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USTR Supports Aggressive Stance on Agriculture Trade

The United States must take a more aggressive stance in its approach to agriculture trade, focusing on other countries' policies rather than defending its own, U.S. Trade Representative Robert Zoellick says.

During a July 22 televised briefing for reporters in Washington Zoellick said the United States wants to play a leading role in the World Trade Organization (WTO) negotiations in Geneva to "maximize" its interests.

"We have a lot to gain, but we won't accept efforts of others to try to define this negotiation in a way as if it were just about U.S. farm policies," he said.

Zoellick said that the European Union (EU) and Japan have to lower their much higher production-related subsidy levels before the United States reduces its own. He said the Bush administration is moving to submit a relevant proposal at the WTO negotiations by September.

The WTO has capped production-related subsidies at $60,000 million per year for the EU, $30,000 million for Japan, and $19,000 for the United States.

"What we want to do in these negotiations is to harmonize and equalize [subsidies] at a lower level and eventually eliminate them," Zoellick said.

That is also true with tariffs, he added. With the average world tariff on agriculture products at 62 percent and the average U.S. tariff on the same products at 12 percent, the United States will be willing to reduce its duties, if others do, Zoellick said.

The United States has already tabled in Geneva a proposal to eliminate export subsidies over five years.

"Our long-term goal is to eliminate production-distorting subsidies," Zoellick said. "But we want to start by getting it in export subsidies."

As for export credits, Zoellick said that in contrast to the EU, which supports their reduction, the United States is trying to put forward a policy of disciplines to ensure that credits are market-based. He added that some countries back the U.S. approach.

Zoellick said that a European Commission initiative to change European agriculture subsidies is "a good step." He emphasized, however, that even if EU countries adopt the proposed changes it would not reduce overall EU spending on subsidies because the commission plan is to reduce funding levels in production-related areas while increasing them in other areas by the same amount.

According to news reports, the European Commission proposes introducing a flat-rate payment to farmers based on previous production and other factors and capping payments to the biggest farms, with savings directed to rural development programs.

Nevertheless, Zoellick said, U.S. negotiators can take advantage of EU willingness to change its 40-year-old subsidy system by taking an aggressive posture on subsidy issues in the WTO negotiations.

Zeollick and Secretary of Agriculture Ann Veneman, who also answered questions from reporters, commented on a current rift with Russia over U.S. poultry exports to that country. Veneman said that "considerable progress" has been made in the ongoing discussions with Russian representatives aimed at addressing Russian health and sanitary concerns. She said she does not believe there is anything unsafe in the U.S. poultry supply system, so she hopes that the problem will be resolved soon.

But Zoellick said that U.S. patience is running out, and if Russia is unable to reach an agreement "rather soon", then "we have to look at other steps, including potential trade retaliation." Zoellick added, however, that the U.S. side has to answer the questions about U.S. poultry raised in the Russian press because "otherwise consumers will not buy the products."