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In a 28-page “challenges” paper sent to WTO members on April 30th, the Chairman Falconer said he believed that the United States would have to agree to lower its proposed cap on overall trade-distorting domestic farm support from its current offer of around $23 billion a year to somewhere between $19 billion and a figure in the very low teens.

With respect to tariff reductions, Falconer said a final deal on the overall average cut for developed countries will have to fall somewhere between the 39% proposed by the European Union (EU) and the 66% proposed by the U.S., with an outcome likely to be somewhere above 50%.  For developing countries, he said the center of gravity for a deal is likely to be at a “minimum” two-thirds of the cut agreed by developed countries.

Regarding other market access issues, Falconer said he believed that the center of gravity for a deal on sensitive products was limiting the number of such products to between 1-5% of all tariff lines and imposing tariff cuts on these products of between one-third and two-thirds of the cuts fixed in the general formula.  Chairman Falconer also cited emerging consensus on the principle that the increase in TRQs for sensitive products should be in correlation with the deviation from the general formula, although he admitted “clear gaps” in what that correlation should be and whether the TRQ increase for sensitive products should be made in relation to import volumes (as favored by the EU) or domestic consumption (as favored by the United States).

Chairman Falconer was quoted as saying “If we do not get serious momentum over the next few weeks…we will either fail or we will put this whole exercise in the freezer for some considerable time until a better generation than us can thaw it out.”