US 'not clear' on French G20 food proposal

7th February 2011, Comments 0 comments

US Treasury Secretary Timothy Geithner said Monday it was not clear what France was proposing within the G20 to stamp out food price volatility, and implied market forces should be left to work unhindered.

His comments, in response to a question asked at a meeting with business students and professors in Sao Paulo during a visit to Brazil, came as UN food agencies and France warned of unrest over rising food prices globally.

France, the current chair of the G20 group of major developed and developing nations, has vowed to bring stability to food commodity prices, possibly by creating a new mechanism in the World Trade Organization.

G20 agriculture ministers have been invited to Paris in June to draft solutions.

But Geithner said that the United States, while "working closely" with France on the issue, was wary of anything that might jeopardize the recovery from the global financial crisis.

"We want to be very careful to bring balance to that perspective, that in the desire of politicians to bring stability to markets we don't create conditions that will be damaging to not just the interests of commodity exporters but to the better functioning of the basic dynamics of the recovery," he said.

"So it's not clear to me yet what the French are really proposing," he said.

Geithner added that US commodity trading was conducted in a transparent and accountable system that minimized the possibility of grain and cereal price speculation that France says is occurring elsewhere.

The Food and Agriculture Organization said last week that food prices have reached their highest level since the UN agency began measuring them in 1990.

The FAO and another UN agency, the World Food Program, suggested that the problem contributed to protests that led to the fall of the Tunisian government last month.

A previous sharp rise in food prices in 2007 and 2008 triggered food riots in a number of African countries, as well as in Haiti and the Philippines.

© 2011 AFP

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