U.S. Trade Representative, Rob Portman, says he believes new American proposals for cutting farm subsidies and reducing tariffs will give new life to the deadlocked Doha Round of Free Trade Talks. Trade ministers are in Geneva to agree on a trade deal in time for a ministerial conference in Hong Kong in December.
U.S. Trade Representative, Rob Portman, says he is guardedly optimistic that a deal to move the Doha Round forward will be ready in time for the Hong Kong ministerial. He says Washington's bold new proposal to cut domestic farm subsidies by 60 percent and to eliminate tariffs by 2023 has injected new momentum into these stalled negotiations.
Under the new proposal, the United States cut current farm subsidies from $14 billion to over $7.5 billion a year. In return, Washington expects the European Union and Japan, which spend more, to slash their subsidies by 80 percent.
Mr. Portman says American farmers generally support this proposal. But, only if they get greater market access from European and other developed economies.
He says market access also is the key to having true development benefits from the Doha Round of free trade talks.
"The World Bank economists will tell you, other economists will tell you the gains to the developing world in the Development Round will come primarily from market access," he said. "Those gains will dwarf anything we do in terms of domestic support. There we are talking about not tens of billions, but hundreds of billions of dollars of potential benefit to the developing world should we open up the markets, particularly in the developed economies."
An OECD report finds all but a very small number of developing countries, mostly in sub-Saharan Africa, stand to gain more than they lose from successful completion of the Doha Round.
U.S. Trade Chief Portman disagrees. He says the world economy will benefit from a successful Round and developing countries in particular will benefit. He says the poorest countries will not be asked to make any contribution on subsidies or production. He says countries in sub-Saharan Africa will be in a better position to compete with other agricultural producers.
"This would enable them to have better access to markets all around the world, including markets in developing countries that are not LDC's [least developed countries], but are emerging economies in the developing world," he said. "So, it is a win-win…I think it is clear to say the status quo is not acceptable."
Time is running out on these talks. Only nine weeks remain to Hong Kong. After that, only one year will be left to complete the Doha Round.
Mr. Portman says members of the World Trade Organization need to make some tough decisions to unlock the potential of this development round. He says it would be a huge missed opportunity for the world and, especially for poor countries in sub-Saharan Africa, not to do so.
