Farm trade rivals unite in battle over EU subsidies

Date: 07/05/1998

By Myles Neligan

THE EU's most powerful farm trade rivals are joining forces to put pressure on the European Commission to agree major farm subsidy cuts at next year's World Trade Organisation agriculture negotiations.

The prospect of the US and the Cairns Group - an association of 12 Australasian and Latin American countries dedicated to the removal of all agricultural trade barriers - forming a united front has already prompted Farm Commissioner Franz Fischler to ask his Cairns Group counterparts to scale down their criticism of EU farm policies until the present round of European agricultural reforms are complete.

"The Commissioner asked the Cairns Group ministers to show some understanding of the difficulties he is facing in pushing through his Common Agricultural Policy reforms," said a New Zealand trade official who attended an EU-Cairns Group meeting in Brussels last month. "He is clearly concerned that sustained external pressure might prejudice the outcome of his reform negotiations."

The first signs that the US and the Cairns Group were joining forces came early in April when American Agriculture Secretary Dan Glickman addressed the group's ministerial meeting in Australia via a video link-up.

Glickman reportedly reassured his opposite numbers that he broadly shared their objective of ending all forms of protectionism in global farm trade.

Australian and New Zealand officials described the event as "highly constructive", while a US trade attaché said: "Secretary Glickman simply told the Cairns ministers 'we believe what you believe'."

Previous attempts to bring the US and the Cairns countries together have foundered over Washington's use of export credit guarantees to stimulate sales of American meat products in South East Asia. The US has also frequently protested against the allegedly anti-competitive practices of Australia's state-owned wheat trading board.

But the two sides have now agreed to concentrate on their common objective of bringing about a global free market for farm products. They are expected to step up their combined diplomatic pressure on the EU, which maintains the highest level of farming subsidies in the world, between now and the start of the WTO farm trade liberalisation talks in 1999.

The Cairns Group agriculture ministers plan to hold a meeting in the margins of this month's preparatory round of WTO farm talks, and regular contacts will continue between senior officials from the 12 countries thereafter.

"The idea is to coordinate our respective positions so that we can get down to substantive negotiations right from day one when the formal WTO talks begin next year," explained one.