Farm Bill and WTO GATS Part 2

The NYT reports:

The World Trade Organization made a last-ditch effort on Tuesday to salvage stalled global trade talks by asking the United States and Europe to lower their barriers to farm imports in return for greater export access to India, Brazil and other developing countries.

Pascal Lamy, director general of the World Trade Organization, said the group was trying to goad negotiators into making some compromises.
A long proposal laying out possible compromises by 150 countries involved in the talks was issued at the World Trade Organization’s headquarters in Geneva. Officials said the draft was aimed at breaking a deadlock on issues that have eluded compromise since last summer.
Pascal Lamy, director general of the trade group, said the goal was to goad negotiators by laying out ambitious compromises they had been unwilling to make, in part because they did not see compromises by others. He said it would not be clear until September whether the new proposals would accomplish that goal.
The proposal was careful not to assign blame, but it also said time was running out on the possibility of a global trade deal. It was generally acknowledged to be a final attempt to save the talks, with the expectation that they would be declared a failure if it did not succeed.

NYT reports on complaints issued by Brazil about US farm subsidies, especially commodities.

The stalled talks are emphasizing a deeper issue: In some ways, the balance of power between advanced and developing countries is shifting, politicians outside the West, including Mr. Nath, say. “The reality is that there is a new economic architecture,” Mr. Nath said in an interview this week in his New Delhi office. “This new economic architecture is going to have new windows and new doors. It can’t be wished away.”
India and Brazil are refusing to open their markets further to goods from Western countries without a substantial reduction in subsidies provided to Western farmers.
On Thursday, Brazil filed a complaint with the W.T.O. about American farm subsidies. “This complaint attacks the entire U.S. farming policy,” Donizeti Beraldo, head of trade and international affairs at Brazil’s National Agriculture Confederation, was quoted by Bloomberg News as saying. Then, referring to the trade talks, Mr. Beraldo added, “If the U.S. fails to advance on talks, they will be at risk of more complaints.”
W.T.O. members are preparing for what is expected to be a decisive round of negotiations at the group’s headquarters in Geneva. On Monday, the presiding officers will release draft agreements that could form the basis of a compromise or, depending on the view of countries like India, give a firm indication that the current round of trade talks begun in 2001 is on its last legs.
Mr. Nath, whose office includes a shelf of thick W.T.O.-related publications, was quick to brush off questions about his flexibility, but still left no room for compromise.

The issue is not flexibility, he said: “It is removal of subsidies, which are a distortion of global trade…”

India and Brazil are asking the United States to reduce the estimated $22 billion in subsidies that it allots to farmers, and the European Union to trim its farm aid from 55 billion euros ($75.8 billion), saying the subsidies keep food prices on world markets artificially low and make it difficult for farmers from developing countries to compete.
Advanced industrial nations would like to see a substantial reduction in the taxes on exports to countries like India and Brazil to give their manufacturers access to those fast-growing economies.
Mr. Nath said he is seeking some understanding from the United States. Despite the growth of outsourcing and high-technology jobs in India in recent years, agriculture still supports about two-thirds of the country’s citizens.

India is in the midst of an economic boom that has driven up stock market indexes, wages and real estate prices to near record highs. Still, Mr. Nath was quick to distance the country from developed- nation economies.
India “is so far away from the United States and the European Union,” he said.
“We have 300 million people that live on $1 a day…”

Mr. Nath’s hard line in the W.T.O. talks was in marked contrast to his three-year stretch as commerce minister. There, his tenure has been characterized by an increasing openness to foreign investment and partnership at home. He has sometimes faced criticism that he is too business-friendly. (italics are mine)

Add the gambling issue that is being backed by the EU. Changes and more. Tariffs are not the answer.