US may adopt aggressive attitude to next WTO talks due to attacks and lower agriculture prices

The US government could adopt a more aggressive attitude to the next round of the World Trade Organisation talks following the atrocities in the US and given low agricultural prices, a conference in Galway was told yesterday.

Mr Greg Frazier, former US chief agricultural negotiator during the Clinton administration, told the Agricultural Science Association conference that the US would continue to seek an end to EU food subsidies.

"US agriculture approaches a new round much more predisposed towards conflict than compromise," he told the 300 delegates attending the conference. The Minister for Agriculture, Mr Walsh, said he was "tired of being lectured" by elements within the WTO negotiations about a system of supports, which was vital to Irish farmers.

He said the US had very substantially increased its support for its farmers over the past decade, by as much as 400 per cent - from $7 billion (€7.8 billion) in 1995 to $32 billion in 2000. Europe had switched its supports away from produce to the farmers themselves and, with almost 70 per cent of farm income coming in cheques in the post, that had to be protected.

Ireland was also the largest exporter of cattle and beef in the Union and it was vital that export refunds remain in place so as to protect our markets.

"The US has very substantial supports for its farmers although they are not as transparent as the ones we have in place in the Union," he said. Direct supports to US farmers from their government stood at $16,000 last year, while the corresponding figure in Europe was $3,000, he added.

EU export refunds accounted for only 9 per cent of the CAP's expenditure, compared to 25 per cent in 1992 - and this percentage would fall further. "Over the past two years, US export credit guarantee programmes have supported sales of more than $7 billion of US agricultural products," he said, adding that the US accounts for half of world export credits and 88 per cent of the estimated total global global subsidy element.

An OECD report said the US "is the country which accounts for the largest share of estimated distortions from export credits", also accounting for 94 per cent of all export credits granted with a duration of one year or more, the Minister stated.

Mr Walsh said there had to be a level playing pitch. The EU had a credible case and was determined to defend its position. "If direct payments are hit, it will have a devastating impact on Irish farming. I am very concerned also about export refunds because we are so dependent on them," he said.

The Egyptian beef market was a case in point, he said. Ireland would not be able to service that market without the export refunds.

Mr Walsh said his mandate was to defend and protect Ireland's vital interests in the talks - and this he would do.

IDA Ireland chief executive, Mr Sean Dorgan, admitted yesterday at the conference that his organisation may not reach its target of placing half of all new greenfield jobs from inward investment into the Border, Midlands and West this year. Mr Dorgan said that the IDA was not, however, abandoning the policy.

He added that Ireland continued to be an attractive location for overseas investors and, as long as it maintained competitiveness in the economy, he was confident it could hold its lead position. "I say this even in the context of the severe volatility in the high tech sector."