EU blasted as culprit for holding up trade talks

It was the European Union versus the rest of the world as global trade talks remained deadlocked today, with the EU defending itself from a barrage of criticism that its refusal to further open its farming markets threatened to torpedo the entire World Trade Organisation meeting.

It was the European Union versus the rest of the world as global trade talks remained deadlocked today, with the EU defending itself from a barrage of criticism that its refusal to further open its farming markets threatened to torpedo the entire World Trade Organisation meeting.

Poor nations say that as a part of a global free-trade deal, the EU, the US and other rich nations must cut their farm subsidies and tariffs that block developing countries’ access to those lucrative markets.

Chile’s foreign minister, Ignacio Walker, blasted the EU’s farm subsidy programme, which critics say totals up to €92.1bn a year. Walker said that works out to about €1.67 a day for each cow.

“So many poor people wish they would be at least as well off as an EU cow,” Walker said.

But European nations say they have already offered generous cuts in agricultural programmes, including an average cut 46% on farm tariffs, and that developing countries, particularly Brazil, India and China, need to counter with offers to lower their trade barriers to services and manufactured goods.

“The EU has presented a complete agricultural package,” said Elena Espinosa, Spain’s agricultural minister.

“What did the others present? Nothing, nothing, nothing.”

In the area of beef, for example, the EU said its proposed tariff cuts would lift beef imports from a current level of 500,000 metric tonnes to a projected 1.3 million metric tonnes, a figure that equals the total amount of Australian beef exports.

The WTO meeting, mired in a stalemate over the farm trade issue even before it began, encountered further problems today when Honduras said it might reject an overall agreement produced at the WTO gathering unless the EU agrees to reform its banana import policies.

“We hope to try and find an agreeable solution before Sunday,” Honduras’ WTO Ambassador Dacio Castillo said.

“Otherwise it’s going to be difficult to accept whatever will be the outcome of this meeting.” The WTO bases its decision on consensus, and the agreement of each of its 149 members is required on any deal.

Technically, Honduras could single-handedly cause the meeting to collapse, but that is unlikely at this stage.

Now in its third day, the six-day Hong Kong meeting was meant to draw up a detailed outline for a global trade treaty, but due to the impasse over agriculture, ministers now say that goal is out of reach.

Delegates are already discussing the option of holding another gathering in April, with the hopes of achieving a final agreement by the end of 2006.

Negotiations between key ministers that went into the small hours today bore little fruit, but talks later in the day suggested some progress, delegates said.

“The dynamics are changing,” said an Indian trade official who asked not to be named due to the sensitive nature of the talks.

“We had a very good meeting in the morning. There is a desire to move forward,” said Keith Rockwell, the chief WTO spokesman.

EU Trade Commissioner Peter Mandelson, however, reiterated today that the EU would stick to its positions on agriculture. He said the EU is offering genuine improved access to its domestic market, and that negotiations remain stalled because other members are not being as forthcoming.

“We’ve had no offers, no matching offers,” he said.

Mandelson also indicated that negotiations are getting more serious, saying about 20 different topics relating to industrial and farm goods are now being discussed by ministers, but without giving further details.

US Agriculture Secretary Mike Johanns said today he was discouraged by the EU’s failure to match a US proposal to slash its farm tariffs and subsidies, but was determined to press ahead on the third day of the biannual meeting.

“I am concerned about time,” Johanns said. “We are still waiting for the EU.”

Johanns said he believes the US has been successful in persuading many of the WTO’s 149 members of the merits of the US proposal, which calls for wealthy countries to cut their farm tariffs by 55% to 90% over the next five years with a second stage of reductions then bringing the tariff levels down to zero.

The US proposal, unveiled in October, also offers to eliminate government export subsidies for US farm products by 2010 and to reduce by 60% the amount of trade-distorting domestic support the government provides US farmers over the next five years.

However, developing nations have criticised the US offer as cutting the amount governments are allowed to spend, rather than what they can actually pay in subsidies – meaning spending at current levels could continue.

On the banana issue, Honduras said the European Union is acting illegally by effectively ignoring several WTO rulings that have sided with Latin American countries who say the Brussels’ tariff regime seriously limits their ability to export the fruit.

Caribbean and African banana producers, however, benefit from the EU’s current system of tariffs and quotas, which favours them over large-scale growers in Latin American, who claim the system is unfair. The smaller producers say they risk getting squeezed out of the market.

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