Washington, June 30: The United States has proposed to the World Trade Organisation a sweeping set of trade reforms on farm products aimed at leveling the international playing field by limiting "trade-distorting" farm supports, the Clinton administration said on Thursday.The proposal, which was presented at World TradeOrganisation headquarters in Geneva this week, takes direct aim at the European Union, a long-time adversary of the United States in agricultural trade talks.
The proposal would limit farm supports to a fixedpercentage of each trading country's agricultural production, which are currently as much as 74 percent.
According to the Organisation for Economic Cooperation andDevelopment, EU support for its farmers equalled 49 percent of the community's farm output in 1999.
Japan and South Korea, which had support levels of 65percent and 74 percent, respectively, would also be hard hit by the U.S. Plan.
U.S. Support for farmers was 24 percent of its agriculturalproduction in 1999, still one of the highest in the world, according to the OECD, a Paris-based organisation of 29 mostly industrialised nations.
In a joint news conference, U.S. Trade Representative Charlene Barshefsky and Agriculture Secretary Dan Glickman said the U.S. Proposal was aimed at eliminating the wide disparity in the amount of agricultural support allowed under the 1994 Uruguay Round trade pact.
Once the 1994 agreement is fully implemented this year, theEU will still be able to spend up to $80 billion annually on trade-distorting farm programmes, while the United States is limited to less than $20 billion, U.S. Aides have said.
The United States has also proposed to change the WTOclassification system for farm programmes, which many U.S. Groups feel unfairly favours the EU.The U.S. Plan would create just two categories, instead ofthe current three, effectively eliminating the so-called "blue box" which exempts many EU programmes from spending limits.
Under the U.S. Proposal, programmes that encourage productionor otherwise distort trade would be reduced annually down to a fixed percentage point of domestic production, the U.S. Officials said. The exact percentage point would be subject to the negotiations, but the same for all countries.
Other farm programmes with little or no effect on trade wouldbe exempt from WTO spending limits, similar to the current WTO "green box" category, Glickman and Barshefsky said.
Other elements of the U.S. Proposal, which Barshefskypreviewed earlier this week in Paris, include:
The elimination of agricultural export subsidies.
Substantial reductions in all agricultural tariffs andincreases in tariff-rate quotas in all markets.
Disciplines on the use of export restrictions andembargoes on agricultural products.
Disciplines on state-trading enterprises, such as theCanadian Wheat Board and the New Zealand Dairy Board, which often have monopoly power over exports or imports.
Proposed rules ensuring market access for geneticallymodified crops and other new products of technology.-- (Reuters)
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