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EU rejects bold US proposal to cut farm subsidies; progress on "open skies"

World trade talks are getting hot and tense. The NY Times/International Herald Tribune criticizes the EU and Japan for rejecting the US proposal that

The United States would slash the allowable farm subsidies by 60 percent. In return, Europe and Japan would cut their subsidies by 83 percent - a higher percentage because countries in Europe, along with Japan, have higher subsidies.

Farm subsidies are a major burden for tax payers and the developing world:

The developed world funnels nearly $1 billion a day in subsidies to its own farmers, encouraging overproduction. That drives down prices and leaves farmers in poor nations unable to compete with subsidized products, even within their own countries. In recent years, American farmers have been able to dump cotton, wheat, rice, corn and other products on world markets at prices that do not begin to cover their cost of production, all because of politicians - and at the expense of American taxpayers. Europe's system is even worse: U.S. farm subsidies are equal to only a third of the European Union's.

The Washington Post's Paul Blustein opines that the global trade negotiations "appear to have reached their gravest moment since the collapse of a WTO meeting in Cancun, Mexico, two years ago" and blames primarily France for opposing the liberalizing of the EU's agricultural markets:

"We are now down to days," Agriculture Secretary Mike Johanns said. "If something isn't put together by the end of this month, then I do really believe that this Doha Round is in real jeopardy. Certainly the Hong Kong meeting would be in jeopardy."

Meanwhile Reuters reports progress on solving the transatlantic aviation disputes:

The European Union and the United States have agreed key elements of a first-stage deal on an "open skies" pact, the two sides said on Friday, paving the way for opening aviation markets on both sides of the Atlantic. The talks, which restarted on Monday after fizzling more than a year ago, aim to loosen restrictions that determine where airlines can fly, boost competition, and possibly ease ownership rules to make international mergers easier to execute.