TRADE: G20 Negotiating Capacity Could Bring Surprises in Hong Kong

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Aug 29 2005 (IPS) - Although the negotiations ahead of the sixth WTO ministerial conference point to failure, past experience shows that surprises cannot be ruled out, says Gilman Rodrigues, a leading representative of Brazil’s agricultural producers.

His hopes are based on the negotiating capacity of the Group of 20 (G20) developing countries which, led by Brazil and India, has presented proposals aimed at reducing the distortions in global trade caused by the rich world’s farm subsidies and trade barriers.

“We are in the hands of the G20,” Rodrigues said in an interview with IPS.

As chairman of the foreign trade commission of Brazil’s National Confederation of Agriculture and Livestock (CNA), Rodrigues represents the country’s agricultural exporters in the trade talks.

“I saw the overwhelming disappointment in Seattle,” the U.S. city that hosted the World Trade Organisation (WTO) ministerial conference in 1999, and “the negative outcome in Cancún,” Mexico, where the 2003 meeting was held,” but “I also witnessed the surprise in Doha,” he remarked.

It was in the fourth WTO conference held in the capital of Qatar, in 2001, that the current Doha Development Round of multilateral trade talks was launched on foundations considered promising for developing countries.

The Doha Round also cleared the way for negotiations on reducing agricultural protectionism and on making patent rights on medicines more flexible in the case of public health emergencies.

Hopes for progress in the talks are now pinned on the next WTO conference, slated for Dec. 13-18 in Hong Kong. Pre-conference meetings in July were supposed to give rise to a first draft of the agreement to be signed by the ministers of the 148 WTO member states, but a minimum level of consensus was not reached.

The overall mood is one of pessimism and predictions of a new failure, but unexpected deals could be struck at the last minute, said Rodrigues, who underlined his approval and support for the performance of the G20 bloc, which has set forth proposals for agricultural trade with no distorting subsidies or “exaggerated protectionism.”

Agriculture has become the key issue in the Doha Round, largely due to the action of the G20, which is now one of the main players in the talks, along with the United States and the European Union.

The bloc’s main proposals would involve phasing out export subsidies over the next five years, scaling down domestic production supports that distort trade, and drastically reducing the prohibitive tariffs set by industrialised countries on some farm products.

Among the concrete proposals are proportional cuts in five tariff bands, and a tariff cap of 100 percent (import duties now exceed 700 percent in some cases).

But countries like Japan and Switzerland, which impose duties so high that they effectively block imports, are opposed to any tariff cap.

The negotiations are complex, because an agreement will require a consensus among 148 countries.

The resistance to freer agricultural trade varies in shape and form, Rodrigues noted. While the EU spends abundantly on export subsidies, the United States “likes internal supports and goes overboard on its antidumping measures,” said Rodrigues. (Dumping is the export of products at prices deemed artificially low).

But the negotiations are now taking place in a new scenario, since Brazil triumphed in its complaints before the WTO against EU subsidies for sugar and U.S. supports for cotton farmers.

In the Doha Round, Brazil and the G20 must not accept accords containing conditions that are less favourable than those set by the WTO dispute settlement body rulings in the cases involving sugar and cotton, argued Rodrigues.

In his view, the G20 is doing a good job negotiating. He pointed out that the diversity of the bloc’s makeup allows it to be more flexible than the Cairns Group, which has linked 18 agricultural exporting countries in the fi ght against farm subsidies since 1986.

The G20’s strength and legitimacy derive from several factors, according to an analysis by the Institute for International Trade Negotiations (ICONE), a think tank founded by Brazilian business associations.

In the first place, ICONE mentions the weight of the bloc’s members, which account for 60 percent of the world population and 26 percent of global farm exports. It also underscores the G20’s capacity to represent the interests of developing countries, as well as its demonstrated negotiating ability.

The G20 is a heterogeneous but geographically balanced bloc, made up of nine countries from Latin America, six from Asia and five from Africa. Besides Brazil and India, its members include China and other large countries like Argentina, Egypt, Indonesia, Nigeria and Pakistan.

Born in August 2003, on the eve of the ministerial meet in Cancún, the group broke up the hegemony enjoyed by the industrialised powers in the multilateral trade talks.

Although it comprises both large agricultural exporters and net importers, which would apparently have different interests and which resort to varying levels of protectionism, the G20 is united in the fight against farm subsidies and in favour of greater access to agricultural markets, stated the authors, ICONE directors André Nassar and Maria Helena Tacchinardi.