'US fears 'downward spiral' in WTO farm talks'

Washington, June 14 : World trade talks could get caught in a ''downward spiral where no one wins'' if countries back away from a commitment to dramatically cut farm subsidies and tariffs, the top U.S. trade official said on Tuesday.

U.S. Trade Representative Susan Schwab talked with reporters after meetings with House Agriculture Committee Chairman Bob Goodlatte of Virginia and Senate Agriculture Committee Chairman Saxby Chambliss of Georgia to get their advice on world trade talks, now at a critical juncture.

The European Union and other trading partners have resisted U.S. demands for deep cuts in farm tariffs as part of the deal.

At the same time, many countries want the United States to cut domestic farm subsidies more than Washington has offered.

That has alarmed U.S. farm groups who feel the U.S. offer in October to cut its overall farm subsidy allowance by 53 percent will cause significant pain if other countries don't make the tariff cuts the United States is demanding.

''The chairmen made it very clear that the key to a successful outcome for them is dramatically increased market access,'' Schwab said. ''We talked about the risk of a downward spiral if you start talking about less ambition. ... You could start a downward spiral where no one wins.'' The United States has proposed developed countries cut their farm tariffs by an average of 66 percent, compared to an EU proposal of 39 percent average cuts and a G20 group of developing country plan for 52 percent cuts.

As countries prepare for a key meeting in Geneva at the end of June, there are signs the EU is considering deeper tariff cuts but they may still be insufficient, Schwab said.

''We can't pass judgment until we actually see what they come up with. ... The numbers that have been floating around don't seem to be moving far enough,'' she said.

U.S. trade legislation that allows the White House to negotiate trade agreements that cannot be changed by Congress expires in the middle of 2007.

That means countries have to reach agreement by the end of July on core agricultural, manufacturing, service and other trade issues so there is enough time to get the agreement through Congress before the legislation expires, Schwab said.

''The prospect of not having a deal at all could help focus the mind'' and persuade countries to move off long-held position, Schwab said.

But it's also possible the talks will fail because countries don't want to make major changes, she said.

Reuters