May 8, 2012 / 7:40 PM / 8 years ago

UPDATE 1-USTR Kirk sees better chance for farm trade reform

* Kirk sees possible “silver lining” in economic instability

* Trans-Pacific trade talks could nick some farm supports

* US, EU mulling negotiation on possible free trade pact

* US would “love” to have trade agreement with China

By Doug Palmer

WASHINGTON, May 8 (Reuters) - Pressure around the world to cut government spending and accelerate economic growth has improved the environment for talks about reducing farm subsidies, one of the most sensitive areas of trade, a top U.S. official said on Tuesday.

“I do think the overall economic situation in all of our countries puts us in a better position to have a more thoughtful conversation about farming support than we have (had) in a very long time,” U.S. Trade Representative Ron Kirk said in remarks at the U.S. State Department.

His comments came as the 10-year-old Doha round of world trade talks to liberalize trade in agriculture, manufactured goods and services remains in a deep coma.

But farm support programs are on the agenda in the proposed Trans-Pacific Partnership (TPP) agreement covering the United States and eight other countries in the Asia-Pacific.

U.S. dairy and sugar producers, in particular, are concerned their government programs could suffer from a deal in those talks.

In addition, the United States and the European Union have been mulling a possible free trade agreement, which could require cuts in farm supports.

Kirk, now in his fourth year as President Barack Obama’s chief trade negotiator, said one thing he has learned is “nothing is more sensitive than how (countries) handle support for agriculture.”

“Now, I happen to believe if there is a silver lining in this economic instability around the world, it’s forcing a more thoughtful conversation about all subsidies and farm supports, certainly in our Congress, in Europe, in Brazil.”


In addition, booming demand for agricultural goods are another reason that major agricultural exporters such as the United States “ought to be able to rationalize and come to grips” with farm support programs, he said.

Negotiators from the United States, Australia, New Zealand, Chile, Peru, Vietnam, Singapore Malaysia and Brunei are meeting in Dallas, Texas through May 16 for the 12th round of TPP talks.

The nine countries hope to conclude an agreement by the end of the year, and tough decisions on agricultural “market access” are expected to be among the last ones made.

Japan, Mexico and Canada asked six months ago to join the TPP negotiations and Kirk on Tuesday remained vague about when the United States and other current TPP members would make a decision on those country’s applications.

In theory, any of the 21 members Asia Pacific Economic Cooperation (APEC) grouping could eventually join the agreement, provided they are willing and able to meet the high standards envisioned by current participants, Kirk said.

The United States “would love nothing more” than to have China join the pact, Kirk said.

It is even possible that membership could be opened up to non-APEC countries, Kirk said, noting that several countries in the Western Hemisphere have inquired about joining.

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