Mr Howard won the concession this weekend at the Commonwealth Heads of Government Meeting (CHOGM) in Malta, the last major international gathering before next month's World Trade Organisation meeting in Hong Kong.
The CHOGM communique calls on the European Union to match the US offer to eliminate most subsidies when world trade talks resume next month, with the 53 leaders of Commonwealth nations saying they are deeply concerned about the pace of WTO negotiations to free up trade.
Mr Howard is heading back to Australia to steer crucial industrial relations and counter-terrorism laws through parliament.
He says the CHOGM declaration, following on from a similar but less specific call from last week's meeting of the Asia-Pacific Economic Cooperation (APEC) forum, was a step forward for international trade and alleviating world poverty.
"Collectively those two groupings represent an enormous chunk of the world's population," Mr Howard told reporters.
"It represents a very strong signal to the rest of the world and most particularly to the European Union that the time has come for significant movement on agricultural protection.
"The road will be very difficult but it has to be travelled if we are to give the developing countries a fair go."
CHOGM Secretary Don McKinnon told a news conference at the end of the summit dominated by calls for opening up global trade to poorer nations.
"The EU has to do a lot better," McKinnon said. "That has been underlined very clearly."
Cut farm aid
In a 17-point statement on multilateral trade, leaders called on the
European Union to show movement after the United States came forward with an offer to cut farm aid by 60 percent by 2010 if the EU scraps 80 percent of its subsidies.
Representing one-third of WTO members and a fifth of global trade, the Commonwealth includes rich countries like G8 members Britain and Canada as well as some of the world's poorest nations like Bangladesh and Malawi.
Mr McKinnon made it clear that the onus was on the European Union for progress to be achieved in the trade negotiations starting on December 13, saying the US offer to cut tariffs and subsidies was "absolutely unprecedented" and should be seized.
"This is a once in a lifetime opportunity for some real progress to be made," he said.
Pressure is growing on the European Union to end generous aid to farmers enshrined in its long-controversial Common Agricultural Policy, which critics say distorts competition from less developed countries.
The talks in Hong Kong are aimed at forging a new global trade agreement which could lift millions out of poverty, largely by getting rich countries to lower their tariff barriers blocking developing countries from their markets.
But agriculture has been the main stumbling block to clinching a deal on the so-called Doha development round that was launched in 2001.
WTO pessimism
Negotiators have expressed pessimism about prospects for a deal at the December 13-18 talks and negotiations are expected to continue through 2006.
Among the many voices criticising the EU's farm policy was Pakistani Prime Minister Saukat Aziz, who lamented that one-third of the revenue of European farmers was subsidies and called for a clear timetable to phase out the inequities.
"The developed world has to show leadership and come up with a timetable to get to a market mechanism in agriculture," he said.
Leaders called for a WTO agreement on "the elimination of all forms of export subsidies by 2010" -- a deadline that Commonwealth officials said underscored the commitment to levelling the playing field.
They also urged the European Union to offer better compensation to sugar-producing countries that were hard hit by last week's agreement on sugar reform that will see EU prices cut by 36 percent over the next four years.
"We don't want charity," said President Barrat Jagdeo of Guyana who slammed as "grossly unfair" an EU compensation package that would set aside six billion euros (A$10 billion) for European sugar producers and only 40 million euros for those from Africa, the Caribbean and the Pacific.
On Pakistan, which returned to the Commonwealth fold last year after its 1999 suspension to protest President Pervez Musharraf's coup, the leaders warned the president that retaining his position as leader of the army "is incompatible with the basic principles of democracy."
But it gave Pakistan until 2007, when General Musharraf's current term ends, to resolve the matter.
A final communique also stressed the "continuing need" to fight terrorism and said combating illegal migration was "a matter of priority" for governments.