INTERVIEW-Congress may reject WTO duty-free farm plan

Original Publication Date: 
5 December, 2005

WASHINGTON, Dec 6 (Reuters) - The U.S. Congress would probably reject a proposed deal by global trade ministers to give duty-free access to the world's poorest nations if the plan does not also open new markets for American farmers, a top U.S. senator said on Tuesday.

"If that's all that comes out of (the World Trade Organization meeting) in Hong Kong, then we've accomplished nothing," Republican Saxby Chambliss, chairman of the Senate Agriculture Committee, told Reuters in an interview.

"I'm not sure that sort of deal is something that Congress would accept ... to say we're just going to open up our markets without having our farmers here have access to new markets," he added.

Reform of rich nations' farm subsidies has been a sticking point in WTO talks to lower global trade barriers, with the EU refusing to improve its tariff-cutting proposals -- deemed too modest by the United States -- until Brazil and other developing nations offer plans on lowering trade barriers in other areas. Ministers from the EU, Japan, Brazil, India and Australia last weekend thus sought to downgrade expectations that next week's meeting in Hong Kong would produce a sweeping trade agreement. Instead, the ministers said they would seek a deal on duty-free access for the world's poorest countries.

A U.S. trade official who asked not to be named said on Monday any duty-free deal for least developed nations would be broad, affecting agriculture and industrial products.

"I want to make sure we deal with developing countries in a fair and appropriate manner, but there's got to be a broader deal," said Chambliss.

Any duty-free package could be more politically difficult for Washington than Brussels because several of the world's poorest countries produce cotton and the U.S. is the world's largest cotton exporter and biggest subsidiser.

The EU by comparison is a major cotton importer that last year reformed its cotton subsidies. It has backed demands by West African cotton producing countries that rich nations -- the U.S. in particular -- offer specific concessions on cotton at the WTO talks.

"Frankly I'm extremely disappointed in the reaction of the European Union," said Chambliss, a Republican from Georgia where cotton is a major crop.

"They are trying to deflect the lack of a counter-offer on their part by saying we need to broaden this out and talk about developing countries. The crux of the deal is really the EU coming forward with something (on agriculture)."

"We should not single out any one crop for negotiation," Chambliss added.

U.S. Agriculture Secretary Mike Johanns, asked on Tuesday how the duty-free deal would work, said: "We're going to do everything we can to be a partner in this development round ... we're not far enough along to give you the exact shape of that (yet)."

Chambliss later issued a statement in which he reiterated: "This is not a free round of negotiations for developing countries and U.S. agriculture will not sacrifice while Europe continues to protect its farmers and places the future of the WTO and Doha round in jeopardy."

House Agriculture Committe chairman Bob Goodlatte, speaking at a farm conference, said his advice to U.S. negotiators in Hong Kong was -- "Walk away from it if (Europe) are unwilling to get serious about meaningful trade" reform. PUSH ON WITH FARM BILL

Chambliss said regardless of the state of world trade talks, Congress would write new legislation to replace the current farm law, a 2002 document that includes subsidies and support programs for farmers.

The current bill expires with the 2007 harvest, and about a dozen House Democrats introduced a bill last month that would extend its programs one year. This would give lawmakers time to analyze the outcome of global trade talks before writing a new U.S. agriculture policy.

"I am not supportive of extending the farm bill beyond 2007," said Chambliss, who largely controls the agriculture agenda in the U.S. Senate.

"If we don't have the conclusion of the negotiations, then that's not going to stop us from writing the farm bill. We'll have to write the farm bill in anticipation of what might come out of the WTO," he added.

(with reporting by Charles Abbott)
((Reporting by Sophie Walker; Editing by David Gregorio; sophie.walker1@reuters.com; 202-898-8376))