Farm trade continues to cloud WTO talks

EXIM MATTERS

It is now official. The draft declaration for the Hong Kong ministerial conference of the World Trade Organisation presented by WTO Director-General Pascal Lamy admits failure to establish modalities for concluding the Doha development round.

The global trade talks are stalled because the European Union (EU) says it has little room for more concessions on farm trade. The EU wants significant market access in manufactured goods and services, if it makes concessions on the agricultural side.

"WTO members need to adopt a new, broader and more inclusive approach to all aspects of negotiations," said EU Trade Commissioner Peter Mandelson. He also termed the various reports issued by the individual negotiating groups "unbalanced" and "unsatisfactory".

On the other side India and Brazil, claiming to represent poorer countries, refuse to move ahead on any issue unless the EU comes up with better offers to cut its farm subsidies.

Commerce Minister Kamal Nath has repeatedly said at no cost there will be any compromise on farm issues and that there cannot be a trade off in agriculture for any other gain at the WTO. The poorer countries also want guarantees against "box shifting", which is shifting subsidies from one category to another by richer countries.

The reports from six chairpersons of various negotiating committees annexed to the draft declaration speak of how difficult it is to get the trade talks moving. "You do not close divergences by taking time off to have a cup of tea. If you do so, you will find that everyone has moved backwards in the meantime. That, it seems to me, is a profound risk to our process," said Crawford Falconer of New Zealand, who chaired the WTO farm trade talks.

Iceland's Stefan Johannesson, chairman of the negotiating group for non-agricultural market access, said in his report that members were "far away from achieving full modalities" and described the situation "highly troubling".

The last meet of the WTO trade ministers failed at Cancun in Mexico two years back. The WTO can ill-afford another failure to get a consensus declaration from the trade ministers at the Hong Kong meet. So, the efforts to narrow the differences have acquired a sense of urgency, just two weeks before trade ministers start arriving at Hong Kong.

Last week, EU agriculture ministers bolstered the EU's negotiating stance in the world trade talks by agreeing to the first significant cut in European sugar subsidies in almost 40 years. The trade chiefs of the so-called Group of Four""the US, the EU, Brazil and India ""are due to meet at the end of next week in Geneva to seek to narrow their differences.

The possibility of an agreement on the principle of a three-band formula pledging greater cuts in farm subsidies by countries that pay out the most support and other loose pledges on industrial products and services cannot be ruled out.

After the failure at Cancun, the WTO trade ministers met at Geneva six months later and agreed on a "July package" that raised hopes of timely conclusion of the Doha round. This time, there is talk of another meet, three months after the Hong Kong meet, with a view to agree on modalities that will take the Doha round to conclusion by next year-end.

tncr@sify.com