Global Policy Forum

By Stefania Bianchi

The European Union has welcomed a "significant breakthrough" in World Trade Organisation talks, after trade ministers breathed new life into the stalled Doha negotiations Wednesday by ending a technical dispute over tariff cuts on farm products. Ministers from 30 World Trade Organisation (WTO) members gave broad backing to the tariff structure proposed by the European Commission that would allow discussions on market access for agricultural products to be unblocked. "The European Commission welcomes today's significant breakthrough," the European Union (EU) executive said in a statement Wednesday.

The proposals allow tariffs to be converted into a percentage of price rather than a flat rate per tonne. The issue had been blocking the Doha Development Round (DDR) of global trade negotiations. The tariffs issue has divided wealthy food-importing nations such as the EU and Switzerland from Brazil and other countries hoping to export more farm products to developed countries. The issue needed to be resolved before talks could move on to a formula for tariff cuts. The current round of world trade talks aims to reach agreements in such critical areas as agricultural trade, trade in services and industrial tariffs.

The negotiations were launched in Doha in Qatar in 2001. The WTO had hoped to complete the talks by the end of 2004, but they are months behind schedule. Talks in the Mexican beach resort Cancun broke down in September 2003 mainly over the estimated 350 billion dollars (269 billion euros) a year rich countries spend on farm subsidies, and on the new issues the EU wants to raise. These include trade and competition policy, trade facilitation, and transparency in government procurement. The latest talks in Paris Tuesday and Wednesday (May 3-4), aimed at an agreement by 2006.

Peter Mandelson, EU commissioner for trade, said he was "very pleased" with the result, adding that the progress on agriculture would open the way for further progress on other issues. "The road is now clear for rapid and substantial progress of the DDA (Doha development agenda) across the board, including manufactured goods and services," he said in a statement Wednesday.

Mariann Fischer Boel, EU commissioner for agriculture, also hailed the agreement as the first step toward a comprehensive deal on farm goods trade, but stressed that there was still a long way to go before a final agreement. "I am delighted that our initiative was able to unblock what had become a very sensitive debate. It is proof of our good faith and willingness to look for imaginative solutions to move the negotiations forward. We're not finished yet but I think we've given an important push to the negotiations," she said. She also urged other WTO members to follow the EU's example of moving the talks forward. "This is not about market access alone. Domestic support and export subsidies must now be addressed, the EU having taken the lead. And let's not forget that the DDA is about more than just agriculture. We need movement from all sides on all issues," she said.

The United States, the EU, Australia, Brazil and India agreed to the deal, which was also accepted by a larger group of nations including Japan. The proposals are a midway compromise between the EU's demands and those of Brazil, which leads the G20, a group of developing WTO members that had pressed the EU for more opening of its market. Brazil, which had earlier accused Brussels of exploiting the standoff to press for more concessions from poorer countries, said it was satisfied with the agreement.

Now, the 148 WTO member countries will vote on whether they formally accept the compromise when they meet at the trade body's Geneva headquarters later in the year. Mandelson said he was confident the remaining WTO members would accept the proposals. "Although it still has to be formally confirmed in Geneva, our proposal has now been accepted by the countries who have the greatest stake in the agriculture negotiations," he said.

The international relief organisation Oxfam, which has been critical of what it calls "EU foot-dragging", also welcomed the outcome of the Paris talks. "This is great news if it enables us to move forward and begin talking about issues of real importance to developing countries and the millions of poor farmers that live in them. This technical issue of tariff conversion has been holding up progress on everything else," Phil Bloomer, head of Oxfam's Make Trade Fair campaign said Thursday (May 5). Bloomer urged WTO members to agree on agriculture reforms that would "genuinely contribute" to poverty reduction. "This should not be an excuse for rich countries to begin pushing for more in areas such as non-agricultural market access and services," he added. The current talks are intended to lay the foundations for agreement on an outline deal by July, ahead of a full-scale WTO summit in Hong Kong in December.

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