US won't cut farm subsidies unless others do-Portman

WASHINGTON (Reuters) - The United States will demand other countries make steep cuts in their farm subsidies and tariffs before considering any change to its own programs, the chief U.S. negotiator said on Wednesday as lawmakers mulled how world trade talks could reshape the U.S. farm safety net.

U.S. Trade Representative Rob Portman assured wary members on the Senate Agriculture Committee he would insist any new world trade deal provide substantial new export opportunities to compensate U.S. farmers for federal subsidy cuts.

"The U.S. is already the most open developed country, and we will benefit the most from bold trade liberalization," U.S. Trade Representative Rob Portman said in prepared remarks.

"However, we will not consider changes to our own programs unless the other WTO (World Trade Organization) members commit to open their markets to our goods and agree to reduce their own subsidy and trade-distorting programs," Portman said.

He repeated the U.S. position that the European Union and Japan, which spend more on their farmers than the United States, must be required to cut more in any new trade deal.

World trade talks are at a critical juncture before a major World Trade Organization meeting in Hong Kong in December. International business groups have warned the talks could fail without an agreement soon on basic formulas for cutting farm tariffs and trade-distorting domestic farm payments and eliminating agricultural export subsidies.

The United States has been in discussions with the European Union to try to find common ground on farm trade issues. Portman will be in Paris on Thursday to continue those talks, which will be expanded on Friday to include Brazil and India.

'TRADE FATIGUE'

WTO negotiators agreed in July 2004 on a framework for finishing the agriculture talks, as well as negotiations on services and industrial goods. But little progress has been since. "We need to figure out a way to break the deadlock. Agriculture is the engine that drives the round," Portman said.

The intensified farm negotiations come at a time when many U.S. farmers have grown skeptical of trade deals, Sen. Pat Roberts, a Kansas Republican, told Portman.

"There's a yellow light warning in farm country. We're suffering from trade fatigue. They're a little suspect, a little weary of this animal we call free trade," he said.

If a deal is struck cutting trade-distorting farm subsidies, that would require Congress to "drastically change" traditional farm programs when it writes the 2007 farm bill, Sen. Tom Harkin, an Iowa Democrat, said. "We're going to have to make some pretty severe changes."

But U.S. Agriculture Secretary Mike Johanns told the panel that continuing U.S. programs in their current form could be "a very high risk for farmers." The WTO has already ruled the U.S. cotton program violates world trade rules in a case brought by Brazil, Johanns said. Other countries are currently considering whether to challenge the U.S. rice program, he said.

The current commodity-specific "approach to farm policy dates back 70 years to the Depression and the need to figure out how to save agriculture. It's a different world today. We need to be creative in how we approach agriculture," Johanns said. That could include redirecting farm spending toward programs such as conservation, crop insurance and risk management that have less impact on trade, he said.