US may offer to trim farm subsidies for greater market access

14 March 2007

US negotiators in world trade talks might consider capping farm supports far below their current offer of $22.5 billion, perhaps even less than $15 billion, industry and private sector sources said, adding that the farm groups are certain to fight any such trade deal unless they get significant market access in return.

Exports account for almost a third of US farmers' cash receipts. Almost 40 per cent of soybeans, 20 per cent of corn and 60 percent of cattle hides from US are shipped abroad.

Finding new markets for these goods, especially in emerging markets in Asia, is key in rallying US support for the Doha Round of world trade talks.

Washington has also put itself in a tight corner by telling farmers that it will sacrifice subsidies only for larger gains in tariff cuts from other countries.

That strategy is facing opposition from the G33 bloc of developing countries, led by India who demand protection to 20 per cent of tariff lines from full cuts against more than the five lines the US would like to see.

Europe, meanwhile, wants to shelter 8 per cent of its tariff lines against the US view that one percent would do.