February 4, 2003
Major powers are preventing commodity producers in poor states from breaking into the worlds richest markets by levying high tariffs on processed or semi-processed food, the UNCTAD agency said on Monday, reports Reuters. At the same time, the international development organization Oxfam said regulation must be reintroduced into global commodity trading with market intervention to manage supply if developing country poverty were to be tackled seriously.
"Commodities, particularly agricultural produce, face very tough market access conditions (in rich countries)," said a report from UNCTAD, the UNs trade and development agency. Tariff structures in the EU, Japan and the US "show a bias against products exported by developing countries," it declared.
Although its strictures won wide support from poorer states, it was criticized by US and European delegates. UNCTAD said steep tariff escalation-much higher duties on semi-processed or processed produce than for raw materials-stopped poorer countries exploiting their comparative advantage of cheaper labor and lower output costs.
The report said this escalation, the topic of frequent complaint from developing countries in the WTO, effectively discouraged poor countries from diversifying their out and moving up the value scale. Cotton growers in West Africa produced a high-quality crop and were among the worlds lowest-cost producers. "Nevertheless, competing on world markets with subsidized cotton from developed countries is difficult," UNCTAD declared.
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