Chilean President Calls for EU to Scrap Agricultural Subsidies

Chilean President Ricardo Lagos urged the European Union to eliminate trade-distorting agricultural subsidies and grant developing countries full access to its markets during a speech to the European Parliament. The call comes as the European Union faces pressure to agree to significant cuts in farm tariffs in the ongoing global trade talks. Lagos expressed hope for a global trade deal by year's end, but acknowledged that it would be challenging for Europe to make concessions on farm aid.

Key Takeaways:

• Chilean President Ricardo Lagos urged the European Union to eliminate trade-distorting agricultural subsidies.
• Lagos called for the EU to grant developing countries full access to its markets.
• The EU is under pressure to significantly increase its proposed cuts in farm tariffs.
• The EU has offered cuts of 50% on the most protected products, while the U.S. has proposed a 90% cut.
• The EU has also said that no tariff should exceed 100%, but the U.S. wants that limit to be 75%.
• Chile is a member of the Group of 20 industrial and developing nations, which demands that farm subsidies in rich countries be eliminated within five years.
• Lagos expressed hope for a global trade deal by year's end, but noted that it would be challenging for Europe to make concessions on farm aid.
• The EU's proposed cuts in farm tariffs are well below the levels offered by the U.S.

Statistics:

• 148 - Number of World Trade Organization members hoping for an outline of a global trade deal by year's end.
• 50% - Level of tariff cuts offered by the EU on the most protected products.
• 90% - Level of tariff cuts proposed by the U.S.
• 100% - EU's proposed limit on tariffs.
• 75% - Proposed limit on tariffs by the U.S.
• 5 years - Timeframe in which farmer subsidies in rich countries should be eliminated, as demanded by the Group of 20 industrial and developing nations.

Sources:

• Dow Jones Commodities News Select via Comtex
• Dow Jones Newswires