Tags: Trade | Chief | Warns | WTO | Talks | Trouble

EU Trade Chief Warns WTO Talks in Trouble

Friday, 16 December 2005 12:00 AM

HONG KONG -- The European Union trade chief on Friday warned that global trade talks were "going backwards," as developing nations threatened to reject any World Trade Organization deal that fails to protect their cotton, banana and sugar farmers.

Meanwhile, protesters scuffled with police outside the U.S. Consulate, throwing eggs at the building and covering it with graffiti. Demonstrators have been protesting daily since the six-day WTO talks began Tuesday. So far, the activists haven't caused the chaos and damage that marred past WTO meetings.

The talks have barely made any progress on how much to cut trade barriers in any of the three main areas WTO members were expected to address: agriculture, manufactured goods and services. Since the 149-nation WTO operates by consensus, the impasse could undermine the outcome of the meeting that wraps up Sunday.

"It is hard to see where progress can be achieved in Hong Kong if the talks continue in this direction," EU Trade Commissioner Peter Mandelson said. "The level of ambition, if anything, is going backwards."

The latest blow came Friday when the Group of 77 African, Caribbean and Pacific countries, many of whose populations are subsistence farmers relying on crops such as sugar, cotton and bananas, demanded safeguards for commodity growers and continued preferential access to European markets.

"We will not be a party to any consensus that that does not recognize our right to grow bananas," said Charles Savarin, Dominica trade minister. "We must preserve our traditional access to the EU markets."

The EU's system of tariffs and quotas favors Caribbean and African banana producers over large-scale growers in Latin America, which the WTO has ruled violates world trade rules.

Caribbean and African countries say ending the preferences could destroy their domestic banana industries, which are mostly small-scale family farms. But Honduras has threatened to reject any global trade deal that preserved the preferences.

Warning that trade talks risk failure, a broad group of nations including India, Brazil and Australia urged fellow trade delegates to refocus on resolving the "core" issue of farm trade, where talks have been stalemated for months. Members so far have spent considerable time discussing aid proposals for the world's poorest countries.

The United States and EU are holding up the talks by failing to offer more cuts in government support for their farmers, members of the Group of 20 leading developing nations and the Cairns Group of major food exporters said in a statement. Developing countries say rich nations' farm subsidies and tariffs block their access to those lucrative markets.

"There are many hundreds of millions of people across the world living in poverty-stricken countries who are looking to us to improve their opportunities by negotiating better market access," said Mark Vaile, trade minister of Australia, a member of the Cairns Group.

The United States has offered to eliminate government export subsidies for U.S. farm products by 2010 and to reduce by 60 percent the amount of trade-distorting domestic support the government provides farmers over the next five years. Developing nations say the U.S. offer is hollow because subsidy spending at current levels could continue.

Mandelson said the EU would not alter its stance, which includes offering an average cut of 46 percent in farm tariffs.

"We are going to stick to our position," he said, adding that developing nations seem to expect the EU to settle for fewer opportunities in industrial trade while agreeing to make more concessions in agriculture.

In a modest sign of progress at the meeting, negotiators agreed on a draft text for a package that would give 32 of the WTO's least developed nations duty-free, quota-free market access, officials said. The text now needs to be adopted by the full body.

But in a step back, the revised draft includes no specifics on when the measures would be implemented or what products would be covered, according to a copy of the text obtained by the AP on Friday.

The United States and Japan both had cited concerns - Washington about textile imports from Bangladesh, Tokyo about rice imports, delegates said.

The issue of duty-free and quota-free access is a key component of this round of trade talks, called the Doha round, which was launched in Qatar's capital in 2001 and is meant to address the concerns of developing countries, who say they lost out in previous WTO negotiations.

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HONG KONG -- The European Union trade chief on Friday warned that global trade talks were "going backwards," as developing nations threatened to reject any World Trade Organization deal that fails to protect their cotton, banana and sugar farmers. Meanwhile, protesters...
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Friday, 16 December 2005 12:00 AM
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