July 23, 2008


Emerging economies spurn US move at advancing WTO talks



Industrialized countries and emerging economies failed to find common ground on global trade Tuesday, with Brazil shooting down a US proposal a day after a European Union initiative went nowhere.


The US Tuesday (July 22) offered to cut official aid to its farmers by $2 billion to $15 billion a year in a bid to spur movement at World TO trade talks but found no support from key player Brazil.


"Nice try," said a member of the Brazilian delegation, adding that the proposed new level was "still too high." Brazil has been acting here as an unofficial spokesman for emerging and developing countries.


Tuesday's exchange, highlighting an ominous gulf between developed and emerging market countries, came as ministers from around 35 nations met in Geneva to break a seven-year deadlock in the Doha round of trade liberalization negotiations.


Emerging markets have voiced deep frustration at what they say have been inadequate offers on market-opening measures from rich participants such as the United States and the European Union.


But on Tuesday, US Trade Representative Susan Schwab said the world's largest economy was now prepared to cut its farm subsidies in exchange for an "ambitious market access outcome."


She stressed that the offer was conditional on improved access to emerging markets for industrial products and a guarantee that US farm subsidies would not face any further legal action at the WTO.


"These reductions are not offered in isolation and must be accompanied by significant market openings" in both agriculture and industrial products, she said.


The EU welcomed the US move but said there was still room for more flexibility from the Americans as talks continue throughout the week.


"This is a reasonable offer at this stage," said EU trade spokesman Peter Power.


"It is not the furthest the US could go, but we assume this depends on the remaining negotiations and a balance being achieved in other sectors," he added.


Non-governmental organizations were scathing in their reactions however, with the Geneva-based Institute for Agriculture and Trade Policy branding it "absurd" and Oxfam International saying it was "vastly inadequate."


"Fifteen billion (dollars) is around twice what the US is spending at the moment. They would not have to cut a penny off current subsidies as a result of this offer," said Jeremy Hobbs, executive director of Oxfam International.


Hobbs also denounced the US bid to secure immunity from any further WTO legal action as "tantamount to admitting intention to break the rules in the future. It adds insult to injury."


The US overture came after an abortive attempt by EU Trade Commissioner Peter Mandelson to jolt the talks into movement Monday with an announcement that the European Union was now ready to extend tariff cuts on agricultural products to 60 percent from 54 percent.


But even Mandelson's fellow EU commissioner Mariann Fischer-Boel said the offer was "nothing new" and Brazil dismissed it as "propaganda."


The EU, as is the US, is linking concessions in farm trade to steps by emerging countries to take in more manufactured goods.


Argentine negotiator Nestor Stancanelli said he saw "real negotiations" as beginning only Tuesday, pointing to the Doha round's NAMA component - covering industrial products - as a main sticking point.


"The NAMA text, for many of us, does not reflect the positions of many members ... The NAMA text is presented as if it were already a result," he said.


Meanwhile, the negotiating process was further hampered by the absence of Indian Commerce Minister Kamal Nath, an important participant who was in New Delhi for a crucial no-confidence vote sparked by left-wing opposition to a nuclear energy deal with the US


India's Commerce Secretary Gopal Pillai told AFP Nath was due in Geneva early Wednesday.

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