WTO makes last-ditch trade proposal

Almost a year after the collapse of global talks, World Trade Organisation chiefs have made a last-ditch proposal to complete the unfinished work.

But they still have to persuade the 147 member governments to agree on many issues, especially the opening-up of international trade in farm goods.

“Members are well aware that considerable differences of view persist in a number of important areas,” Japanese ambassador Notaro Oshima, who chairs the 147-nation WTO’s ruling General Council, and WTO Director-General Supachai Panitchpakdi said in a foreword to the confidential 15-page proposal.

The proposed “framework” for a legally-binding treaty to cut import duties and regulate government subsidies was originally due to be completed at a meeting of ministers in Cancun, Mexico, last September. But differences were so wide between rich and poor nations and between agricultural importers and exporters that they realised their was no chance of consensus.

Many of the trade ministers who left Cancun defeated last year plan to travel to Geneva to oversee the completion of the deal at a meeting starting on July 27 - but only if they believe they will be successful.

If this month’s efforts fail, the WTO talks will probably remain paralysed for many months because negotiations at the necessary political level will be impossible during the US presidential elections and the changeover of power at the European Commission.

In the key issue of agriculture, the document sets out a system that would ensure that high import tariffs are cut by a larger percentage than low ones – a key demand of many agricultural exporters.

However it also leaves room for nations to make smaller cuts on products they consider “sensitive” – often products that are important in their domestic farming industry.

The document is short of detail, saying simply that the exact formula to be used “remains under negotiation”. Governments have failed to agree on that, despite months of negotiation.

The proposal says all agricultural export subsidies will be eliminated by a date “to be agreed” – a concession made by the European Union, which had originally refused to accept total elimination of the payments. At the same time, the United States, Canada and others also must get rid of their own programmes of support for agricultural exporters, it says.

The document rejects the demand of the world’s poorest countries for a special negotiation just to settle issues surrounding the production of cotton, saying it should be considered as part of the agriculture negotiations.

Cotton producers, especially in Africa, say the huge subsidies paid by the United States, the European Union and China to their cotton producers have depressed the market price and forced small farmers in poor nations out of business.

But some of the other problems that scuttled Cancun appear to have been solved. The European Union, Japan and their allies have dropped demands for negotiations on investment and competition rules, as well as improved transparency in government tendering procedures.

In return, poorer nations said earlier this week they were “disposed to consider favourably” proposals to start talks on trade facilitation – improving and harmonising border and customs procedures to make easier the international transport of goods. The document proposes a start to negotiations in that area immediately.

Richard Mills, spokesman for the US Trade Representative, said the document was being carefully studied in Washington.

Once negotiators have a framework for their treaty, they will set about filling in the gaps by agreeing on the exact size of cuts in tariffs and subsidies and details of other agreements. Some observers believe this will be a quicker and less controversial exercise, although it is virtually certain to take at least a year.