World trade talks in peril

WTO talks were in peril today with the EU trade chief saying they were “going backwards", and cotton, banana and sugar growing nations threatening to reject any trade deal that failed to protect their farmers.

“It is hard to see where progress can be achieved in Hong Kong if the talks continue in this direction,” EU Trade Commissioner Peter Mandelson said. “The level of ambition, if anything, is going backwards.”

The Group of 77 African, Caribbean and Pacific countries, many of whose populations are subsistence farmers relying on crops such as sugar, cotton and bananas, demanded safeguards for commodity growers and continued preferential access to European markets.

Their objections were the latest blow to the WTO talks that have made barely any progress toward agreeing how much to cut trade barriers in any of the three main areas: agriculture, manufactured goods and services.

Since the 149-nation WTO operates by consensus, the controversy could undermine the outcome of the six-day gathering that wraps up on Sunday.

“We will not be a party to any consensus that that does not recognise our right to grow bananas,” said Charles Savarin, trade minister of Dominica. “We must preserve our traditional access to the EU markets.”

The European Union’s system of tariffs and quotas favours Caribbean and African banana producers over large-scale growers in Latin America, preferential treatment the WTO has ruled violates world trade rules.

Caribbean and African countries say ending the preferences could destroy their domestic banana industries, which are mostly small-scale family farms. But Honduras has threatened to reject any global trade deal that preserved the preferences.

With just two days left in the meeting, WTO chief Pascal Lamy began to circulate proposals for a final agreement on which delegates could reach some sort of compromise.

In one key issue, a revision of the section on agricultural trade suggested 2010 as a date for elimination of all export subsidies – government funds paid to domestic producers to promote exports – according to documents obtained by journalists Friday.

The new draft has 2010 in brackets, meaning it still has to be accepted by all WTO members. It also suggests including a proviso allowing members to agree a number of years after any agreement to implement the measure.

Warning that the meeting risks failure, a broad group of nations including India, Brazil and Australia pressed the US and EU to be more flexible in opening up their agricultural markets.

“There are many hundreds of millions of people across the world living in poverty-stricken countries who are looking to us to improve their opportunities by negotiating better market access,” said Australian trade minister Mark Vaile.

A senior American trade envoy directly involved in this week’s closed-door discussions, meanwhile, said talks were “being held hostage to a failure of our developed country partners to come forward with ambitious offers to agricultural market access” – a swipe at the EU’s refusal to match a US offer to cut duties used to protect farmers from foreign competition.

Mandelson, lashed out at that criticism, saying the EU would not alter its stance, which includes offering an average cut of 46% in farm tariffs.

“We are going to stick to our position,” he said, adding that developing nations seemed to expect the EU to settle for fewer opportunities in industrial trade while agreeing to make more concessions in agriculture.

“In other words, pay more to get less in return,” he said.