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DEVELOPMENT: Food Crisis Linked to Doha Deal

Aileen Kwa

GENEVA, May 8 2008 (IPS) - The issue of rising food prices was raised at the WTO&#39s General Council meeting Wednesday, and for the first time, discussed in some detail. But there remains, as one African delegate put it, "a lot of confusion about the rising prices of commodities and the Doha Round. Somebody needs to demystify the links. The D-G (Director-General) is using this as a bait to catch us on concluding the Round as soon as possible."

At the WTO General Council meeting, the Director-General Pascal Lamy said a quick conclusion of the Doha Round was a means of offering "medium to long-term solutions to the current crisis…We all aim to substantially lower barriers to trade in agricultural products and diminish levels of trade distorting subsidies, particularly in developed countries that have hampered food production and investment in agriculture in many developing countries. This is doable and we are nearly there."

Should the Doha Development Round (the negotiations towards concluding a single global trade agreement launched in Qatar capital Doha in November 2001) be completed, Lamy asserted that "the overall outcome would be less distortion in world markets and increased international trade, leading to more rapid and efficient adjustment by supply to changes in demand."

"The food crisis really has nothing to do with the DDA (Doha Development Agenda)," said a developing country delegate. "In fact, what they should do is to give us more Special Products so that we protect those products and try to be efficient in food production. That should be the way to go around it so that we should produce more food."

Forty-six developing countries at the WTO, the G33, have long been arguing for the protection of a range of Special Products (SPs) from tariff cuts. These are products such as rice, wheat, soya and dairy products that are important for food security, rural livelihoods and employment.

"The D-G is talking about removing the distortions," the delegate said. "Yet this will not address the supply-side constraints. How then will the problem be reduced? I don&#39t think we should hurry to conclude the Round because of the rising prices of commodities."

Another developing country delegate, also speaking off the record, said that the G33 has been talking about SPs and the Special Safeguard Mechanism (SSM) for the past six or seven years. The Special Safeguard Mechanism allows countries to increase tariff levels in the event of import surges. "If we had been heard and taken seriously way back then, maybe we would not have this crisis now."

Referring to those citing the crisis as a reason for forcing the Round to a rapid conclusion, he said "they are talking about shifting supplies around. We are talking about production and how we can increase our own production to meet domestic demand. That is the long-term solution."

Last week, the Swiss and Japanese delegations had put forward a proposal in the WTO calling for limits on the extent to which countries could put in place export restrictions in agriculture. In recent months, a number of countries have placed export bans or increased export taxes on rice, maize, corn, wheat, soy and other commodities.

These countries include Argentina, Cambodia, China, Egypt, Ethiopia, Guinea, India, Indonesia, Kazakhstan, Malawi, Russia, Serbia, Tanzania, Ukraine and Zambia.

Apart from the European Union, a large number of countries said that they could not support the Japanese and Swiss proposal on the grounds that they wanted to have policy space. Those very strongly opposed included Argentina, Brazil, India and China. So far, WTO rules have been more stringent about reducing countries&#39 import barriers, but have permitted countries more policy space in the area of controlling their exports.

At the General Council meeting Wednesday, a significant number of developing country delegations did support the D-G&#39s position that a quick conclusion of the Doha round would aid the food crisis. Uruguay, which traditionally has been pushing for more rapid agricultural liberalisation, reportedly made a long statement stating that Doha would reduce subsidies for inefficient production and create a more equitable food trading system. Should members miss concluding the round by 2008, Uruguay ambassador Guillermo Valles Galmés said, it may take another 10 to 15 years for the round to be re-launched.

Brazil, also keen to conclude the round, said that Doha, by helping remove trade distortions, can help in reducing the food crisis, provided development is at the heart of the negotiations. Likewise Mexico&#39s ambassador Fernando Mateo said that trade liberalisation was not the cause of the food crisis, but is part of the solution. China also cited the food crisis as a reason for a quick Doha conclusion. For them, the issues of Special Products and the Special Safeguard Mechanism were central.

The Indian delegation commented on Doha, but did not mention any links to the food crisis.

According to WTO spokesperson Keith Rockwell, given the tight timelines, it is doubtful that ministers (a selected number) will meet in Geneva in May. But such a ministerial is being planned for the coming weeks.

Negotiators in Geneva are attempting to race through the sticking issues in the agriculture negotiations. According to the D-G&#39s plan, revised texts will then be issued. There will be some time provided for these texts to be considered within the negotiating groups. Senior officials will then be called to Geneva, leading to a mini-ministerial meeting.

Most speculate that the ministerial will take place in July. The Swiss authorities have refused to host such a ministerial in June given that Switzerland is hosting the European soccer tournament that month. They have said their security forces will be completely occupied with that event.

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