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Monday, March 20, 2023
Ravi Kanth Devarakonda
GENEVA, May 23 2007 (IPS) - As fresh attempts are made to clinch an agreement in the stalled Doha trade negotiations, industrialised countries have launched a concerted drive to set aside core concerns of the developing countries, say trade ministers and diplomats.
At India’s trade policy review at the World Trade Organisation on Wednesday, New Delhi’s top trade official Gopal Pillai warned “unless the development dimension of the Doha Round is met and the developing countries prosper, global trade will always be at risk.”
Expressing concern over repeated demands by developed countries to seek “market access in developing countries of goods and services of export interest to them,” he underscored the need to abide by the mandate of the July Framework, agreed in 2004, and the Hong Kong Ministerial Declaration in 2005.
Over the last few weeks, the industrialised countries, led by the United States and the European Union, have insisted that unless the developing countries deliver far-reaching commitments to open their markets to industrial goods and services they wealthier nations will not be able to convince their domestic constituencies to undertake any commitments in agriculture.
Last week, trade ministers of the Group of Four – EU, United States, Brazil and India – remained at loggerheads during their two-day meeting in Brussels in attempts to come up with a palatable package that is in accordance with the Doha mandate, established at the WTO ministerial meet in the Qatari capital in 2001.
“The balance in the outcome is being increasingly shifted in favour of industrialised countries while developing countries are being asked to pay much more in market-opening for industrials and services,” the South African deputy trade minister Rob Davies told IPS, after attending an informal ministerial meeting in Paris last week.
Speaking to IPS, he said “the developing countries are being asked to pay for the distortions caused by the rich subsidizers in the global trading system, and India will not tolerate attempts to undermine the Doha mandate to clinch an agreement.”
“The developing countries want an agreement and an early end to the Doha Round, but we cannot accept attempts to undermine the Doha mandate of 2001 which was further elaborated by the July 2004 framework agreement and the Hong Kong Ministerial Declaration of 2005 to secure an agreement,” he argued.
Brazilian foreign minister Celso Amorim, who is also the coordinator for the developing country coalition G20, says he wants all key players in the Doha negotiations to “show tolerance” towards other members’ concerns.
At issue is whether the developing countries should agree to undertake steeper commitments to open their markets for industrial goods and services for whatever limited efforts undertaken by the EU, United States and Japan to cut their billions of dollars of farm subsidies.
The Paris-based OECD (Organisation for Economic Cooperation and Development) had estimated that the combined farm subsidies of all industrialised countries amount to one billion dollars per day.
Under the Doha mandate, the EU and United States are required to undertake what are called “effective” cuts in their trade-distorting domestic subsidy programmes.
But the U.S. is unwilling to agree to such cuts and has refused to suggest until now the final figure to bring its overall trade distorting domestic support (OTDS). The OTDS is a combination of different farm subsidies that are categorized into most-trade-distorting, minimally trade-distorting, and least trade-distorting.
Last year, the Doha trade negotiations were suspended because the United States chose to place on the table a revised figure to cut its farm subsidies as compared to what it had suggested in October 2005 when it agreed to bring down its domestic farm subsidies to little over 22 billion dollars annually.
The G20 had demanded that the United States reduce its farm subsidies to around 12 billion dollars, which Washington deemed unacceptable, trade diplomats said.
In an attempt to advance the Doha trade negotiations, the chair of the Doha farm trade negotiating committee, Ambassador Crawford Falconer of New Zealand, said in his challenges paper that the “centre of gravity” for reducing the U.S. farm subsidies lie between the “low teens and 19 [billions of dollars].”
Even though the effective farm subsidy payments of the United States amounted to less than 12 billion dollars last year, according to a Canadian study, the U.S. demanded that it should be allowed to have its subsidy programmes over 22 billion dollars.
Many developing countries, led by Indonesia, India, Philippines and Argentina, chided the chairman’s paper on the ground that it treated the U.S. subsidies with kid gloves, arguing that Falconer’s proposal doesn’t have any teeth to convince Washington to address its farm subsidies – which are at the heart of major trade distortions in global farm trade.
In 2005, the WTO’s highest appeals court ruled against U.S. subsidies in a cotton dispute raised by Brazil, saying emphatically that Washington’s support of almost six billion dollars caused “adverse effects” on other major cotton-producing nations.
The committee chairman also has set an average benchmark of 50 percent and above for the EU and industrialised countries to cut their agricultural tariffs, a level that is well below what the developing country coalition had demanded until now.
The South African minister expressed concern about the reduced ambition in agricultural trade talks while the stakes were being upped in non-agricultural market access and services. “We see no real movement of key farm subsidising countries to address their domestic subsidies and high tariffs, but find they want an ambitious deal in market opening for industrials and services,” he said.
He blamed Doha agricultural negotiations chair Falconer for adopting a “centre of gravity” concept which revolves around what the two biggest players – the EU and United States – are seeking at this juncture and asking developing countries to deliver more on market access for industrials and services.
Unless there is proportionality as set out in the 2005 Hong Kong ministerial declaration between agriculture and market access for industrials, the developing countries should not accept the game plan of the industrialised countries, he said.
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