One year after Hong Kong: trade talks at standstill, no progress on development

One year after the inconclusive World Trade Organization (WTO) Ministerial in Hong Kong, negotiators have failed to make progress on agreeing trade reforms to promote development, and pressure on poor countries is building, said international agency Oxfam.

Despite stating their continued commitment to multilateral negotiations, the EU and US have not significantly improved their offers made in Hong Kong. Instead, both have shifted focus to an aggressive regional and bilateral agenda, increasing pressure on developing countries to open their markets, while zealously guarding their agricultural subsidy budgets and tariff protections.

Celine Charveriat, Head of Oxfam International's Make Trade Fair Campaign said: "Progress is elusive because neither of the major powers have shown the willingness to fundamentally change their offers. A development deal, so desperately needed, still seems a long way off."

Oxfam said that trade talks should restart again in earnest, but only if members agreed to re-focus on the original mandate, which was to prioritize reforms that promote development. Poor countries should not be rushed into a bad deal to meet artificial deadlines, such as the expiry of the US Trade Promotion Authority: "Negotiations need to be reoriented to deal with developing countries' priorities and respect their legitimate concerns. The worst result would be a deal pushed through to meet deadlines that entailed damaging sacrifices from poor countries," said Charveriat.

In recent months, the US has put pressure on a group of developing countries, known as the G33, which seeks the flexibility to use trade policy to promote food security and rural livelihoods. The US has focused on gaining access to India's market for four commodities – rice, corn, wheat and soybeans – all highly subsidised in the US, and important for poor farmers in India.

Oxfam said the US should reduce this pressure and signal its willingness to negotiate by agreeing to reform trade-distorting subsidies in the Farm Bill, due to be revised in 2007. Charveriat: "The 2002 Farm Bill has a been a major problem for the trade negotiations. The US Congress could help unblock trade talks by agreeing a pro-development reform of the Farm Bill next year."

Meanwhile, Oxfam said the EU also had responsibility to move: "Europe must also improve its offer at the WTO on agricultural market access, especially for products of interest to developing countries, and reduce its aggressive, anti-development demands in regional trade negotiations, particularly with the African Caribbean and Pacific (ACP) countries,” said Charveriat.

In the absence of significant progress towards a new WTO deal, rich countries should act immediately to help developing countries benefit more from trade by agreeing a substantial aid for trade package and offering full duty and quota free access for the poorest countries to all developed country markets.

Charveriat: "If Brazil can offer duty free access to the poorest countries, as it confirmed it would last week, then why can't the US and Japan? Poor countries must not be made to pay for the delays in this round, which are due entirely to rich country intransigence."

Oxfam affirmed that the WTO was still the best forum to negotiate trade reform but insisted that all members must respect the mandate and commit to a transparent and inclusive process.