By Bruce Odessey
Washington File staff writer

Washington -- A framework agreement reached by the United States and the European Union (EU) for negotiating tough agricultural issues would allow the stalled World Trade Organization (WTO) negotiations to move forward, a top U.S. trade official says.

Allen Johnson, chief U.S. agricultural trade negotiator, made clear that the framework leaves many difficult issues to resolve even if all the rest of the WTO members were to accept it as a basis for negotiations.

"We don't pretend that it answers every question," Johnson said August 13 from Geneva in a teleconference with reporters after submitting the framework at the WTO.

Already the agricultural negotiations have missed deadlines set by ministers in 2001 in Doha, Qatar, when they launched the WTO round, divided over drastically different U.S. and EU approaches.

Johnson reiterated the importance of resolving the agricultural issues that have mounted over decades, recognizing that the impasse has stalled the rest of the negotiations.

"If agriculture doesn't move forward, nothing moves forward," Johnson said.

Ministers could decide at their September 10-14 WTO meeting in Cancun, Mexico, whether to adopt the U.S.-EU framework or some version of it. Even with a framework agreement, negotiators would face a daunting challenge agreeing on specific numbers and timetables before the deadline at the end of 2004.

"There are some really tough issues that have to be discussed," Johnson said. "You've got to fill in these numbers at some point."

The Doha agreement to launch negotiations required in the agricultural sector substantial improvement in market access, substantial reduction in trade-distorting domestic support and reductions in view of phasing out export subsidies.

According to Johnson, the framework combines elements of previously submitted U.S. and EU proposals.

Domestic support

Under the framework, Johnson said, developed countries would have to achieve reductions in trade-distorting support significantly larger than those agreed to in the Uruguay Round, with those having more trade-distorting support making a greater effort:

-- The most trade-distorting supports would be reduced by a certain range.
-- Less trade-distorting supports would be capped at 5 percent of the value of production.

Export subsidies and export credits

Johnson said the framework would achieve parallel disciplines on export subsidies and export credits as developing countries have requested:

-- Some export subsidies and credits would be quickly eliminated.
-- Others would be reduced significantly over time with a view toward eliminating export subsidies and export credits for the same commodities in the end.
-- Disciplines would cover state-trading enterprises such as the Canadian Wheat Board and any food aid that interferes with commercial markets.

Market access

Johnson said each element of the proposal would contribute to substantial improvement in market access:

-- Some tariffs would be subject to a Swiss formula for reducing the highest tariffs more than the lower tariffs, the U.S.-favored approach.
-- Other tariffs would be subject to the approach used in the Uruguay round and favored by the EU, employing average cuts and minimum cuts.
-- Substantial improvement in market access in all sectors would have to be achieved either through tariff cuts or expansion of tariff-rate quotas (where imports over the quota are subject to much higher tariffs).
-- Other tariffs would be eliminated.
-- Tariffs would be capped. Any member that wanted to avoid a cap on some item would have to negotiate an offer for lower tariffs on other items.
-- Developing countries would have some safeguard measure against lower tariffs and some sort of special and differential treatment for implementation, such as a longer schedule.

Johnson described the framework as historic in some ways.

"For the first time ... both parties agree harmonization is part of the formula and both parties agree that a cap is part of the formula," Johnson said.

"These results are a good sign for the future," he said.