Top Bush administration officials have cautiously praised the European Union (EU) decision to reform its Common Agricultural Policy farm subsidies program, adding that the EU must still submit negotiating proposals to the World Trade Organization (WTO) agriculture negotiations.

In a June 26 statement, U.S. Trade Representative Robert Zoellick and Secretary of Agriculture Ann Veneman said they hoped the compromise EU reform announced earlier that day does not in practice limit EU participation in those agriculture negotiations.

Zoellick has many times described the agriculture negotiations as crucial to the success of the broader negotiating round launched by trade ministers in Doha, Qatar, in September 2001 and scheduled to conclude by 2005.

He said the EU should promptly submit proposals in the three key areas of WTO agriculture negotiations -- reducing domestic support, eliminating export subsidies and cutting tariffs. EU domestic support and export subsidy levels exceed those for U.S. agriculture many times over.

According to published reports, the CAP reform proposal would substantially, but not completely, decouple domestic support from production and link them instead to compliance with environmental and other standards.

June 26, 2003

"Today's decision by the EU to reform its Common Agricultural Policy is a necessary step forward that we hope will provide a useful impetus to the WTO negotiations. We appreciate the work of Commissioners Fischler and Lamy, backed by EU Member States, in taking this action. We hope that the compromises that altered the original Commission proposal do not limit the EU's ability to contribute to global reform in agriculture.

"The next critical step is for the EU to promptly translate today's decision into meaningful WTO proposals in the three core areas agreed in the Doha declaration: harmonizing and substantially reducing trade-distorting domestic supports, eliminating export subsidies, and substantially improving market access through tariff reductions. Without new EU agricultural proposals in the WTO, the world cannot fully assess the impact of CAP reform.

"It is crucial that the EU press forward with significant agricultural trade reform promptly so that we can work with the EU and others to advance WTO negotiations at the next Ministerial Meeting in Cancun in September.

"The Doha Development Agenda offers the world a once-in-a-generation opportunity to spur economic growth and development. There is a broad consensus among WTO members that reforming global agricultural trade is key to Doha because of agriculture's vital importance to so many countries, particularly developing countries.

"The United States believes that the WTO agricultural negotiations must be ambitious and provide real reform and improved market access for U.S. farmers and ranchers. That's why we've proposed to eliminate export subsidies, slash global agricultural tariffs, and cut $100 billion [$100,000 million] in annual trade-distorting domestic farm support in a fashion that harmonizes the limits at much lower levels. We've joined the voices of reform in the developing world in calling on others, particularly those with the largest subsidies, such as the European Union and Japan, to embrace reform."