TRADE: Inching Towards a Conclusion of the Doha Round – Maybe

By IPS Correspondents Reprint | | Print |

Joyce Mulama

NAIROBI, Mar 5 2005 (IPS) - Officials who attended two days of trade talks in Kenya have given a mixed verdict on the outcome of the discussions. While some described the meeting as productive, others said little progress had been made in resolving problems that have dogged the latest round of international trade negotiations since it got underway in 2001 in Doha, Qatar.

These problems include a dispute over agricultural subsidies, primarily those awarded by the United States and the European Union (EU) to their farmers.

Developing countries say these subsidies drive down commodity prices to levels at which their own farmers cannot compete, depriving poor states of a key source of income. According to global aid agency Oxfam, this has occurred even as developing states have reduced their own tariffs on agricultural imports: the group claims these tariffs were cut from an average of 30 percent to 18 percent between 1990 and 2000.

In light of this, poor countries believe the U.S. and Europe must pledge an end to subsidies before discussions about trade liberalization in other areas can proceed.

However, negotiators from wealthy states argue that talks about opening up the service sector must proceed in tandem with negotiations about subsidies. An agreement on this matter would give these countries coveted access to a variety of services in the developing world, including financial and educational services.

The EU and other parts of the developed world are also pressing for reduced tariffs on industrial goods that are imported into developing states. This has prompted fair trade activists to accuse them of having double standards.

“The EU is completely ignoring the fact that developed countries themselves liberalized in a gradual way using a number of policy instruments including tariffs, which they are now denying developing countries,” said Peter Aoga of EcoNews Africa, a Nairobi-based body.

The-two day meeting took place Mar. 3-4 in the coastal town of Ukunda. It was held under the auspices of the World Trade Organisation (WTO), and attended by representatives from 33 countries.

As with previous WTO meetings, protesters made their presence felt at the talks. About 500 activists and farmers marched on the venue where negotiations were being held to demonstrate against unequal terms of trade. Clashes with the police ensued, and 43 protesters were arrested by authorities who charged them with creating a disturbance.

“We expect the rich countries to give a specific date stating when they are removing these (farm) subsidies…We do not want words, we want action,” Oduor Ong’wen, country director of the Southern and Eastern African Trade Information and Negotiations Institute, told IPS. This body advocates for fairer trade policy towards Africa.

However, a ray of hope for developing states came Thursday with a decision by the WTO to confirm its ruling against subsidies for American cotton farmers.

The complaint against the U.S. was initially brought by Brazil, with the support of several cotton producers from West Africa: Mali, Chad, Benin and Senegal. Oxfam claims that Washington spends about 3.5 billion dollars each year on cotton subsidies.

“We are happy to hear the ruling. But there is no deadline; this is something that needs to be implemented soon. Elimination of subsidies should not only be on cotton but should apply to other crops as well,” Sophie Powell, an Oxfam policy co-ordinator for Africa, told IPS from Ukunda.

Delegates at this week’s trade talks have reportedly set July as the deadline for drawing up a plan to reduce subsidies, industrial goods tariffs and the like – this ahead of a biannual meeting of trade ministers from all 148 WTO members that is scheduled to take place in Hong Kong, in December.

The trade ministers constitute the highest decision-making authority of the WTO.

A ministerial meeting held in the Mexican resort of Cancun in 2003 collapsed as a result of the ongoing feud over farm subsidies. However, there are hopes that productive talks this year could see the Doha round being concluded by 2006.