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U.S. Amenable to WTO Subsidy Cap

In a surprising move the U.S. shows willingness to accept subsidy limit.

The WTO trade talks received a big boost Wednesday when the U.S. offered to accept a proposed limit on trade-distorting subsidies in the range of $13-16.4 billion per year. The U.S. has never said before that they would accept a cap less than $23 billion.

Crawford Falconer of New Zealand, the chair for agricultural talks in the Doha round, says it was a constructive move. According to several WTO diplomats at the meeting, U.S. farm trade negotiator Joe Glauber says acceptance of the range is contingent on other countries agreeing to the tariff cuts on farm products that were proposed earlier this year by Falconer.

In the six years that the WTO has been working to liberalize world trade, the main stumbling block has been farm subsidies. Disagreements about farm trade have repeatedly stalled the talks.

The move by the U.S. is a major step toward completing the talks. U.S. Trade Representative spokesman Sean Spicer says the U.S. is willing to negotiate based on the current agricultural texts in Geneva, but other countries must step up as well.

Several foreign trade officials want to see what Congress has to say about the offer. Many say they see the range of the subsidy cap being a tough sale to farm groups as Congress writes the new farm bill.

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