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EU makes bottom-line trade offer, Australia, US disappointed

          BRUSSELS/WASHINGTON, Oct 29 (Reuters): The European Union yesterday offered more sacrifices on farm goods to keep a global trade deal alive-a proposal the United States and Brazil said fell short and France protested could go too far.
With a meeting of the World Trade Organisation just weeks away, the EU's executive Commission has been caught between demands for more concessions by big trading partners and a threat by France to use its veto powers to defend its farmers.
The Commission said it would nearly halve its average tariff on agricultural imports to just over 12 per cent.
The EU's proposal to classify up to 8 per cent of its tariff lines as "sensitive goods" -- meaning those tariffs would not be cut as much -- represented a substantial loophole, he said.
The United States and other countries want the EU to cut the proportion of sensitive products such as beef and poultry to just 1 per cent of the total.
Brazilian Foreign Minister Celso Amorim described the EU offer as "still pretty far" from what developing countries want to see from the talks. The WTO's 148 members are due to meet in December in Hong Kong to try to agree on a blueprint for a deal.
The lack of progress so far on farm reform means an accord originally planned to give the world economy a boost and help poor countries could flop after four years of talks.
An EU official said the new offer represented an average cut in the EU's farm import tariffs of 38 per cent.
The United States and other countries have demanded average cuts of at least 54 per cent and they rejected a previous EU offer they said meant average cuts of under 25 per cent.
But Brussels is also under intense pressure from France.
President Jacques Chirac said Thursday that Paris might veto the deal if Brussels went any further.
Mandelson said the new offer was within his mandate from EU member states, although it was at its "outer limit."
However, French Trade Minister Christine Lagarde said Paris was pressing Brussels on whether the offer was "in line with the mission that was given to the Commission and particularly is in line with the (EU's) Common Agricultural policy."
Lagarde also rejected US criticism as a "negotiating trick" and said Europe had no reason to be ashamed of its farm programmes because of reforms made in 2003.
The Commission said its new proposals were conditional and "must unlock immediate progress" in areas such as industrial products and services, of key interest to European companies.
Portman said he agreed movement was needed in the two other areas of the negotiations, but there must be much more progress on agriculture "whether the EU likes it or not."
A French source said the Commission was wrong to have allowed the talks to focus on farm concessions before Brussels had secured any equivalent gains in the other areas.
The United States shifted the spotlight on to Europe this month by announcing a long-awaited cut in trade-distorting US farm subsidies and proposing sharp import tariff cuts.
Top negotiators for the United States, the EU, India, Brazil and Australia could hold another video conference next week and are expected in Geneva on Nov. 8 for more talks.
Sydney message says: Australia joined the United States and Brazil in criticising the European Union's new trade concession today, just weeks ahead of vital meetings on trade reform at the World Trade Organisation (WTO).
Australia has been one of the leading advocates of farm trade reform, the main sticking point in long running negotiations for world trade liberalisation through the Doha Round.
The European Union said on Friday that it would nearly halve its average tariffs on agricultural imports to just over 12 per cent.


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