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TRADE: G20 Jumps into Agricultural Reform Debate

Gustavo Capdevila

GENEVA, Oct 11 2005 (IPS) - The WTO multilateral trade talks have moved into a decisive new phase now that all three international trade heavyweights have entered the ring: the European Union, the United States, and the Group of 20 (G20) developing countries.

The G20, the last to weigh in, announced Tuesday that it will be presenting its own numbers this week, which should help spur negotiations on the controversial issue of agriculture, an ever-present hurdle to the World Trade Organisation (WTO) Doha Round of negotiations on trade liberalisation for almost four years.

Brazilian Foreign Minister Celso Amorim, who coordinates this group of developing countries along with Indian Minister for Commerce and Industry Kamal Nath, noted that the presentation of these figures will serve as the G20’s response to the offers put forward this week by the United States and the European Union.

So far, discussions had focused on structures, noted Amorim, but now that the major partners in the multilateral trade system have agreed upon the structural bases for negotiating, “we are moving now from that stage to presenting concrete numbers.”

For the first time since the process to reform the WTO Agriculture Agreement began in January 2000, and also since the start almost two years later of the Doha Round of negotiations, the organisation’s 148 member states are finally discussing hard figures..

On Monday, the United States offered to lower its import tariffs by between 55 and 90 percent, and to cut the subsidies it provides its farmers by 60 percent, but only if the EU and Japan reduce theirs by 80 percent, as it considers them to be currently higher.

The EU’s counter-offer consists of cutting its highest food import duties by one half and reducing domestic farm supports by 70 percent.

The G20, which includes emerging powers like China and South Africa, as well as India and Brazil, had already put forward a proposal in July based on tariff cuts split into different categories in accordance with the current amount of those tariffs, with greater reductions in the higher categories.

The exchange of offers and counter-offers will continue throughout this week and next at a series of meetings among ministers who have travelled to the WTO headquarters in Geneva specifically for this purpose.

Amorim acknowledged that some concrete results could arise over the next two weeks, although he underlined that the deadline for reaching a preliminary agreement on agriculture is Dec. 18, at the end of the sixth WTO Ministerial Conference.

In the meantime, the WTO member states have until the end of 2006 to reach a global agreement through the Doha Round. In addition to agriculture, the negotiations, launched in the Qatari capital in December 2001, also involve questions like services, industrial tariffs, intellectual property and development-related aspects.

With regard to the latter, the G-20 maintains that special and differential treatment for the developing countries must be an inherent part of all facets of the talks on agriculture.

Amorim stressed that there are two inseparable aspects involved, namely the G-20’s ambitious goals for market opening and tariff reductions, and special and differential treatment that takes into account not only the imbalances stemming from trade distortions but also unequal levels of development.

The G-20’s response to the offer made Monday by the United States is that it was a “positive step,” but still insufficient.

Amorim noted that it was good that the United States had broken the silence it had maintained until now, but underscored that with regard to domestic supports, the weak point in U.S. agriculture, the proposal put forward “doesn’t lead to real cuts in budgetary expenditures.”

“When the man and woman on the street look at these numbers, they want to see whether the overall distorting support actually diminished,” he remarked.

“I think this is an essential part of the mandate, and I think that it’s not yet clear,” he added.

For his part, Nath underlined the role played by the G20 since its creation in August 2003. The bloc’s membership does not reflect a single interest, but rather a diversity of interests, which is what gives the group its credibility, he remarked.

The G20 is made up of Argentina, Bolivia, Brazil, Chile, China, Cuba, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, the Philippines, South Africa, Thailand, Tanzania, Uruguay, Venezuela and Zimbabwe.

The G20 ministers believe that the momentum taken on in the negotiations could force the EU to improve its offer in terms of market access.

According to the international development agency Oxfam, the offer already tabled by the EU implied no real gains for the poor nations.

“The EU talks about the need for balance but we’re very worried that developing countries are being pressured to give up far too much,” said Celine Charveriat, head of Oxfam International’s Make Trade Fair Campaign.

“The EU, like the U.S., is simply proposing to move payments from one place to another, rather than reduce them. We’re very concerned that the losers from this renaming game will be poor country farmers,” she added.

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