EU says sugar reform deal strengthens hand in WTO talks

The European Union agreed on a major overhaul of its sugar subsidy program Thursday, cutting prices by 36 percent in a landmark deal that the EU said would strengthen its hand in upcoming world trade talks.

"I know I'll be in a much better position for the negotiations in December," said EU Agriculture Commissioner Mariann Fischer Boel. She told reporters the agreement reached after three days of talks "complies completely" with World Trade Organization rules.

Britain's Farm Minister Margaret Beckett, who chaired the talks, said the decision to overhaul of the EU's 40-year-old sugar subsidies marked "an historic day."

Beckett said the compromise plan was accepted by "the overwhelming majority" of the 25 EU governments.

A compromise was reached after a majority of EU governments accepted a deal presented by Beckett and Fischer Boel that boosted aid to farmers and industry to ease the pain of the cut in prices and quotas.

Under the old system, production was supported by generous EU subsidies and import tariffs, all of which will be phased out over a four-year period starting in 2006.