EU urges US to take correct steps on subsidies

Published Jan 16, 2004

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Paris - EU Trade Commissioner Pascal Lamy urged the United States Friday to "move in the right direction" on the question of agricultural subsidies if stalled trade liberalization talks are to be revived.

Lamy, interviewed on the French radio network BFM, hailed a recent initiative by US counterpart Robert Zoellick aimed at re-starting the Doha round of trade talks this year.

Negotiations, launched in the Qatari capital Doha in November 2001, have foundered since the collapse of a World Trade Organization ministerial meeting in Cancun, Mexico last September.

Lamy said Washington now wanted to galvanize the process despite the November presidential election, a development he said "will doubtless help us get the negotiations going again."

But he insisted that "it will clearly be necessary for the Americans to do their part and they have work to do, notably in agriculture, after what we Europeans did last year to reform" farm subsidies in the European Union.

"They now have to decide and move in the right direction."

The United States and the European Union have long been divided over government assistance to farmers, with each party insisting that the other does more to subsidize agriculture.

The row has bedevilled efforts to secure a new multilateral trade liberalization accord, although the parties did manage to forge an agreement in principle ahead of Cancun.

The United States and the EU agree that agricultural export subsidies in particular should be abolished, notably as they penalize farmers in developing countries.

But Washington generall favors quicker action than the EU, which in turn maintains that the United States provides a form of export subsidy through its export credit programs for food. - AFP

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