeper cuts to its farm import tariffs as part of a World Trade Organization deal that risks running out of time soon.

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A spokesman for EU Trade Commissioner Peter Mandelson said Brussels was prepared to move closer to, but not meet, the demands of developing countries in the G20 group that want the EU to slash its farm tariffs by an average of 54 percent.

Brussels has so far offered an average tariff cut of about 39 percent and Mandelson is under pressure not to offer much more on agriculture from EU countries with strong farm lobbies, chief among them France.

"In the right circumstances we can go further towards the G20 proposal but certainly not all the way," said Peter Power, Mandelson's spokesman.

The EU insists developing countries must offer more with planned cuts to their tariffs for industrial goods -- a key area of interest for European companies -- and is also pressing the United States to offer more on agriculture.

Previously, Mandelson said the EU might adjust its offer on agriculture but Friday's comment suggested more flexibility.

The specialist publication Inside U.S. Trade, citing "informed sources," reported on Friday that Mandelson had signaled he could agree to cut the average EU agricultural import tariff by just under 50 percent.

"I am not prepared to discuss figures," Power said when asked about the report.

U.S. Trade Representative Rob Portman told reporters after a speech in Chicago he had not seen details of any new EU offer. But it is not enough for the EU to move closer to the G20 position, Portman said. Brussels has to move beyond that to satisfy the United States, he said.

"In my year on this job, incrementally and sometimes painfully, the EU has moved its position slowly toward more openness, which is good," Portman said.

But negotiations will not accomplish their goal of generating new trade flows unless Brussels agrees to much deeper tariff cuts than it has offered so far, he said.

Top trade negotiators from the EU, the United States and other key WTO countries are due to meet on the sidelines of an annual meeting of the Organization for Economic Cooperation and Development in Paris next week.

WTO members are struggling to meet a self-imposed deadline of the end of July for a deal on the main points of the new round.

The Doha round was launched in 2001 in the hope of helping poor countries and boosting the global economy.

Fundamental differences, many of them involving agriculture, have caused the round to miss several deadlines and it now risks dragging on for several more years if it cannot be sealed before U.S. President George W. Bush loses special powers to approve trade deals in the middle of 2007.



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