US and EU clash over export subsidies

US trade chief Rob Portman said he saw little chance of a breakthrough in World Trade Organization (WTO) farm talks this week…

US trade chief Rob Portman said he saw little chance of a breakthrough in World Trade Organization (WTO) farm talks this week after the European Union rejected any unilateral move on export subsidies.

"If we cannot make all the progress we had hoped for here in Hong Kong, and I'm afraid that we won't, I feel strongly we should set a date [to meet again] before we leave here," Mr Portman said.

Although the WTO had already dropped plans for a draft free trade treaty at the meeting, diplomats had hoped for progress on core issues such as cutting the massive subsidies rich nations pay their farmers, lowering tariff barriers and ending export subsidies.

The European Union has offered to eliminate its export subsidies, but it ruled out setting a date in Hong Kong, as the United States and major exporting countries such as Brazil and Australia have demanded, without a similar commitment from others.

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"There can be no question of the EU making another unilateral concession in any area," EU Trade Commissioner Peter Mandelson said.

Brussels says subsidies to US farmers under Washington's food aid programme for poor countries are as great as the benefit European producers receive from export subsidies.

"We have had no matching offers on issues of state trading enterprises, export credits or food aid from Australia, New Zealand, Canada or the United States," Mr Mandelson said.

The EU says monopolies held by exporting companies in Australia, Canada and New Zealand also heavily distort international farm trade to the benefit of their farmers.