Portman Offers 60% Reduction in U.S. Subsidies
USTR unveils new proposal calling for reduced subsidies and tariffs to move WTO negotiations forward.
Compiled by staff
Published: Oct 10, 2005
Both U.S. Trade Representative Rob Portman and Secretary of Agriculture Mike Johanns are giving the one-two punch for knocking out distorting U.S. farm subsidies.
Sunday Portman penned an Op-Ed in Financial Times unveiling a major new U.S. proposal for the agricultural agreement in the current Doha Round of the World Trade Organization negotiations that would reduce the WTO allowance for U.S. farm subsidies by 60%, of course only if other countries agree to deliver increased market access with reduced tariffs.
Thursday Johanns gave a speech before the Commodity Club outlining the need to move away from trade distorting aid to prevent the U.S. from further WTO litigations. The secretary's comments on Thursday echo remarks previously made by President Bush, stating his commitment to seeing significant reform in U.S. trade policy and the elimination of trade-distorting subsidies by transforming current U.S. farm policy from its current state.
Portman outlined several major negotiation points in his Op-Ed that the U.S. is prepared to do to jumpstart stalled negotiations. The first is to "move, and move aggressively, by supporting a 60% cut in amber box support - the most distorting type of subsidies - over the next five years." He says the U.S. is also ready to reduce by half the agreed cap of blue box payments (production-limiting policies that base payments on fixed yields and acreage fit into this category).
U.S. isn't willing to make its steep changes without significant steps from the European Union and Japan. The U.S. proposal also is asking for an 83% cut for trade distorting farm subsidies in the European Union. His proposal also calls for an end to export subsidies by 2010.
Portman wrote "an ambitious tariff reduction" agreement over the next five years would include "steep tariff cuts." The cuts are based on the formula proposed in the July 2004 framework agreement brought forward by the "Group of 20 nations, including India, Brazil and other developing countries. According to our sister publication, Feedstuffs, the "U.S. proposal seeks progressive tariff reduction, with developed countries cutting tariffs by 55-90%. The lowest tariffs would be cut 55%, with the highest ranging up to 90%." Portman is expected to make the proposal Monday, Oct. 10, at a meeting of 15 WTO trade ministers hosted by the U.S. in Zurich, Switzerland.
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