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Brussels, 4 July 2005

European Commission welcomes US Commitment to Farm Reform

The European Commission today welcomed the apparent willingness shown by US President George W. Bush to overhaul US agricultural subsidies. It hopes that the President’s words, in an interview with ITV1 on the eve of the G8 summit, will be translated into genuine and far-reaching reforms which can find their way through Congress when the US Farm Bill is up for revision in 2007.

Mariann Fischer Boel, EU Commissioner for Agriculture and Rural Development, said:

“I am very encouraged to see an apparent willingness by the US to look seriously at farm reform and put the US Farm Bill on the table. We in Europe have just put in place the biggest ever reform of the Common Agricultural Policy. We are prepared to bind that reform contractually into a deal in the World Trade Organisation, but our partners must match our ambition. So I hope the US will follow our good example. Farm subsidy reform is vital to boost world trade and to help the developing world out of the cycle of poverty.”

“In Europe, we have completely revolutionised the way we subsidise our farmers. Our support payments are no longer linked to what farmers produce, making them non trade-distorting. Instead, they aim to ensure high environmental and animal welfare standards and encourage innovation and diversification in rural areas. US payments, by contrast, are still largely production-linked and therefore seriously distort trade.”

“In the ongoing world trade talks, the EU has pledged to phase out all export subsidies. But before agreeing on an end date, we need our partners, in particular the US, to do the same, by phasing out export credits and the use of dubious ‘food aid’ to dispose of surpluses – which is not a way to ensure long-term food security for developing countries.”

“We in Europe are fully committed to making the latest round of world trade talks a true ‘development’ round. We hope to reach a comprehensive deal in Hong Kong in December, because trade is better than aid.”

“On trade with the poorest countries, Europe leads the way. We are by far the biggest importer of food from the developing world. From 2009, the world’s 50 poorest countries will be able to export ‘Everything But Arms’ to Europe, completely free from tariffs and quotas. It would be nice if this could be matched by our partners."

“I hope the President’s words can be translated into action. We are prepared to bind our reforms into a global trade accord, but only if the US and others commit themselves to similar reform. By Hong Kong, we hope that our trading partners will be able to show more of their cards on all aspects of the agriculture negotiation, as well as on the other areas of the development agenda.”

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