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US-EU paper necessary but needs more work

Trade Negotiations Minister Jim Sutton today described a new United States and European Union joint paper on agriculture as a necessary step at this stage in the Doha WTO Round negotiating process, but expressed deep concerns about what the two countries were proposing on export subsidies and market access.

Mr Sutton said that agriculture was the "troubled heart" of the Doha Round.

"We missed a major deadline to agree the framework, or "modalities", for the agriculture negotiations earlier this year. We're only a month out from the critical WTO Ministerial Conference in Cancun, Mexico, that marks the half-way point in the Round. We simply must find a way forward to deliver on the ambitious reforms we all agreed at Doha."

Mr Sutton said that during the meeting on the Doha Round that he and about 20 other Ministers had attended in Montreal last month, those present had agreed that the US and EU, as the two largest players in the global agriculture trading system, should go away and work on a way forward for the agriculture negotiations.

"The US and EU have put in a lot of effort. I'm sure we all appreciate that. But we have to keep in mind that those countries are the major subsidisers in the world. Without the insertion of some big new numbers, this paper could prove to be a recipe for allowing subsidy-bloated European and American farm sectors to ride roughshod over efficient, unsubsidised producers for another generation."

Mr Sutton said he was deeply concerned that what the big players were proposing failed to measure up against the benchmark of the Doha mandate.

"On export subsidies, the paper doesn't live up to the clear agreement at Doha that export subsidies are to be phased out. That is not acceptable. The only thing up for discussion should be the date.

"Export subsidies are the most damaging of all agriculture measures. They cripple developing countries and efficient producers such as New Zealand alike. Almost every WTO Member wants them eliminated that are what we all agreed at Doha. This is probably the single most important element of what we all agreed would be a 'development' round.

On market access, Mr Sutton expressed similar disappointment.

"The US and EU paper is vague and ambiguous. They have set out an approach that could let them shield the most politically-sensitive products, like dairy products, meat, sugar and rice, from reform. To carve out dairy and meat would carve out the heart of the New Zealand economy."

Mr Sutton said that the next two weeks would be crucial.

"I've asked my officials to keep working in Geneva, using this US/EU paper as an input together with the Chair's own draft "modalities" document, to try to develop a detailed agriculture text that Ministers can consider in Cancun.

"The Doha Mandate recognised the need for a new approach to world agriculture trade. This is of great importance to New Zealand and to developing countries. We want to work now to see that mandate realised."

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