WTO: France fights US moves to cutagriculture export subsidies

PARIS, July 22 (AFP) – French authorities have mounted a spirited bid to amend a draft WTO project aimed at salvaging floundering trade liberalization talks, insisting that in its current form it harms the interests of the European Union.

French President Jacques Chirac on Wednesday dismissed the World Trade Organization proposal as “unacceptable” in its present form, notably in its call for an end to agricultural export subsidies.

“This proposal is profoundly unbalanced to the detriment of the interests of the European Union,” he said.

Prime Minister Jean-Pierre Raffarin, in a letter Wednesday to Romano Prodi, head of the EU executive commission, expressed his government’s “deeply serious concerns” about the text.

Their comments came just days ahead of a crucial meeting in Geneva July 27 and 28 of the WTO General Council.

WTO members will debate the proposed work programme in yet another effort to galvanize negotiations to reduce global trade barriers, the broad outlines of which were approved in the Qatari capital Doha by WTO ministers in November 2001.

The World Trade Organization last week released a draft work programme aimed at galvanizing the talks.

The Doha round is scheduled to conclude by the end of the year. But progress has ground to a near-halt on several issues, notably government support for farmers in rich countries that is held responsible for depressing world prices and preventing farmers in the developing world from competing on world markets.

In its draft work programme the WTO called for commitments from all WTO members “ensuring the parallel elimination of all forms of (agricultural) export subsidies … by a credible end date.”

But Chirac on Wednesday maintained that “in the agriculture domain the principle of parallelism in the treatment of all forms of export support is in particular not respected.”

In the agricultural debate, the United States has been pressing hard for the elimination of export subsidies. The European Union has agreed to scrap such support but only on condition that the United States take steps to eliminate its export credits and export credit guarantees, which the EU says likewise amount to trade-distorting subsidies.

The current draft work program does in fact stipulate that future Doha round negotiations should cover the elimination of the “trade distorting element of export credits and export credit guarantees by reducing the repayment period” to 180 days.

US government credits currently offered to farmers who want to export their produce carry a three-year repayment deadline.

But Raffarin charges that while language in the text calling for the elimination of direct government subsidies is “perfectly clear,” it is far less so regarding US export credits.

Junior Trade Minister Francois Loos, writing in the newspaper Le Figaro on Thursday, said: “We are asking for full parallelism to be restored. If the Americans agree to get rid of their credits it would be a promising start.”

Loos also said France had concluded that proposed measures on market access for agricultural products were weighted against the European Union.

Raffarin meanwhile warned that if the WTO draft were not amended, reforms to the European Union’s common agricultural policy, which governs state aid to farmers, would no longer be respected.

Subject: French news