US farm groups urge Bush hold firm in WTO talks

WASHINGTON, June 2 (Reuters) American farm groups has urged President George W. Bush on Thursday not to give into demands in world trade talks for further cuts in U.S. farm subsidies.

The American Soybean Association, the National Milk Producers Federation and nine other farm organizations said in a letter to Bush yesterday that the United States made ''a very generous offer'' in October to cut its current cap on trade-distorting farm subsidies by 60 percent.

The U.S. offer was contingent on the EU, Brazil, India and other countries making deep tariff cuts to provide American farmers with more export opportunities. The United States also argues that developing countries would benefit most from a deal that significantly cuts farm duties.

The U.S. farm groups said other World Trade Organization countries have come to view the October offer as a minimum U.S.

commitment and are pushing Washington for even greater cuts in domestic farm subsidies.

''It seems clear that other countries have pocketed the U.S.

offer ... without being prepared to even come close to the U.S.

proposal on increasing market access in both developed and developing countries,'' the groups said.

''Under these circumstances, we believe that it is important to make clear that American agriculture can simply not support any deeper cuts in domestic support than those already proposed by the administration,'' they said.

If countries do not step forward with tariff cuts the United States originally envisioned, a final WTO deal would only be acceptable if U.S. domestic subsidy cuts are ''commensurately reduced,'' the groups said.

The strongly-worded letter came as countries continue to struggle to reach agreement on basic formulas for cutting farm subsidies and reducing agricultural and manufacturing tariffs after more than four years of talks.

WTO Director General Pascal Lamy has set a end-June deadline for countries to reach agreement on those issues.

Failure to meet the goal would throw considerable doubt on the possibility of concluding the round.

Reuters PDS VP0550