From: Reuters
Published July 4, 2005 12:00 AM

U.S. Will Drop Farm Subsidies if EU Does Same, Bush Says

LONDON — President George W. Bush said the United States will end subsidies to its farmers if Europe does the same, an offer the European Commission said it hoped would lead to a breakthrough at world trade talks later this year.

Asked in an interview broadcast on Monday if the United States would abolish farm subsidies if Europe did, Bush responded: "Absolutely, and I think we have an obligation to work together to do that".

"Let's join hands as wealthy industrialised nations and say to the world, we are going to get rid of all our agricultural subsidies together," Bush told ITV1 television ahead of a summit of the Group of Eight rich nations in Scotland on Wednesday.

"The position of the U.S. government is, we are willing to do so ... with our fine friends in the European Union," he said.

European Union Farm Commissioner Mariann Fischer Boel welcomed his comments, saying she hoped they would lead to deep reform of the U.S. Farm Bill in 2007 and progress on cutting subsidies at world trade talks in Hong Kong in December.

Britain, which holds the presidency of the G8 and the EU, has stepped up its campaign to reform farm subsidies in Europe -- at the heart of a battle over the bloc's long-term budget. Campaigners and many world leaders agree subsidies in wealthy countries price African producers out of world markets and condemn the continent to poverty.

But G8 leaders are not expected to make progress on trade at their summit in Gleneagles, where the focus will be on ending African poverty and addressing climate change.

Fischer Boel said Europe had put in place the biggest ever reform of the Common Agricultural Policy (CAP). Europe was ready to bind that reform into a deal at the World Trade Organisation, provided the U.S. did the same, she said in a statement.

EU farm subsidies were no longer trade-distorting while U.S. payments are still production-linked and "seriously distort trade", she said.

But Bush said: "We've got agricultural subsidies, not nearly to the extent that our friends in the EU have."

Fischer Boel said the EU had pledged to phase out all export subsidies.

"But before agreeing on an end date, we need our partners, in particular the U.S., to do the same, by phasing out export credits and the use of dubious 'food aid' to dispose of surpluses -- which is not a way to ensure long-term food security for developing countries," she added.

Source: Reuters

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