Progress Made in Trade Tariff Reduction Cuts Thanks to EU, US Lead After G8 Summit Talks

Significant progress was made Tuesday with ministers from around the world agreeing to a formula for cutting farm import tariffs, a major stumbling block in ongoing World Trade Organization trade talks.

Spurred my steps forward taken at last week's G8 summit, the United States, the European Union and Japan all agreed that a proposal submitted by Brazil-led Group of 20 developing countries made a good starting point for serious negotiations after months of stalled talks.

According to wire reports, U.S. Trade Representative Rob Portman says the formula provides the basis from which negotiators can find a middle ground to move forward. "The G20 initiative is a compromise between the EU, which favoured a uniform cut in all farm tariffs, and agricultural exporters such as Australia that wanted high tariffs to be cut the most in order to maximise their market access," Reuters reports. "The G20 plan groups tariffs into five bands and then subjects them to a uniform cut."

A new level of optimism was birthed from the European Union and United States' willingness to consider alternatives, says Indonesian Trade Minister Maria Pangestu. The EU says it will keep pressing for the across-the-board cuts to be administered flexibly. Japan, who puts a 500% tariff on rice imports, says it'll reject a proposal to cap farm tariffs at a maximum 100%.

WTO Director-General Supachai Panitchpakdi, who has urged the timeliness of the talks, says he remains pessimistic--but wants to be proved wrong.