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The U.S. trade rep breaks a stalemate with the E.U. by offering to slash subsidies by 2010:

The US will on Monday offer to end farm export subsidies in five years and slash its domestic subsidies by more than half, in an attempt to revive the flagging Doha round of trade talks.

The US proposals will be discussed at a meeting of trade ministers in Zurich, just nine weeks before a crunch ministerial meeting of the World Trade Organisation in Hong Kong…

Mr Portman also agrees to cut those domestic farm subsidies believed to distort world trade by 60 per cent, higher than the 55 per cent reduction the EU was demanding from the US.

Whole Financial Times article here.

I discuss farm giveaways here. Reason's Ron Bailey laments the failure of the last round of talks here.

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  1. Re: Kerry’s article – So, the US taxpayers are forced to buy out surplus US crop yields. We then pay to have that food shipped to a developing (but not starving) country. We give it to their government, who then sells it at a below-market price, in order to fund development projects…and the normal merchants in that country for those food items are essentially put out of a job.

    What a country we live in!

  2. “I discuss farm giveaways here. Reason’s Ron Bailey laments the failure of the last round of talks here.”

    When do you discuss empty promises to the EU or UN that aren’t kept “in five years”. I bet the guy could promise 100% reduction in 20 years too. Then France and Germany will promise better deficit control, China and Russia true democracies, and North Korea will be nuclear free in 5 years.

  3. Maybe it’s just my imagination, but didn’t the US significantly cut ag subsidies several years ago only to see George “Smaller Government is My Middle Name” W. Bush bring them back bigger and badder than ever before?

  4. Like we’re ever going to cut subsidies to a bunch of guys that have pictures of congressmen with farm animals.

  5. Cut subsidies? Yeah, right. Agribusiness has its claws around the balls of too many congress-critters for that to ever fly – and since it’s conditional on concessions being made by everyone else on the damn planet, it will never have to… how convenient.

  6. Hold on. We’re not just offering to cut subsidies unilaterally. It’s part of a trade deal that would cut the EU’s subsidies as well. So there is an upside for American agribusiness.

  7. “Developing countries must also offer contributions, commensurate with their role in agricultural trade” – so sez the US trade rep. My guess is that even if the US and EU bluff each other into cutting subsidies (and I’m doubtful even of that), the whole thing will be scuppered by the rest of the world telling them to sod off.

  8. Joe, there is no way that CAP is going to be reformed. So, no this isn’t going to help American agribusinesses.

  9. and no way the US will really drop its protectionistic tendencies, either. The CAP is a big target, but we have enough problems in our farm belt to worry about the CAP. sugar, mr poon?

  10. The cuts’ advertised size is misleading – http://www.inquit.com/491/proposals-for-farm-trade-reform-surface

    “But a big caveat emptor sign should hang over this haggling: these numbers are much slipperier than they seem. Take, for example, the EC offer to cut AMS by 70 percent. The ?baseline? from which they?ll cut?the number that they?ll hack to only 30 percent of its current size?is the bound level of amber box support that they agreed in 1995 (the end of the Uruguay Round) they would reach by 2001.”

  11. Hold on. We’re not just offering to cut subsidies unilaterally. It’s part of a trade deal that would cut the EU’s subsidies as well. So there is an upside for American agribusiness.

    My understanding is that the United States exports agriculture the way the Japanese used to export automobiles.

    …My understanding is that the reason the EU subsidizes agriculture is because their ag industry is relatively inefficient. …This is also, I understand, the force behind EU objections to “frankenfoods”. American subsidies, on the other hand, are just giveaways, pure and simple.

    If the EU dropped its farm subsidies, it could squander money on all kinds of other more politically desirable inefficiency.

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