MercoPress. South Atlantic News Agency

World Bank proposes 75% cut in farm tariffs

Developed countries must cut their highest farm tariffs by 75% if the world's poorest nations are to benefit from a World Trade Organization (WTO) attempt to liberalize agricultural trade, said experts at the World Bank.

"Unless you have a 75% cut in the highest tariffs there would be very little outcome at all" said Will Martin lead economist of the World Bank development research group. WTO members are due to meet in Hong Kong, December 13/18 to put together a deal that would lower global trade barriers in an attempt to lift millions out of poverty. But efforts to agree first on cutting rich nations' farm subsidies and duties have run into trouble.

Market access, or lowering duties on imported farm goods, is a major sticking point. The United States is calling for cuts of 90% on the highest tariffs conditioned to similar cuts from Europe and Japan and the EU is saying it would only go to around 50% on its top tariffs.

"A 50% cut in tariffs is nowhere near enough," Martin said. "The 75% would generate global welfare gains of about 75 billion US dollars out of a potential welfare gain of 182 billion if you had complete liberalization of agriculture."

Citing figures from research just completed by the World Bank, Martin added this scenario envisaged no special protection for particular commodities, or politically sensitive products.

Excluding even two percent of sensitive products from tariff cuts "was basically giving away the game - the welfare gains dropped from 75 billion down to 16 billion," Martin said. The EU has proposed limiting sensitive products to 8% of tariffs.

On Wednesday United States president George W. Bush warned that WTO negotiations are at a critical point and called on other countries to equal the US tariff reduction proposal.

Addressing The Economic Club in Washington president Bush said that his administration had presented an "energetic proposal" with the purpose of revitalizing the WTO agenda on farm subsidies.

"Now it's up to other countries to come forward with similarly ambitious proposals", he insisted.

"Together we have a historic opportunity to knock down trade barriers, promote economic growth and reduce poverty", added the US president without mentioning the European Union which the US blames for the agriculture negotiations stall.