June 12, 2006

WTO chief meets US farm groups, hears concerns

By Sophie Walker

WASHINGTON (Reuters) - World Trade Organization chief
Pascal Lamy met U.S. commodity groups on Monday to hear their
concerns about global trade talks where the United States faces
pressure to make deeper cuts to its farm subsidies.

Lamy declined to comment to reporters on exiting the
meeting. He met representatives from crop and dairy
organizations, which recently urged President Bush not to give
in to other WTO members' demands that the U.S. improve its
current offer in the agricultural negotiations.

The 149 members of the WTO are running out of time to reach
a deal to reform trade-distorting farm tariffs and subsidies as
part of attempts at a wider pact to slash all trade barriers
and boost the world economy.

The United States has offered to cut its WTO allowance for
its most trade-distorting farm subsidies by 60 percent,
conditional on other countries opening up their markets. But
the European Union and others say they will only present
counteroffers to slash their farm import duties if the United
States cuts deeper into its own programs first.

"Director General Lamy is here to assess the (U.S.)
agriculture industry's concerns about where the negotiations
are and our desires for what constitutes a successful outcome,"
said Bob Stallman, president of the American Farm Bureau

Industry sources told Reuters recently that U.S. farm
groups reacted negatively at a meeting with trade officials at
which soundings were taken for a possible 70 percent cut in
their subsidies in order to sweeten the U.S. WTO offer.

Stallman said the meeting with Lamy on Monday had been
friendly, adding the WTO director general said he had seen the
letter sent by the farm groups to Bush and "made it very clear
it was not his job to try to convince people, but to listen."

Asked whether American agriculture would accept deeper cuts
to its subsidies if it meant U.S. negotiators were able to
deliver the market access it needs, Stallman replied: "We will
have to have an economically positive benefit for U.S.
agriculture (in the trade talks)."

"That means the additional market access we get for our
products has to offset, or more than offset, the cuts that we
take in our domestic supports," he added.

Lamy recently set an end-June target for a deal to cut
tariffs and subsidies in both farm and industrial goods and
ministers are due to meet in Geneva on June 29. The heat is on
because of the expiration next year of Bush's powers to send
any deal to a straight "yes" or "no" vote in Congress.

Stallman said he was considering whether to go to Geneva
for the ministerial meeting.

"It looks like it might be necessary to be there. We have
to make an assessment ... whether something is going to be
happening where U.S. negotiators may need to seek guidance from
us," he said.

"If we're not there defending our position with our
negotiators no one else is going to be doing it for us."

Lamy was scheduled to meet Senate Finance Committee
Chairman Charles Grassley on Monday afternoon. He will meet new
U.S. Trade Representative Susan Schwab Monday evening, a USTR
spokeswoman said.