Farm export subsidies 'should end by 2010'

A draft agreement under discussion by World Trade Organisation trade negotiators in Hong Kong today suggested eliminating all farm export subsidies by 2010.

With many other issues left unresolved or diluted, the draft of the WTO text also showed headway had been made on the issue of granting duty-free and quota-free access for goods from the world’s poorest countries.

With one day left to reach a consensus on a final agreement, the statement, obtained by journalists, also set no date for establishing a precise formula for cutting tariffs and subsidies on agricultural and industrial trade.

It also suggests no date for completion of negotiations on service industries.

In a victory for West African cotton growers, the draft calls for rich nations to end export subsidies for cotton in 2006. It also said that measures to reduce subsidies for cotton producers be reduced faster than in other areas of agriculture.

Overall, the draft text, which was being circulated among delegates and others attending the conference, showed modest progress has been made this week during global trade talks that have brought together delegates from 149 nations and territories.

But major gaps remain, in particular on a date by which members would agree to a precise method for reducing agricultural trade barriers, a key demand of poorer nations. A dispute over how much wealthy nations should cut their tariffs and farm subsidies has been a major obstacle during the meeting.

Export subsidies – or funds that governments pay producers to promote agricultural exports – have been a sensitive topic, with developing countries urging the EU to at least set a date by which it will end the payments.

EU trade chief Peter Mandelson has said he will not agree to a date because Brazil has made it clear that this will not mean developing countries making any concessions on cutting their barriers on industrial goods and service industries.

But Brazil’s trade minister Celso Amorim has disputed that account, saying there never was a bargain in place that developing nations would cut their barriers if the EU offered to set a date to end export subsidies.

EU officials would not comment on the draft today as they were still studying the details.

The draft text, which was compiled by WTO chief Pascal Lamy, also proposes several measures on farm trade apparently to mollify the EU, including restrictions on in-kind donations of food aid, which Brussels says distorts international trade flows.

It also suggests eliminating the trade-distorting practices of so-called state trading enterprises – centralised exporting bodies for some commodities used by countries including Canada and Australia. Critics say these enterprises give farmers in those countries an unfair advantage and are so powerful that they can influence international prices.

The 2010 date for the end of export subsidies will only be confirmed when arrangements for these other measures are completed, apparently leaving the EU with a possible get-out clause.

Non-governmental groups immediately criticised the draft text, saying it did little to help the world’s poor.

“This draft ministerial text is a disgrace and an insult to poor people all over the world,” said Aftab Alam Khan of the international development agency ActionAid. “It is now clear that negotiations are biased and favour the rich.”

The WTO is a consensus organisation, so all 149 members will have to agree if a final treaty is to be adopted.