World trade deal in jeopardy, nothing on table for poor countries

Published: 22 November 2005

The chances of a global trade deal that benefits poor countries are rapidly diminishing, said international agency Oxfam following downbeat meetings in London and Brussels yesterday.

The chances of a global trade deal that benefits poor countries are rapidly diminishing, said international agency Oxfam following downbeat meetings in London and Brussels yesterday.

With less than 40 days to go before World Trade Organization (WTO) Ministerial meeting in Hong Kong, Oxfam warned that rich countries must make better offers to help poor countries take advantage of opportunities to trade or the talks would be a failure. Ministers will carry on meeting in Geneva today and tomorrow.

The EU and US have announced cuts of 70 and 60 % respectively to farm subsidies that undermine developing world producers. However, in a report released today Oxfam shows that the EU would not have to make any cuts and could actually increase the worst trade-distorting subsidies by $13bn.

In the best case scenario, the US proposal would only lead to cuts of $4bn – 19% of total trade distorting subsidies, not the 60% advertised. This is thanks to flexibility in the way subsidies are reported at the WTO and because the offers were to cut the ceiling for payments, not the actual level of spending.

“This is undeniably complicated but the bottom line is that claims of big cuts in subsidies are seriously overstated. Under the current proposals, very little will change in real world and developing countries will continue to be harmed by unfair competition,” said Celine Charveriat, Head of Oxfam International’s Make Trade Fair Campaign.

“Ministers need to wake up to the fact that unless they revise offers on the table immediately, this year is going to be a failure in terms of getting trade reforms that help end poverty,” she added.

Oxfam also said that offers from rich countries to cut tariffs on agricultural imports must not come with unreasonable conditions or demands of full reciprocity. Developing countries must be given the right to protect vulnerable sectors – agricultural and industrial – otherwise poverty would increase.

Charveriat: “As things stand, not only will poor countries not benefit from these talks but they may well suffer. The EU and US are making massive and potentially devastating demands in exchange for minimal concessions. Both blocks need to re-think their market access offers to guarantee that they promote rather than undermine development.”

Oxfam’s report follows revelations that the majority of Common Agricultural Policy (CAP) payments in France go to large-scale farmers. EU foreign ministers met in Brussels on Monday but did not agree anything on CAP reform.

The Doha Development round was launched in Qatar in 2001 with the specific intention of reforming trade rules so that poor countries benefited. Four years on, development issues are being pushed aside by headline grabbing disputes between rich nations.

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