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Fears of breakdown as agriculture talks reach climax

By Anthony Fletcher , 04-Jul-2006

The US is pushing to insert a special clause in trade negotiations in Geneva this week that would make its use of farm subsidies immune from prosecution, according to Oxfam.

The pressure group claims that the so-called 'Peace Clause' is effectively a license to dump heavily subsidised farm goods, because it prevents other WTO member countries from challenging the farm subsidies through the WTO dispute settlement process.

"Giving immunity from legal challenges gives the green light to the US and EU to break the rules, leading to market distortions that hurt poor farmers," said Celine Charveriat, head of Oxfam's Make Trade Fair Campaign.

 

"This is another nail in the coffin for development in this Round."

 

Last minute negotiations at the World Trade Organisation's Hong Kong Ministerial in December resulted in an interim agreement. As the Doha round of global agricultural trade negotiations finally reaches its climax, everyone is beginning to feel the heat.

 

"It is the moment of truth," said WTO director general Pascal Lamy at a recent press conference. "I don't think we can postpone the decision anymore.

 

Responding to questions regarding a possible delay, Lamy said that "later is too late."

 

But whether an effective decision can be reached this week remains to be seen. There remain significant differences between various trading blocs - the EU trade commissioner recently called the US the 'biggest single block' to the successful completion of the round.

 

And organisations such as Oxfam are concerned that the interests of global agriculture will take a back set to the interests of the developed world.

 

"A new Peace Clause will be a step back for development," claimed Charveriat.

 

"The US and EU currently pay at least $13bn (Oxfams Truth or Consequence Briefing Paper, 2005) worth of illegal subsidies for agriculture. If the Peace Clause were reintroduced, no poor country would be able to take them to the WTO court for this, for possibly up to 10 years."

 

The US said last week that it needs the Peace Clause to be renewed to protect itself from litigation while it is in the process of reducing its trade-distorting subsidies. But Charveriat said that members of the WTO should make a stand.

 

"The Doha Mandate laid out what was, and was not, going to be included in this round of trade talks. You can't just put something on the table at the last minute that totally undermines what has already been agreed," she said.

 

Oxfam claims that 38 developing countries are suffering from unfair competition as a result of trade distorting subsidies by the EU and US, including larger countries such as Mexico and Brazil.

 

The Peace Clause was introduced at the eleventh hour during the Uruguay Round as a 'take-it-or-leave-it' condition for signing a deal. That Peace Clause elapsed in 2003.

 

Lamy again urged delegates to reach a decision. "We now have a once in a generation opportunity to correct the imbalances in multilateral trade," he said.