Time running out for global food trade breakthrough

By Anthony Fletcher

- Last updated on GMT

Related tags Hong kong International trade World trade organization

Time is running out in the race to achieve an effective and
long-lasting agreement on global agriculture and tariffs.

In a speech to the Committee on International Trade at the European Parliament this week, WTO director general Pascal Lamy said that final deadlines were fast approaching.

"We are now faced with a difficult situation,"​ he said. "The Hong Kong Ministerial Declaration has called on countries to complete the 'modalities' for the agricultural and industrial goods negotiations by 30 April.

"We are only 40 days away from our end of April deadline. We all know what we must do to take these negotiations forward."

For these deadlines to be fulfilled, Lamy argues that all actors will need to move.

"To unblock agriculture, the US needs to move on domestic support, and the EU on market access. India, Brazil and other big developing countries, need to show greater flexibility on industrial goods."

Lamy said that if this deadline were to be missed, trade liberalisation on the scale envisaged by the Doha Round would become impossible to achieve in the near future. The biggest loser, he said, would undoubtedly be the WTO.

"In other words, the system that has served the collective interests of 150 different members, and that has ensured a trade opening that is adapted to changing realities and that is based on a consensus between us all."

Lamy said that the WTO's Hong Kong ministerial conference did lead to some progress.

"Hong Kong represented a modest success,"​ he said. "In fact, its outcome could have only been either a modest success, or a serious failure."

In agriculture, Hong Kong secured a deal that involved all three pillars of the negotiations; namely, export subsidies, domestic subsidies, and tariffs. Countries agreed on the elimination of export subsidies by 2013, with the removal of a substantial part by 2010.

In Hong Kong, members also agreed to make 'effective cuts' in trade-distorting domestic support. It was also agreed that the biggest subsidisers would cut their subsidies the most, with the EU, the US and Japan making the highest reductions.

But with respect to tariffs, there was limited progress. The size of the tariff cuts to be made remains outstanding.

"So what then are the issues in agriculture that remain outstanding? First, is the magnitude of the reduction that will be made in agricultural subsidies in both Europe and the United States.

"Second, is the magnitude of the tariff reduction that will be required for agricultural products, and the treatment of sensitive and special products for developing countries."

It is now a question, said Lamy, of agreeing on numbers. At the G6 meeting in London last week, countries started sharing the simulations that they had been working on.

"Just as we speak, agricultural negotiators are meeting in Geneva, to test these numbers.

"The possibility of closing a deal - deciding on whether to succeed or to fail in the negotiations started over 4 years ago now - will be decided in the coming 40 days."

Lamy concluded by saying that there was no more time to lose.

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