US negotiators on 10 October presented WTO trade ministers in Zürich with an offer to cut farm subsidies by sixty per cent. EU Trade Commissioner Peter Mandelson welcomed the US's offer, adding that "the EU will match - and indeed go substantially beyond - the 60% cut in the most trade distorting support proposed by the US".
Agriculture is a strongly protected area of world trade and will be a flash point in the run-up to the Hong Kong summit in December. The EU and US are both offering cuts in tariffs and subsidies on the condition that the other side moves as well.
US trade representative Rob Portman offers to eliminate farm export subsidies by 2010. In spite of giving out 40 billion euros in farm support year, the EU argues that the 2003 reform of the Common Agricultural Policy combined with the Everything but Arms tariff cut package has left the EU with little to do. The US on its side gives annual support of 16 billion euro.
The pressure to cut farm support comes mainly from the developing nations.
