Lost chance

Gridlock over farm trade issues continues

 
Last Updated: Saturday 04 July 2015

the recent discussions on world trade-related issues in Tokyo progressed along expected lines: they came a cropper. Ministers from Australia, Canada, Brazil, India, Kenya, South Korea, the us and the uk could not reconcile their differences over contentious agricultural trade issues during the three-day informal talks in February.

The immediate fallout is that the March 2003 deadline to fix targets for reducing tariffs and subsidies has been missed. The time-frame was laid down during the World Trade Organisation (wto) meeting at Doha in 2001.

Even before the mini-ministerial got underway in the Japanese capital, it was clear that developing countries were more apprehensive than ever about the intentions of industrialised nations. "Failure to make progress (on negotiations regarding poor nations' access to essential medicines) has deepened suspicions among developing countries that the development part of the Doha agenda may be no more than a slogan," observed wto director-general Supachai Panitchpakdi before the meeting began.

At the heart of the controversy was a proposal circulated by Stuart Harbinson, chairperson of the wto committee on agriculture, two days prior to the meet. Harbinson called for phasing out at least 50 per cent of export subsidies by industrialised countries within five years, and the rest to be reduced to zero in nine years. Developing countries would get 10 years and 12 years, respectively, for taking the same steps. The proposal also featured an average 40-60 per cent reduction in all farm tariffs in industrialised countries in five years. For developing countries, the corresponding cut proposed was 27-40 per cent in 10 years.

The proposal did not find favour with either importers or exporters. "To be fair, these reforms must go much further towards harmonisation by narrowing the vast disparities among countries in subsidies and tariffs," said us trade representative spokesperson Richard Mills. Japan felt that the proposal would affect its rice market seriously. The European Union (eu), too, was neither willing to reduce its subsidy nor open up its agriculture markets.

Developing countries like India, Kenya and Nigeria welcomed the proposal saying that it gave poorer countries flexibility to address their developmental needs. However, led by India, they pressed for a removal of tariff barriers put up by industrialised countries as a precondition. "They will have to bring down their subsidies so that we can calibrate our own tariffs. Any reduction in tariffs on farm products will have a direct impact on our own farmers," said India's Union minister for commerce and industry, Arun Jaitley.

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