Agricultural deal eludes WTO

Repercussions for new international trade deal

Published: Thursday 15 September 2005

the World Trade Organisation (wto) missed an August 1, 2005, deadline to reach a first draft approximation of a new international trade deal that would conclude wto's Doha round. wto director-general Supachai Panitchpakdi had said on July 8, 2005, that the approximation was the last remaining "slender chance of averting a crisis" in trade talks, which began in 2001. Without this, very little may be achieved at the wto ministerial conference in Honk Kong in December 2005.

The delay is partly due to weeks of stalled negotiations on conversion of developed country tariffs, expressed in quantity terms like dollars per tonne, into a tariff based on the value of items. Negotiators were momentarily upbeat about the talks after this issue was resolved, and a general formula to reduce agricultural tariffs was agreed upon. However, even by the deadline, there was no agreement on the different tariff reduction categories and the different reduction rates for each category.

"The agricultural negotiations are stalled. There is no way to conceal that reality," said Tim Groser, chairperson of the agricultural negotiations. The wto still has no agreement on tariff reduction, nor any schedule or timeline to reduce agricultural subsidies for developed countries or a deadline to end export subsidies. Cotton subsidies in developed countries, blamed by Least Developed African countries for holding back their economies, also remain in place, despite an agreement almost a year ago to address the issue "expeditiously". And without an agreement on the key and complex issue of agriculture, countries are unwilling to make commitments in other realms of the negotiations. For non-agricultural goods, there is still no agreement on a formula for reduction of tariffs. Also, countries have made no progress in talks on trade in services sector.

G K Pillai, additional secretary, Union ministry of commerce and industry, views these technical hurdles as a negotiating strategy of developed countries: "They are playing a game of brinkmanship -- they want to delay negotiations to the last minute and push in their agenda at the end." The wto went on a break after the expiry of the August deadline and will resume work in September. This leaves just three months before the Hong Kong conference. Though countries are keen to not repeat the failure of the 2003 Cancun ministerial, without a first approximation, negotiators might not have a common starting position for their talks.

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