Senate agriculture leaders, farm groups pan WTO draft

WASHINGTON (Reuters) - Senators from U.S. farm states and the nation's largest farm group criticized a new negotiating text for a World Trade Organization deal on Monday, saying it won't get more U.S. farm goods into foreign markets.

The draft text on "modalities" -- the outline for a deal that WTO members have struggled to reach since 2001 -- contains "substantial loopholes" that would limit U.S. market access, a bipartisan group of 22 U.S. senators said in a letter to President George W. Bush.

The United States has offered to cut its domestic subsidies, but other countries haven't gone far enough, said the group, led by Tom Harkin, the Iowa Democrat who chairs the Senate Agriculture Committee, and Georgia Sen. Saxby Chambliss, the Republican leader on the committee.

"The potential modalities framework now under consideration by negotiators in Geneva is not sound or balanced from the perspective of U.S. agriculture," the senators wrote.

The draft modalities text -- an update to what world trade ministers rejected in July -- was released on Saturday. WTO Director-General Pascal Lamy is weighing whether to call together ministers next week to try again to negotiate a deal.

"Absent substantial improvements in the July framework, any modalities agreement will not benefit U.S. agriculture and will not have our support," the senators said.

The 6 million-member American Farm Bureau Federation said the draft failed to make "meaningful progress" and the United States should reject it.

"A ministerial meeting should not be called until there is a consensus for greater ambition in the agricultural text," said Bob Stallman, Farm Bureau president, in a statement. "Any trade deal that legitimizes agricultural trade barriers and protectionist behavior is unacceptable."

The National Cotton Council also criticized the new text for cutting U.S. farm supports without giving U.S. farmers better market access in return.

Ranchers still hope the United States pushes for a deal, and hope to gain access in Europe and Japan, said Gregg Doud, chief economist of the National Cattlemen's Beef Association.

But Doud said he was surprised to see how the text accommodated some nation's sensitive products, particularly Canada's supply-managed dairy and poultry industries.

"Are we going to liberalize market access or not?" Doud said in an interview.

"It's hard not to get the impression at this point in time that we're watering it down, and that's not good," he said.

(Editing by Christian Wiessner)