Ministers agree world trade deal

World Trade Organisation members have approved a plan to end export subsidies on farm products and cut import duties across the world, a key step toward a comprehensive global accord under discussion since 2001, trade officials said.

The deal, approved by a consensus of the 147-nation body, opened the way for full negotiations to start in September.

“Developed countries have recognised that agricultural trade with a heavy subsidy component is not free trade,” said Indian trade minister Kamal Nath.

But Nath said that the United States, European Union and other developed countries would also benefit by removing heavy agricultural subsidies from their budgets.

“It is incredibly important for Canada and for the world,” Canadian trade minister Jim Peterson said. “We have a historic opportunity to get rid of agricultural subsidies and open up the world, particularly the developing world.”

“It is a good deal for everybody,” said Brazilian foreign minister Celso Amorim. “It’s a good deal for trade liberalisation. It is also a good deal for social justice … with the elimination of subsidies.”

The approval followed a breakthrough when 20 key countries approved a document setting out the framework for a legally-binding treaty, WTO spokesman Keith Rockwell said.

The document commits nations to lowering import duties and reducing government support in the three major areas of international trade – industrial goods, agriculture and service industries such as telecommunications and banking.

The deal will set back in motion the long-stalled ”round” of trade liberalisation treaty talks that were launched by WTO members in Doha, Qatar, in 2001, but delayed by the collapse of the body’s ministerial meeting in Cancun, Mexico, last year.

In agriculture, the document agrees to eliminate export subsidies and other forms of government support for exports, while making big cuts to other subsidies. It includes a “down payment” that would see an immediate 20% cut in the maximum permitted payments by rich nations.

The highest agricultural import tariffs will face the biggest cuts, although no figures have yet been agreed. Nations will have the right to keep higher tariffs on some of the products they consider most important.

The biggest sticking point apparently was how to handle politically-sensitive farm products on which a group of 10 countries, including Japan and Switzerland, want to maintain higher import tariffs to protect their domestic producers.

“What we regret is that some of the G10 concerns haven’t fully been taken into account,” said Swiss President and Economics Minister Joseph Deiss, who heads the G10. “The liberalisation process will put additional economic pressure on our farmers.”

But, Deiss added: “This will be a key step for the opening of the world economy and this will be of benefit for all countries.”

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