From: Missy Ryan -Reuters
Published September 5, 2007 08:23 AM

U.S. farm groups deflect pressure on Doha cuts

WASHINGTON (Reuters) - U.S. farm groups bristled this week at calls for deeper cuts to American agriculture subsidies, just as trade negotiators urged the United States to do more to break a stubborn stalemate in world trade talks.


Dave Salmonsen, who follows trade at the American Farm Bureau Federation, the largest U.S. agriculture group, said trading partners were wrong to place the onus on the United States for moving the World Trade Organization's Doha round closer to a long-elusive agreement.


"It's up to everyone else to come up with some market access to make this happen," he said.


On Tuesday, European Union trade chief Peter Mandelson said the United States "holds the key" to breaking an impasse in the round, which has made only fitful progress since its 2001 launch. Australia said the United States would send a powerful signal if it took steps toward reducing farm subsidies.


Negotiators, in Geneva this week for the latest Doha talks, acknowledge that cooperation must come from all WTO countries. Still, much pressure is directed at U.S. agriculture and the heavy subsidies it receives.


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But farm groups here -- whose support will be critical in getting any agreement through Congress -- make it clear they will balk at any deal that does not do enough for U.S. exports.


"It's unfair to expect that the United States would just unilaterally offer to reduce subsidies" without reciprocal reductions in tariffs, said David Coia, a spokesman for the USA Rice Federation, one of the many industry groups saying their support for the round hinges on, in Coia's words, "market access, market access, market access."


The United States already has offered to cut its overall subsidy cap by 53 percent to $22.5 billion a year. Support for even deeper cuts have been reported, but U.S. officials have dismissed a recent proposal to go as low as $13 billion.


In general, U.S. farm groups appear wary at this stage.


"While it's hard to see negotiators arriving at a truly good agreement for US agriculture at this point; at all costs we must avoid reaching a bad deal," said Jaime Castaneda, an official at the National Milk Producers Federation.


Even with high crop prices and U.S. ethanol production driving grain demand, trade is an essential income-earner for U.S. farmers. Farm exports are expected to hit a record $83.5 billion in fiscal 2008; U.S. farmers are looking to emerging economies like China to continue that expansion.


"The round must establish new trade flows and the U.S. is willing to continue to do its part," said Steve Norton, a spokesman for Trade Representative Susan Schwab.


Despite the remaining divisions on agriculture, the fate of the round may hang equally on whether progress can be made in parallel talks on manufacturing trade.


The divisions in the so-called "NAMA" arena have become increasingly conspicuous since a breakdown in talks between U.S., EU, Brazilian and Indian official in June.


U.S. farmers "are not thrilled that we continue to negotiate on agriculture while we are still facing an uncertain future for NAMA. This imbalance only contributes to the current calls from countries asking the U.S. to do more on domestic support," Castaneda said.


If things go well in the Geneva talks, farm negotiations chair Crawford Falconer may release a more detailed negotiating draft later this month, which could build momentum for a deal.


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