GENEVA, 17 July 2004 — The World Trade Organization (WTO) yesterday proposed that its 147 member countries eliminate subsidies as it launched a new attempt to broker a compromise in deadlocked global trade talks by the end of the month.
The proposal was contained in a copy of the new draft text of an agreement outlining the way ahead for the troubled negotiations, which was obtained by AFP. “Members agree to commitments ensuring the parallel elimination of all forms of export subsidies... by a credible end date,” the text distributed to the WTO’s 147 member states said.
The “Doha Work Program” put together by chief negotiator Shotaro Oshima, who is also Japan’s ambassador at the WTO, marked the first time a compromise has been put forward since a ministerial meeting in Cancun, Mexico collapsed last September.
That opened up a rift between rich and poor countries principally over subsidies and trade barriers in agriculture, as developing countries and farm exporters stood firm in demanding the elimination of billions of dollars in subsidies paid to farmers in the European Union and the United States. “We urge members to approach this draft in a constructive spirit,” Oshima and WTO Director General Supachai Panitchpakdi said in a covering letter to trading nations.
They emphasized that member states will have a chance to revise the draft before a meeting of the WTO’s ruling General Council on July 27 and 28, which holds the key for progress on the Doha round of trade talks.
The text included farm export subsidies under a list of items “to be eliminated by the end date to be agreed”, a more wide-ranging and direct formulation than the one that had been under consideration at Cancun.
Ministers had agreed at a ministerial meeting in Doha, Qatar in 2001 to reduce, “with a view to phasing out, all forms of export subsidies” on agricultural produce as they set out to achieve the new round by the end of 2004. “Substantial and effective reductions” in support for cotton — which is mainly implemented in the United States — were included under the agriculture section. The proposal appeared to favor a key demand of African countries.
The new draft work program also proposed that the talks should cover the elimination of the “trade distorting element of export credits and export credit guarantees by reducing the repayment period” to 180 days.
Export credits are notably paid to farmers by the United States with a three-year repayment deadline, and their elimination has been demanded by the EU in return for the end of some European farm subsidies. Oshima’s proposal outlined a progressive scale for agricultural tariff cuts, with larger cuts on high tariffs.
But the world’s poorest countries would not be obliged to take part in a new regime of cuts, according to the text, effectively allowing them to protect their farmers.