The U.S. offer to reduce its farm support subsidies by sixty per cent over a five year period has two goals behind it. Get developed nations like the European Union and Japan to cut their farm subsidies even more, and get both developed and developing nations to in turn give U.S. ag goods greater market access. Some American farm organizations have called it risky, concerned that the U.S. is giving away too much of the farm safety net. And other ag supporters, such as House Ag Committee Chair Bob Goodlatte of Virginia, say for the proposal outlined by U.S. Trade Representative Rob Portman to work, it requires some significant give and take from other W.T.O. members. Goodlatte specifically targeted the E.U. and its current farm policies.
GOODLATTE: They have been protectionists and obstructionists form the outset. They block our corn, soybeans, beef, pork, and poultry from getting into the market no matter what the tariffs are, not matter how much they subsidize. So priority number one is that free trade has also got to be fair trade for American farmers.
But interestingly, the E.U. has been one of the biggest proponents of the Portman proposal. Its ag leaders have publicly stated that not only would they meet the U.S. challenge of farm subsidy cuts of between seventy five to eighty per cent, but would exceed them. Portman himself says the E.U. pledge is not enough. Other reaction included the other major developed nation steeped in protectionist policy, Japan, telling the U.S. they could not accept the deal, calling it too demanding. And what has been the reaction of the developing nations, especially the so-called G-20 bloc of nations that literally grounded the Cancun ministerial of the Doha Round two years ago? Days after Portman announced his deal, the reaction varied by nation. But then the head of the G-20, Brazil, spoke up. Brazilian Foreign Minister Celso Amorim called the Portman deal a good start, but one that falls short. But even if the Portman deal in its own accord fails, it has succeeded in one aspect, kick starting the Doha Round once again, by causing trading blocs and nations to offer counter-proposals. The G-10 group of developed nations wants farm support subsidies reduced by forty-five to fifty per cent. The G-20 developing nations however are demanding seventy-five per cent tariff reductions, plus seventy per cent reductions to U.S. farm subsidies, and an eighty per cent reduction to E.U. subsidies. And with less than two months before the Hong Kong ministerial, the pressure is on for some sort of trade reform deal acceptable to all parties to be reached.