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The so-called G-5 meeting in Paris tried to create a bridge between developed and developing countries in the increasingly complicated process of negotiations among all WTO members. The main issue concerns farm export subsidies in rich countries, and ensuring that developing economies get better terms for selling their produce in the big markets of Europe and North America.

US Trade Representative Robert Zoellick warned after the Paris talks that time was running out. "There is some convergence on various points. At the same time, I would caution that there is still a considerable way to go", he said. The EU pushed at the meeting for the US to abolish export credits on farm produce that help US farmers to sell their goods overseas by offering low-risk loans to customers. Washington has so far refused to give much ground on this matter and accuses the Europeans of foot-dragging over proposed cuts to industrial aid. Mr Lamy said that the EU would "factor in" the US line that not all credits distort trade. "Our starting position is to eliminate them but the US made a point which we have to check now", he said. In May, Mr Lamy offered to end EU export subsidies if the US phases out subsidised food aid and export credits, and Australia, Canada and New Zealand curb state-trading monopolies in agriculture.

However, that is still some distance from developing countries, and India has declared its opposition to any free trade deal that would endanger the livelihood of its 600 million subsistence farmers. "Any market access which impinges on the livelihood security of Indian farmers is not possible", Indian Trade Minister Kamal Nath said.

Brussels meeting.

Within the EU, France reluctantly accepted Mr Lamy's negotiating position, after a meeting on July 11 revealed strong support for the Commission. The French Government was initially angered by Mr Lamy's farm export subsidy offer, but has now backed the plan. The Conclusions of the EU's July 12 General Affairs and External Relations Council noted the Trade Ministers' meeting the night before "where broad support to the Commission was expressed, both in terms of strategy and tactics". Mr Lamy acknowledged the French grumbles about farm subsidies but he added that other Member States had their own pet areas, like Portugal with textiles, Italy with intellectual property and Sweden with specialty steel. "If they were all clapping and had happy, smiley faces, then some of our negotiating partners would say 'We should ask for more'", Mr Lamy said.

But as the end-July deadline approaches, the Council will meet again: a special session is scheduled in Brussels on July 26 to confirm the EU position on texts to be submitted to the WTO General Council.

ACPs and G-90.

Commissioner Danuta Hubner is in Mauritius on July 11-12 to take part in a meeting of the African, Caribbean and Pacific group (ACP) and attend a meeting of the G-90 group of poor nations. Mr Lamy was due to join her in Mauritius on July 12, as will Mr Zoellick and WTO Director-General Supachai Panitchpakdi.

The EU has already backed plans for the establishment of a negotiating group under the WTO's Trade Negotiations Committee (TNC) to address all outstanding implementation issues. Mrs Hubner told the ACP Trade Ministers' meeting on July 11 that the Doha framework deal had to be a short and focused text to make up the ground lost at Cancun. "We have a chance this week to give the world a signal that the multilateral system is alive and thriving, and that both the G-90 and the EU are committed to results", she said. Speaking to the G-90 on July 12, she appealed for support for just one of the four controversial Singapore issues, trade facilitation. "Trade facilitation is about saving money, both for companies and for the customs, not about extra costs. Simplification is cheap, not expensive", she said. On non-agricultural market access (NAMA), Mrs Hubner said WTO members must make contributions corresponding to their capacity and level of development. "We should not ask for tariff reduction from the weak and vulnerable developing countries. What we are looking for is tariff bindings to provide predictability in world trade", she said.

Mr Panitchpakdi urged the G-90 to adopt realistic and constructive negotiating proposals, and warned that all 147 WTO members stand to lose a great deal should a framework deal not be reached. oShould we reach agreement this month, the Doha Round will be back on track. An agreement would lock in a firm commitment by developed countries to eliminate all forms of agricultural export subsidies", he said. "But should we fail, we will have nothing to show for nearly three years of work in the Doha Round and I believe it will be quite some time before we have another opportunity to advance these negotiations." He said that while he understood the frustration of many G-90 Ministers over the slow pace of the Doha negotiations, he pointed out that considerable progress had in fact been made since the Round was launched in November 2001. He pointed out too that key industrial countries had shown considerable flexibility in important areas of the negotiations and said that all members must indicate willingness to compromise.
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Publication:European Report
Geographic Code:4E
Date:Jul 14, 2004

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