U.S. trade representative Rob Portman offered a proposal Monday that would cut tariffs on imported farm goods and lower subsidies to U.S. producers. He called on the European Union and Japan to come up with better offers to reduce their own agricultural support programs.

The EU "uses about three times more support than we do," he says. "The ratio needs to be about two to one to be rational, balanced and practical."

According to the offer, the United States would make cuts of 60 percent in trade-distorting farm subsidies. But Portman says the EU and Japan would have to make cuts of 80 percent, since their subsidy levels are higher.

Brussels has so far offered to cut its subsidies for products including wheat, dairy goods and rice by 65 percent. The U.S. proposal also calls for the elimination of all agricultural subsidies and tariffs by 2023.

The next step is for the EU to match the U.S. initiative, said Australian Trade Minister Mark Vaile, adding that Washington's proposal "could be" the breakthrough negotiators have been seeking.

WTO director-general Pascal Lamy has said the EU and the United States will have to make adjustments in agriculture policy if progress is to be made in the present round of global trade talks, which is already well behind an original December 2004 deadline.

Lamy believes the EU needs to open its market more to foreign producers while the U.S. should offer to cut the level of financial support it gives its farmers, his spokesman, Keith Rockwell, told The Associated Press. "Movement in those two areas would be helpful not only for the agriculture negotiations overall, but for the entire round."

At a Hong Kong summit scheduled for the end of the year, the WTO's 148 members are supposed to agree on an outline for a global trade deal.

EU farm reforms adopted in 2003 will convert the bulk of the bloc's production subsidies into animal-welfare and environmental-management grants to farmers - deemed far less trade-distorting under WTO rules. Washington envisages no such change to its "countercyclical" subsidy program, which provides payouts to farmers when prices fall, allowing U.S. producers to charge artificially low prices.

Washington's trade partners say the cuts they are seeking would mean changes to the 2002 U.S. farm bill, which comes up for renewal in 2007. After that, a new global trade treaty would be harder to negotiate, diplomats say.

Associated Press