U.S., EU Try For Farm Trade Deal

The United States and the European Union promised to try to work out a mutual position on agricultural trade issues by mid-August in hopes of salvaging floundering world trade talks.

The pledge capped a three-day meeting of 25 trade ministers from World Trade Organization member countries in Montreal.

However, while both the United States and the EU showed some willingness to compromise this week, the odds seem long that the two sides can make significant progress on an ag trade deal in less than two weeks. They remain deeply split on how much domestic farm spending, export subsidies and agricultural tariffs should be cut.

WTO negotiators will meet in Geneva on Aug. 11 for a final two weeks of talks ahead of the Sept. 10-14 WTO ministerial meeting in Cancun, Mexico.

Reuters News Service reported that in Montreal, the EU signaled for the first time that it could eliminate export subsidies for some crops, such as cereal grains , based on recent domestic reforms.

U.S. Trade Representative Robert Zoellick said the United States was willing to discuss new restraints on U.S. food aid and farm export credits to help the EU move toward a goal of eliminating all export subsidies, Reuters reported.

However, Zoellick also said the United States would continue to push for deeper cuts in trade-distorting farm payments than the 60% cut Brussels has proposed.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.