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Corn+Soybean Digest

Critical WTO Talks Underway

Developed and developing nations squared off at critical World Trade Organization (WTO) talks on Monday, with each side charging that the other must make concessions in order for a global free trade deal to occur.

The U.S. faces pressure to make bigger cuts in trade-distorting farm subsidies. "We know we're going to need to make further contributions than the many contributions we already have put on the table," U.S. Trade Representative Susan Schwab told a news conference.

But a deal is possible only if large emerging markets such as China, India and Brazil open their agriculture, manufacturing and services markets to more foreign trade, Schwab said.

"We are looking forward to seeing the contributions of others," she said after an opening session with trade ministers from about three-dozen member states of the WTO.
European Union (EU) Trade Commissioner Peter Mandelson even implied an ultimatum, saying he had gone out on a limb on agricultural trade and stressing that agreement was now conditional on developing countries making "real" cuts in their industrial tariffs.

The commissioner earlier on Monday revealed the EU was ready to extend proposed cuts in its tariffs on agricultural imports to 60% from 54%. But Mandelson’s offer was dismissed as "propaganda" by Brazil, a key emerging market player.

Indonesian Trade Minister Mari Pangestu, speaking on behalf of the G33 group of developing countries, insisted it was up to industrialized nations to make an effort to reach a deal.

"We are looking for a concrete offer on the table which hasn't come out yet. We are looking for U.S. leadership on this issue," Pangestu said.

Developed country hopes for increased exports must take a back seat to development goals of the round, Pangestu said. "The development aspects are crucial, otherwise why call it a development round?" she told Reuters News Service, referring to the talks' formal title, the Doha Development Agenda.

The latest text of the proposed deal requires the U.S. to cut its spending cap on "overall trade-distorting support" to a range between $13 billion and $16.4 billion, from the current ceiling of $48.2 billion.

The draft text also requires Washington to cut its most trade-distorting farm programs by 60%, from a current cap of $19.1 billion down to a new ceiling of $7.6 billion.

But high prices have cut U.S. farm program spending dramatically in recent years, and leading developing countries such as Brazil and India want a new U.S. ceiling closer to current outlays of approximately $7 billion.

Meanwhile, the EU is under pressure to cut its farm tariffs and limit the number of "sensitive" products that would be shielded from the deepest tariff cuts.

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