Rich nations get off easy in WTO draft - aid groups

Original Publication Date: 
17 July, 2007
GENEVA, July 18 (Reuters) - Poor-country advocates on Thursday accused global trade talk mediators of treating Europe and the United States with kid gloves in proposals meant to broker consensus toward a new World Trade Organisation pact.

They said the draft texts, circulated by the chairmen of the WTO's stalled agriculture and industrial goods negotiating groups on Wednesday, do not press the United States and European Union hard enough to cut farming subsidies and tariffs that skew prices and make it impossible for poorer nations to compete.

Focus on the Global South, an advocacy group based in Bangkok, said nations such as Indonesia, India and Mexico were being told to slash farm tariffs too much, aggravating income gaps between cities and countryside, while the United States and EU were "let off the hook".

Oxfam International said poor nations were also being pushed to expose their manufacturing sectors to foreign competition too quickly, undermining their chance to develop local industries.

"The overall cost of developing countries of opening their agricultural and industrial markets remains far too high in return for the modest reforms in agriculture in rich countries," Oxfam said in a statement.

"These new numbers would leave rich countries' trade protections largely intact while forcing many developing countries to face severe adjustment costs and failing to create for them new opportunities," the British-based aid group said.

The WTO mediators proposed that U.S. farm subsidies be capped at up to $16.4 billion, compared to the $17 billion Washington has offered. The EU would have to cut its farm import tariffs by about 64 percent.

Most developing nations, in turn, would have industrial goods import tariffs of 12 percent on average, much lower than the ceiling countries such as Brazil and India have sought.

The texts did not specify how many "special" products poorer nations could exempt from agricultural tariff cuts.

'EXTREMELY BAD PROPOSALS'

But just as development campaigners were protesting, Europeans were saying the proposals were unfair to them.

Mary Coughlan, the agriculture minister of Ireland which has long sought to defend its beef farmers from big concessions at the WTO, expressed "serious concern" about the text and said EU agriculture "must not be sacrificed in any final WTO deal."

The region's biggest farmers group said the proposals seemed designed to help U.S. farmers and would hurt EU production.

"These are extremely bad proposals on market access for the EU," said Shelby Matthews, director of commodities and trade at the COPA-COGECA European farmers association.

European business also expressed frustration.

Adrian van den Hoven, trade director at BusinessEurope, said developing countries would be able to shield entire sectors from foreign competition under the proposals, denying European exporters access to key markets.

Negotiators are due to convene for a brief session in Geneva next week and then recess until September, when diplomats will use the texts as a basis for a final push to a new global pact, which was launched in Qatar in 2001 to boost trade in farming, industry and services, and help poor nations export more.

WTO Director-General Pascal Lamy has said the talks could be put on ice for several years if there is not a breakthrough by the end of 2007, after which time U.S. and Indian negotiators may have their hands tied by elections in their countries. (Additional reporting by William Schomberg in Brussels)