WASHINGTON, 9 February 2005 — The United States will push its trading partners to make enough progress in world trade talks this year to reach a final agreement by the end of 2006, a top US trade official said on Monday. Deputy Trade Rep. Peter Allgeier said countries have to make substantial progress by the time of the World Trade Organization’s next ministerial meeting in Hong Kong this December to achieve that goal.

“Our aim is to reach agreement ... on a rather detailed negotiating framework” covering agriculture, services and industrial and consumer goods by the Hong Kong meeting so countries can spend 2006 negotiating actual tariff and subsidy cuts,” Allgeier told the Brazil-US Business Council.

Although Brazil and many other trading partners share the goal of reaching a final deal by the end of 2006, it still will be a big challenge to do that, Allgeier said. The world trade talks, which were launched in November 2001 in Doha, Qatar, were originally slated for conclusion by last month. Although the negotiations are badly behind schedule, countries did agree last July on a broad framework for moving the talks forward this year.

One of the most difficult issues is agriculture, where the United States, the European Union and Japan face pressure to cut billions of dollars in domestic support. The White House in its annual budget recommendations on Monday proposed cutting US farm payments by $587 million in fiscal 2006 and capping maximum payments to individual farmers at $250,000, down from $360,000 currently.

“I think there’s no doubt that people should look at that action by the administration as one that shows the president is serious about curbing such support,” Allgeier said. At the same time, the United States can only agree to more significant cuts as part of a multilateral deal that would include the EU and Japan, he said.

Also, “advanced developing countries, such as Brazil and South Africa, ... are going to have to open their markets” to more agricultural imports, Allgeier said. “That is the sine qua non (indispensable condition) for us to reduce our domestic support,” he said.

Brazil and other higher-income developing countries also will have to cut tariffs on consumer and industrial goods and open their domestic banking, insurance and other service sectors to more foreign participation, he said.

Allgeier also said the US and Brazil have a lot of work to do before negotiators can set a new deadline for finishing a Western Hemisphere free trade pact, a top US trade official said on Monday. “At this point, we don’t have any predisposition as to what the timetable (for finishing the negotiations) should be.”

Talks on the proposed Free Trade Area of the Americas (FTAA) were long slated for conclusion by Jan. 1, 2005. But under the leadership of the US and Brazil — the current co-chairs of the negotiations — they have made little progress since a November 2003 meeting in Miami.

Allgeier told the Brazil-US Business Council he would meet with Brazilian counterpart Adhemar Bahadian later this month to see if the two can move the talks forward. The main task is still to flesh out the common set of obligations that all FTAA partners would be required to meet under a two-tiered negotiating track that countries agreed on in Miami for finishing the talks, he said.

The United States accepted the two-tiered approach in a concession to Brazil and some other countries in the region, who were not prepared to go as far in some areas, such as rules covering investment and protection of patented and copyrighted goods, as Washington would like, Allgeier said.

At the same time, Brazil has pushed the United States to put its domestic farm subsidies on the chopping block in the FTAA — something Washington says it can only negotiate in a multilateral forum that includes the European Union and Japan.

Allgeier said he hoped that progress made last July in World Trade Organization talks would give Brazil more confidence the United States will be slashing its domestic farm subsidies as part of a new world trade pact.

President George W. Bush also proposed on Monday to cut US farm payments by $587 million in the 2006 budget year, which begins in October, and to cap payments to individual farmers at $250,000, down from $360,000 currently.