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US 'worried' over developing countries grouping

The US Deputy Trade Representative said the US delegation was "perplexed" about why and how this group of countries came together.

business Updated: Sep 12, 2003 14:20 IST

The US remains committed to an ambitious set of agricultural reforms but is unclear about the objectives of a group of 21 developing countries, including India and Brazil, that is putting an alternative agriculture proposal as the basis for negotiations in Cancun.

Briefing reporters, Deputy US Trade Representative Peter Allgeier said the US delegation at the World Trade Organisation (WTO) ministerial meet here was "perplexed" about why and how this group of countries came together.

Nearly half of the group are members of the Cairns Group of agriculture-exporting countries that have been pressing for ambitious results in opening agricultural markets, a position quite close to that of the US.

For example, the Cairns Group has been pressing a "Swiss formula" approach to tariffs that would reduce the highest rates more drastically than the lower ones and set a cap on tariff rates.

Some others in the group, like India, have engaged reluctantly in agriculture reform, favouring an approach where all tariffs come down by the same proportion, Allgeier said.

The developing countries group that joined in submitting the alternative proposal comprises Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, India, Mexico, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Venezuela, joined later by Egypt.

On another issue, Allgeier said the opposition of Japan and other countries to putting caps on agricultural tariffs was "odd" given that bounding tariff rates is a WTO core principle. Japan's tariff on rice approaches 1,000 per cent.

Allgeier also said he expected the Cancun meeting to reach a deal satisfying four sub-Saharan African countries -- Benin, Burkina Faso, Chad and Mali -- that have proposed elimination of subsidies to cotton producers, a proposal aimed mostly at the US, the European Union (EU) and China.

"I think people are gaining an appreciation of the fact that this is a complicated issue," Allgeier said.

The US delegation has been working with the four countries on a broader proposal that would cover not only cotton but also man-made fibres, textiles and apparel, and address not only subsidies but also other barriers.

Allgeier said the main focus of the US remained on market access in all three areas of agriculture, non-agriculture and services.

"I'd like to particularly remind people that agriculture has three pillars and it is important that all countries have responsibilities in those three pillars.

"In the case of the US, we made clear more than a year ago that we are prepared to eliminate export subsidies, that we are prepared to cut drastically domestic supports, and we are prepared to open very significantly our markets."

"This, of course, is in a context that other countries that have significant barriers or have significant degrees of subsidies are doing the same so that we get to a level playing field for all countries," he said.

In the case of the US, "in market access, we specifically see tariffs on agriculture that are four to five times as high as our tariffs on agriculture. And, as you know, we are competing with countries that are allowed under the WTO to have two to three times the degree of domestic supports, not to mention the vast differences in export subsidies on the part of our trading competitors."

Regarding the US position on the Singapore issues, he said: "Number one, we believe that it would be appropriate after Cancun to move into a negotiating phase for each of the four Singapore issues. We believe, however, that they differ from each other in terms of how much work has been done, and the degree of consensus that there is on the negotiating modalities.

"It appears to us that there is a much greater degree of consensus on modalities for transparency in government procurement and trade facilitation than in the other two issues (investment and competition policy).

"We are prepared to work with all countries, including those such as Japan and the EU, that are most seeking these negotiations in investment competition policy, and also with other countries -- developing countries -- who are most skeptical about it if we can find some appropriate negotiating modality."