WTO COMPROMISE ON AGRICULTURE WILL UNLOCK MAJOR TRADE BENEFITS

By Pascal Lamy Reprint | | Print |

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GENEVA, Jan 1 2007 (IPS) - Many proposals have already been presented at the Doha Round Negotiations, but clearly what is on the table today is not enough to lead us to success. All parties need to make a greater contribution, starting with agriculture, writes Pascal Lamy, Director-General of the World Trade Organisation . In this article, the author writes that the US has to accept cuts in its subsidies beyond its current offer, as do the EU and the G-10. India and the G-33 countries also have to show flexibility. Indeed, if we are to reach a result, all Members have to show flexibility. No one is being asked to undertake disproportionate commitments, and certainly there is the flexibility to address for specific needs and concerns. With an additional effort we can unlock agriculture which in turn will open the last stage of talks on the other topics. This Round offers the largest cuts ever on tariffs on the industrial sector, which represents a large part of developed countries exports and holds the promise of reformed antidumping procedures to enhance transparency and predictability. For the first time ever it tackles fishery subsidies which increase capacities and contribute to the depletion of our oceans. It also goes deeper in opening telecommunications and financial, environmental, and a broad range of business services.

The basic premise underpinning the WTO is that market opening is good. The multilateral trading system helps to increase economic efficiency and can also help reduce corruption and bad government. Trade has played an increasing role in the world economy over past decades, as illustrated by the fact that the growth of real trade has exceeded that of world output. The ratio of world exports of goods and services to GDP rose from 13.5 percent in 1970 to 32 percent in 2005, and all major geographic regions recorded an excess of trade over output growth.

But the challenge of market opening and globalisation for developing countries calls for enhanced international action. A fundamental aspect of the current Doha Round is to correct some of the remaining imbalances in the current trade rules in favour of developing countries and to improve rules that will provide all Members and, in particular, developing country Members, with authentic market opportunities.

A number of the substantive rules of the WTO do perpetuate some bias against developing countries. This is the case in the agriculture sector, which today holds the key to unlocking the rest of the DDA. How can agriculture, which represents less than 8 percent of world trade, derail the entire Doha Round agenda? It is because food production remains a very sensitive sector for rich and poor countries alike.Given that the current Round is one of development and more than 70 percent of the world’s poor live in rural areas, there is no way the DDA can continue if the existing agriculture bias in favour of rich countries is not properly addressed. Reforming agriculture rules is necessary to ensure our sustainable development.

This is the reason why, in the Doha mandate, all WTO Members agreed in 2001 that the long-term objective is to establish a fair and market-oriented trading system through a programme of fundamental reform encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets.

Similar bias exists with regard to the remaining tariff peaks and high tariffs imposed by developed countries on sectors such as textiles and clothing, where a large number of developing countries have a comparative advantage. The new rules on market access for non-agricultural products (NAMA) would address these peaks to benefit exports from developing countries.

Completing the Doha Round is crucial for both developed and developing countries as a fundamental tool to control and harness globalisation and to ensure our sustainable development. Concluding it is understandably difficult. It is the most ambitious attempt by governments to open trade multilaterally both in the broadness of its scope, including on agriculture, and in the number of countries that are negotiating and that will share in the results. The previous Round, the Uruguay Round, wrote in 1994 the modern rule-book for the trading system, and the Doha Round is using it ten years later to open trade and lock-in reform on an unprecedented scale.

This Round offers the largest cuts ever on tariffs on the industrial sector, which represents a large part of developed countries exports, through a combination of a powerful reduction formula and deeper cuts on selected sectors. It holds the promise of reformed antidumping procedures to enhance transparency and predictability. For the first time ever it tackles fishery subsidies which increase capacities and contribute to the depletion of our oceans. It also goes deeper in opening telecommunications and financial, environmental, and a broad range of business services.

Many proposals have already been presented at the Doha Round Negotiations, but clearly what is on the table today is not enough to lead us to success. All parties need to make a greater contribution, starting with agriculture. The United States has to accept cuts in its subsidies beyond its current offer, as do the EU and the G-10. India and the G-33 countries also have to show flexibility. Indeed, if we are to reach a result, all Members have to show flexibility. No one is being asked to undertake disproportionate commitments, and certainly there is the flexibility to address for specific needs and concerns. With an additional effort we can unlock agriculture which in turn will open the last stage of talks on the other topics. (END/COPYRIGHT IPS)