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M. Continuo

WTO asks U.S. to lower farm subsidy ceiling


    GENEVA (Reuters) - A compromise proposal to break a deadlock in talks on a global trade deal would require the United States to lower its ceiling on farm subsidies to about $14.5 billion (7.28 billion pounds), sources familiar with the talks said on Friday.

    The United States said on Tuesday it was ready to cut itsceiling for trade-distorting farm subsidies to $15 billion (7.5billion pounds) a year to help unblock the World TradeOrganisation talks.

    A U.S. official, speaking on condition of anonymity, saidthe U.S. offer still stood at $15 billion, compared to itscurrent ceiling of $48.2 billion under WTO rules.

    "We have always signalled that additional flexibility iscontingent on an entire package containing additional marketaccess," the U.S. official said.

    Under the compromise proposal, the EU would be required tolower its ceiling for trade-distorting farm subsidies by 80percent to 24 billion euros ($37.7 billion) although thatfigure was within the scope of reforms already approved by theEU.

    Trade ministers from around 30 countries are in Geneva thisweek to try to reach a breakthrough in nearly seven-year-oldworld trade talks.

    A smaller group comprising the United States, the EuropeanUnion, Brazil, India, China, Japan and Australia have beenstruggling for days to agree on terms for cutting farmsubsidies and tariffs on both agricultural and manufacturedgoods.

    The United States, a major agricultural exporter, hasinsisted that developing countries make improved offers to opentheir markets in exchange for subsidy cuts.

    (Reporting by Jonathan Lynn, Robin Pomeroy, WilliamSchomberg and Doug Palmer)