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EU/WTO: EU BLAMED FOR HOLDING HONG KONG HOSTAGE.

Cairns gang back on the attack.

The 17-nation Cairns Group accused the EU of stubbornly sticking to its trade protection doctrine. "The round is captive to the lack of political will in the European Union to deliver on the Doha mandate for agricultural market access", the Cairns Groups said in a statement. "This cannot be pushed to one side if we are to succeed in Hong Kong and in concluding the round." They called on the EU to make more of an example for the rest of the world, saying it would help the WTO secure and deepen reductions in agriculture domestic support proposed by the United States.

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The Cairns Group of agricultural-exporting nations gathers: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay.

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Australian Trade Minister Mark Vaile went even further, saying he believed the EU could cut farm tariffs more than it has so far pledged. The EU offered in October to reduce its highest agricultural tariff rates by 60% and its average tariffs by 46%, but other WTO members said it was not enough to revitalise the talks ahead of next month's ministerial in Hong Kong. "We believe that there still is room for further movement", he said. "We don't believe they have reached the limit of their mandate from the member states."

Meanwhile, India's Commerce Minister Kamal Nath has lashed out at rich nations in the WTO talks, particularly the EU. Mr Nath said he was baffled that the EU offered to phase out domestic subsidies and reduce tariffs but only in exchange for concessions in other areas like service industries and market access for industrial goods. "I welcome Peter Mandelson's proposal to say he will reduce by so much but then he says 'I want my pound of flesh'", Mr Nath said. "He is looking to be rewarded and rewarded for behaving as one should. It is a step in the right direction but it is a question of giving an inch and asking for a mile - not just asking for a foot but a mile." Mr Nath said developing countries' only defence against subsidies was to impose tariffs and duties and insisted any deal must give them the right to defend key sectors. India, he declared, would not allow the talks to become a deal simply to open up poor countries' markets to multinationals. "It was not called the Development Round because of the lack of another description or word. It was a specific objective."

Mandelson still hopeful.

The EU Trade Commissioner remained hopeful, however, and argued on November 10 that levels of ambition could not be lowered, even if expectations for Hong Kong were scaled down. Insisting that the EU would make no new offer on agriculture before Hong Kong he called further movement on industrial tariffs and services, especially from advanced developing countries "the bargain at the heart of the negotiation". He said the realistic level of ambition for Hong Kong at this stage will be to consolidate the progress, build on the July framework agreement and leave most of the main decisions on the figures to later, perhaps the first quarter of next year. "Reducing expectations for Hong Kong, if carefully handled, will allow us to avoid an acrimonious breakdown of the sort we witnessed in Seattle and Cancun", he said. "Simply demanding more in agriculture...does not add up to a serious negotiation."

Services and tariffs.

Backed by US Trade Representative Rob Portman, Mr Mandelson has insisted on seeing concessions from poorer nations on manufactured goods and service industries before making further offers. Japan, which has been even more hostile to farm reforms than the EU or US, has signalled it might be moving from its hardline defence of subsidy programmes. Swiss Economy Minister Joseph Deiss, spokesman of the G10 group of countries that protect their farmers the most, said negotiators needed to be realistic about persistent "deep divisions" in areas such as agriculture and industrial goods.

Mr Mandelson is opposed by leading developing nations like India, which says the main emphasis must be on agriculture and particularly in ensuring that poor nations get the help they need to increase their economies and ensure development. Another top emerging economy, Brazil, has said a deal on farm trade must be near before developing countries would be ready to make concessions in other areas. However, neither country can command the support of the G90 group of mainly African developing nations, which say that hefty EU tariff cuts would mean they lose their preferential benefits.

WTO Director-General Pascal Lamy still hopes the intensive talks in Geneva will break the deadlock in the talks, with compromises from all players leading to a draft declaration for Hong Kong being tabled within the next fortnight. He warned WTO members that there was "no Plan B" if the Hong Kong meeting repeated the failures of Seattle in 1999 and Cancun in 2003, and that the costs of a "non-round" could be hundreds of billions of dollars.

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Lingering disagreements have held up WTO talks ahead of the Hong Kong meeting, which aims to resolve many of the issues that have been blocking the Doha Round of trade talks. The WTO's 148 members might have to meet again early next year because ministers look unlikely to make the progress they had hoped for. They are still hoping to avoid the kind of crushing disaster they faced at the last WTO ministerial meeting in Cancun, Mexico, in 2003. That meeting collapsed in disarray and acrimony, paralysing the global trade body for months. A previous 1999 ministerial meeting in Seattle also collapsed amidst sometimes violent street protests against the WTO.

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Publication:European Report
Geographic Code:4E
Date:Nov 11, 2005
Words:951
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