The right direction

It may be sparking controversy on both sides of the Atlantic, but the EU has made an important offer to reduce its internal agricultural subsidies:

Peter Mandelson offered to cut EU farm subsidies by 47% today in an attempt to prevent world trade talks collapsing, but his proposal received a cool response from both French officials and US farm groups.

The EU trade commissioner put a new offer to the World Trade Organisation (WTO) that stated Europe would reduce the highest tariff rates by 60% and eliminate all subsidies for farm exports if trading partners made similar moves at a WTO meeting in December...

The commission said its new proposals bridged the different plans tabled by other WTO members and "must unlock immediate progress in other areas of the [WTO] negotiations, particularly trade in industrial products and services"...

Agriculture has been the main stumbling block to progress on the Doha "development" round of trade talks. Unless there is a deal on farm subsidies, the prospects for progress at the WTO ministerial talks in Hong Kong in December look bleak.

Unfortunately, key actors are trying to undermine the move from both sides. France is criticizing the lowering of subsidies at all, and claiming that the E.U. lacks the authority to make the offer. The U.S., meanwhile, doesn't want to look at opening markets generally unless deeper cuts are made to agricultural subsidies.

There's little doubt that the result of the E.U.'s proposal may not be the ideal scenario for anybody...and indeed, the longer-term goal should be greater cuts to both the subsidies, and other trade barriers toward the developing world. But all parties involved should recognize the move as both a necessary step, and a useful starting point which can be built on through further negotiations.