Countdown on to world trade deal
Negotiators were today poring over a last-ditch proposal for a deal on cutting tariffs and subsidies in a trade agreement to give a boost to the global economy.
The proposal, produced early today after an all-night session by mediators, seeks to satisfy the concerns of rich and poor nations in the difficult areas of agriculture and trade in manufactured goods.
Trade ministers and diplomats at the 147-nation World Trade Organisation in Geneva now have only hours to consider and accept or reject the proposal if they are to avoid being left years behind in their work on a new trade liberalisation round.
“We are optimistic that the text will provide us with the basis for a deal in the next 24 hours,” said Australian Ambassador David Spencer.
However, other delegations warned there could be further problems ahead. Brazil’s WTO ambassador, Luis Felipe de Seixas Correa, said the text “still needs major revision and we still need a lot negotiations for the text to be accepted”.
The confidential document, obtained by The Associated Press, makes a number of major changes from a two-week-old proposal that met with widespread disapproval.
On the key issue of agriculture, it incorporates an offer by a group of five powerful producers – the United States, the European Union, Australia, Brazil and India – to make immediate cuts to trade-distorting domestic farm subsidies.
Although most of the treaty would be implemented over a number of years, the proposal calls for an immediate 20% reduction in each country’s top limit in the first year after it is agreed.
The document also, for the first time, proposes a cap on subsidies that are aimed primarily at limiting production, amid concerns by some nations that these have been abused in major industrialised countries.
The EU has already agreed to eliminate all its agricultural export subsidies provided other rich countries do the same. To ensure this, the document calls for the elimination of all state-run export credit and insurance programmes with repayment terms of more than 180 days, and work to ensure that shorter programmes are run on commercial terms.
To meet concerns of African nations who claim their cotton producers are being forced out of business because of heavy subsidies in rich nations, the text promises that the issue will be considered “ambitiously, expeditiously and specifically.”
Delegations are likely to continue negotiating well into Saturday morning.
Trade ministers from the 25 EU countries also gathered Friday morning to discuss the text. France in particular has expressed concerns that the deal would mean European farmers would have to give up more of their government support than their US rivals.
The deal was originally supposed to be approved at the WTO’s collapsed ministerial meeting in Mexico last September.
Failure to reach agreement this week will delay the trade round by months if not years, as the US presidential elections and political changes in other countries will prevent the WTO taking any major political decisions until at least next spring.
WTO members agree in principle that cutting barriers to international trade, such as import taxes and government subsidies, is good for the world economy.
But uncontrolled trade liberalisation could have devastating consequences for individual countries, and diplomats are fighting hard to protect national interests.
