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Reviving Doha? Time for the U.S. to Lead

January 22, 2007

Sudanese Peanut FarmersAs trade ministers prepare to gather in Davos, Switzerland this week in an effort to restart stalled global trade talks, the Financial Times reported that trade officials from the U.S. and Europe were "on the brink of an agreement" that included a proposal by Brussels to cut barriers to foreign agricultural products by an average of at least 54 percent and a conditional offer by the U.S. to lower the ceiling on its domestic farm subsidies to close to $17 billion.

EU trade commissioner Peter Mandleson said that talks were showing renewed vigor but cautioned in an interview with the International Herald Tribune that "we are not in a situation where we have the outline of an agreement."

The reported deal is similar to recommendations put forward recently by Kimberly Elliott, senior fellow at CGD and the Peterson Institute for International Economics, in her new book: Delivering on Doha: Farm Trade and the Poor.

Elliott argues that to revive the talks the U.S. must improve on its previous offer---which would have lowered the overall subsidy ceiling without actually cutting subsidies. A new CGD Note, Saving the Doha Round Requires Further Cuts in U.S. Agricultural Support explains what is needed, and why.

Europe, Japan, and the middle-income developing countries will also have to make concessions. For a summary of who needs to do what, see Elliott's Agriculture and the Doha Round, a new CGD/Peterson Institute brief.