EU Falsely Lays Blame for Trade Talks Collapse, U.S. Says

By Bruce Odessey
Washington File Staff Writer

Washington - U.S. trade negotiators have rebuked their European Union (EU) counterparts for what they view as false and misleading statements about the collapse of World Trade Organization (WTO) negotiations.

An Office of the U.S. Trade Representative (USTR) statement released July 25 by the U.S. mission in Geneva rebuts an EU charge blaming the United States for the collapse a day earlier.

Reluctant to point the finger of blame as others rushed to do, U.S. negotiators nevertheless could not let stand the EU accusation that the United States was unwilling to show flexibility, the statement says.

The United States made clear it was ready to show more flexibility in cutting trade-distorting domestic support spending on its farmers even further than the 60 percent cuts it proposed in October 2005 but only if the EU and rapidly expanding developing countries would open their markets further to agricultural imports, the statement says.

The EU maintains average agricultural tariffs of 23 percent, nearly twice the 12 percent U.S. average, and domestic support spending of $33 billion, nearly three times higher than the U.S. level, according to USTR.

"Unable to endorse the U.S. proposal, given substantial opposition from France and a few other member states with strong farm interests, the EU attempted, alternately, to criticize the U.S. proposal as too ambitious or too weak," the statement says.

"Most recently, the EU attacked the United States for failing to propose even more dramatic cuts to domestic support while at the same time insisting on the right to lavish more than twice as much trade-distorting subsidies on its farmers," it says.

USTR asserts that the EU proposal would allow little or no additional agricultural market access because of the number of products it would exclude.  The EU proposal would require zero change in current EU domestic support programs, USTR says.

WTO Director-General Pascal Lamy suspended the long-stalled negotiations, formally called the Doha Development Agenda, July 24 after a meeting with ministers from the United States, EU, Australia, Brazil, India and Japan revealed wide differences persisting over the politically sensitive agricultural issues.  (See related article.)

Ministers from the EU and India quickly issued statements blaming the United States.  C. Fred Bergsten, director of the Institute for International Economics in Washington, said in an interview that all the major countries share some of the blame.

"But I think the United States has, on the whole, been more forthright than the others in making proposals that would lead to success in the talks," Bergsten said.  "It's Europe and India, in large part on agricultural policy, that have been naysayers that have caused the breakdown.

"At the end of the day, everybody's going to have to come back with better proposals to get a package on the table that will enable the negotiations to get going again," he said.

The USTR statement is available on the Web site of the U.S. mission in Geneva.  A related fact sheet (PDF, 2 pages) is available on the USTR Web site.

For additional information, see USA and the WTO