*EPF503 10/25/2002
Zoellick Sees Strong APEC Support for Free Trade
(Hails statement on eliminating agriculture export subsidies) (620)

By Berta Gomez
Washington File Staff Writer

Los Cabos, Mexico -- U.S. Trade Representative Robert Zoellick says the 21 economies of the Asia-Pacific Economic Cooperation (APEC) forum have sent a strong signal of support for trade liberalization by agreeing that World Trade Organization (WTO) talks should aim to eliminate all agricultural export subsidies.

Speaking to reporters October 24 following a series of meetings leading up to the October 26-27 annual gathering of APEC leaders, Zoellick said he was "encouraged" by the ministers' discussion of the multilateral trade talks launched at the November 2001 WTO meeting in Doha, Qatar.

APEC member economies are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

In their fourteenth annual joint statement, APEC ministers pledged to work to ensure that the structure of WTO agricultural negotiations is established by the target date of March 2003, and agreed that "one of the objectives of such negotiations should be the abolition of all forms of agricultural export subsidies and unjustifiable export prohibitions and restrictions."

Zoellick said the issue of export subsidies was of special concern to many developing countries, as well as to the United States, "because it's the most distorting form [of domestic support]; it's the one that influences the trade system the most."

"We hope this will send a strong message to the other major countries around the globe that we're eager to negotiate to move the Doha agenda forward, that we're sitting at the table, and for those countries that have not yet come forward with proposals -- the major economies -- we hope this will press them to do so," Zoellick said. He noted that the United States had submitted to the WTO a comprehensive proposal for reforming global agriculture trade. The two-phase plan calls for eliminating export subsidies over a five-year period and removing disparities between countries through substantial reduction in tariffs and trade-distorting support in the first phase. It urges countries to end all trade-distorting subsidies by a date established in the WTO negotiations in the second phase.

Zoellick said the U.S. proposal had been fashioned after close consultations with the domestic agriculture industry, which has long argued that it would accept lower subsidies if U.S. trading partners -- in particular Japan and the European Union -- would do the same. He reported that in a recent meeting of the Cairns Group of agricultural exporting counties, trade ministers had expressed "strong common cause" with the U.S. proposal for comprehensive reform, and underlined that neither the EU nor Japan has come forward with a proposal on agriculture.

The U.S. trade representative also explained that current U.S. agriculture subsidies fall within permitted WTO levels and are significantly below those paid by governments in Europe and Japan. Asked to comment on the 2002 U.S. farm bill, Zoellick said he was "still working to dispel EU propaganda" suggesting that the legislation would result in higher agriculture subsidies. The subsidies provided for in the bill, he said, are in fact 20 percent lower than those the U.S. government has provided farmers in recent years through annual supplemental legislation.

The "real test" of the 2002 farm bill, he said, will the Bush administration's ability to maintain "discipline" with respect to requests for annual supplemental subsidies.

Asked about progress on a possible U.S.-Australia free trade agreement (FTA), Zoellick said the United States was "very interested" in pursuing such a pact. He acknowledged the existence of some "sensitive agriculture issues" that both countries would first have to resolve, but added: "We value the U.S.-Australia relationship a great deal, in commercial terms, in political terms, and certainly in security terms."

Zoellick said he would be in Australia in November and hoped to make some progress on the issue at that time.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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