A last-minute deal by WTO negotiators on ending farm export subsidies in their efforts to forge a global trade pact by late 2006 has drawn praise from government leaders and warnings that much work remains, reports the World Bank press review Monday.
Delegates from both wealthy and poor countries in Hong Kong finally reconciled their conflicting interests, agreeing to eliminate farm export subsidies by 2013, work toward dismantling trade barriers in manufacturing and services and to provide greater protections and support for developing countries.
Developing nations felt the final agreement addressed many of their concerns, from opening up rich nations farming markets to measures that could enable the world’s poorest countries to increase their tiny share in global trade.
The agreement approved by all the WTOs 149 member countries and territories gives the worlds poorest nations special trade privileges. Exporters from least developed countries – with annual per capita incomes of less than 750 dollar – will be allowed duty-free and quota-free market access on 97 percent of products imported by rich nations by 2008.
Negotiators now aim to work out formulas for cutting farm and industrial tariffs and subsidies – the nuts and bolts of an eventual trade pact – by April 30, 2006.
Dow Jones (12/18) further reports that on industrial goods, progress remains linked to advances in the agricultural sector. Any trade deal will be flexible toward countries with small, vulnerable economies, but these countries won’t be given their own separate group within the WTO, the statement said.
Future meetings will revisit the issue of sensitive products, which were a major sticking point this week. Sugar, bananas and textiles will be some of the key sectors, going forward. Latin American nations spent the week urging the EU to reconsider its banana tariffs, meant to protect growers in Europe and its former colonies. As the session ended, the Latin American nations agreed to continue negotiations.
The Guardian (UK, 12/19) meanwhile writes that while the United States promised an aid package to the five worst-affected cotton-exporting nations – Benin, Burkina Faso, Chad, Mali and Senegal – it put off the far more difficult elimination of domestic subsidies that are driving down global cotton prices.
This was enough to ensure that cotton was not the deal-breaker it proved during the last round of talks in Cancun, but African nations and aid agencies remained unsatisfied with the deal, the daily argues. Moussa Saye, the Senegal coordinator for Action Aid, said the aid package was a distraction.
– The US tells us that its subsidies are not the problem, that we need aid to improve our productivity. But this argument is insulting. Aid is like a bribe. We do not believe it is compensation for unequal trade, he noted.
Meanwhile, British Oxfam and Friends of the Earth on Sunday branded the WTO agreement struck in Hong Kong as “a dirty little deal” that betrayed developing countries. The accord was “profoundly disappointing” and a “betrayal of development promises”, Oxfam said.
– Rich country interests have prevailed yet again and poor countries have had to fight a rearguard action simply to keep some of their issues on the table, said the head of Oxfams Make Trade Fair campaign, Phil Bloomer.
– The so-called gains for developing countries are just little crumbs that will not make up the price for millions of farmers, fisher folks, indigenous people and others in the developing world will have to pay as a result of todays deal, said Friends of the Earths international chairwoman, Meena Raman.
The Financial Times writes in Monday’s editorial (12/19) that trade ministers have done little more than endorse a modest package of trade and aid measures.
It is desirable to offer something credible to poor small developing countries. Protection-free market access for the least developed is the least they deserve. It is a scandal that the US Congress resists this. It is equally shocking that it cannot stop subsidizing US cotton farmers at the expense of poor west African producers.
But developing countries that have little to offer – and even less they wish to offer – cannot be allowed to hold the negotiations to ransom. Many have fallen prey to economically illiterate arguments advanced by non-government organizations.
Some of these false friends have even appeared as negotiators, determined to protect the high-cost domestic services, internationally uncompetitive manufactures and corrupt monopolies that impoverish their own peoples. They risk making the WTO as ineffective as UNCTAD, the daily suggests.
The Wall Street Journal Europe adds that while it may have laid some groundwork, the Hong Kong dynamic also set a troubling tone for success in a spring meeting. What should have been minor issues, such as the agreement on ending export subsidies, ended up dominating the talks, with the broader questions all but untouched.
The export-subsidy agreement means the EU will have to stop paying farmers 2,5 billion to 3 billion euros a year to cover the difference between higher European prices and lower world prices.
It was less clear how wording in the agreement will apply to US exports, because the US provides most of its export aid in the form of food assistance and export credits to help finance trade.
The US also is expected to change portions of its food-aid program, in which farmers are paid for crops donated to poor countries. The meetings draft declaration said food-aid programs should be allowed to continue to provide food in emergencies, but not to subsidize farmers. Details of how much that might change are to be worked out in the next few months.
Kilde: www.worldbank.org
