Baby Steps

In the current round of Doha trade negotiations, the United States has made a positive gesture concerning agricultural subsidies:

The US on Tuesday made the first significant move in this week’s politically fraught meeting of trade ministers in Geneva, cutting its proposed ceiling for farm subsidies to $15bn a year.

The move would reduce US farm subsidies deemed to distort inter­national trade by about $2bn (€1.3bn, £1bn) compared with the current offer in the so-called “Doha round” of trade talks, much lower than the present ceiling of about $48bn.

But it would be comfortably above the US’s recent real spending in trade-distorting farm support, estimated at $7bn-$9bn a year.

Not bad. But not all that great either. Brazil is right on the money here:

Brazil and India, two of the US’s main negotiating partners in the struggling World Trade Organisation talks, dismissed the offer as inadequate. “This is a nice try but it is not enough,” said a spokesman for the Brazilian foreign minister, Celso Amorim. “It is not the final offer they can do.”

Indeed it isn’t. Agricultural subsides should be eliminated completely.