Chief WTO farm mediator says US, EU must move

GENEVA (Reuters) - The chief mediator in troubled World Trade Organisation (WTO) farm talks on Monday said the United States would have to offer at least another 14 percent cut in subsidies to get a deal.

The European Union, also under pressure to make concessions in the WTO negotiations, would have to improve its offer on lowering import tariffs on farm goods, another politically highly sensitive part of the agenda, New Zealand's ambassador Crawford Falconer said.

Falconer, chairman of the WTO's agricultural negotiations, issued a 28-page report highlighting where the main divisions were in the farm talks and suggesting some possible solutions for closing the gaps.

Major WTO states have set themselves an end-year deadline for wrapping up the long-stalled Doha free trade round, but such a timetable requires an accord on a blueprint before the WTO begins its summer break at the end of July.

"Now is the time for honest talk, for telling it how one sees it in the hope ... (to) facilitate the decision-making we so desperately need now," Falconer said in his introduction.

The ambassador said that the current U.S. offer to cut farm subsidies to some $22 billion a year was not enough, but that it was unlikely that Washington would be willing to go to the "low teens" demanded by some of its trading partners, who say subsidies distort world trade.

"The centre of gravity for what is in play here for the U.S. is certainly below 19 and somewhere above the low teens," he said.

The EU, the world's largest users of farm subsidies, would also have to cut its farm supports by between 75-80 percent from the very high numbers that it was permitted under the last world trade deal, the Uruguay Round, which concluded in 1994.

Cuts on the currently highest farm tariffs would have to be somewhere between the 60 percent offered by the EU and the 85 percent sought by the United States, he added.

The number of so-called "sensitive products" -- farm goods that the EU and other major importers want to shield from the deepest tariff cuts -- would have to be limited to between 1 and 5 percent of tariff lines, below the 8 officially sought by Brussels, Falconer said.

Developing countries would have to contribute by doing some "two-thirds" of what the richer states were willing to do, he said.

Falconer rejected an argument put forward by some developing countries that farm products they are allowed to designate as "special" because of their importance to subsistence farmers could be excluded from tariff cuts altogether.