There's no doubt that negotiations under the World Trade Organization are becoming more influential in domestic policy. That's because developing nations want farm subsidy payments reduced or eliminated in wealthy nations as a condition of the talks.
Last week's proposal by the U.S. to cut those payments by up to 60 percent shifted pressure for concessions to Europe, where substantial subsidies long have been the rule in farm policy.
The WTO's 148 members are supposed to agree on an outline for a global trade deal by the end of the year. Ministers hope the agreement will boost the world's economy by lowering trade barriers across all sectors, with emphasis on developing countries, for which farm subsidies are particularly sensitive. Developing countries want the U.S. and EU to reduce trade-distorting subsidies and lower trade barriers to allow them access to their markets.
In the Geneva meeting, WTO chief Pascal Lamy said the EU and the U.S. must show flexibility in agriculture talks for the global trade agreement to be successful. He asked that European farmers be prepared to open up their agriculture markets to more imports. He also urged the U.S. to cut subsidies to its farmers. Lamy stressed the importance of fair competition.
European farmers worry that the EU will make excessive concessions, causing what they fear would be a flood of imports from the world's poorest nations. Leading the opposition is France. French farmers have a history of rejecting cuts in farm aid. The EU allocates some 40-percent of its budget to farm subsidies. The last reform of the EU's Common Agriculture Policy came two years ago, and farmers oppose any further changes.
Last week, the U.S. offered to reduce its agriculture tariffs and subsidies, putting pressure on the EU to ease access to its own market. EU ministers claim they are gaining support from a number of European countries, and promise WTO partners that they will continue to show flexibility. The WTO talks will resume in December in Hong Kong.