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Farming Subsidies Blasted

Ministers from the 17 countries of the Cairns Group who met here this week  ommitted to doing whatever necessary to get stalled World Trade Organization (WTO) negotiations back on track by mid-year.

It was a very productive meeting, said Mark Vaile, Australian Minister for Trade, during a press conference Wednesday marking the conclusion of the three-day meeting. Some of our colleagues have called it one of the most productive meetings the Cairns Group has had.

Following the meeting, the group issued a strong message to the United States, European Union and Japan the world s largest subsidizers of agricultural products requesting they take steps to further open their markets to foreign agricultural products, eliminate any and all agricultural export subsidies, and take steps to substantially reduce domestic farm supports.

THECairns Group is composed of 17 agriculture-exporting countries responsible for roughly 30% of the world s agricultural trade. Group members include Argentina, Austratralia, Bolivia, Brazil, Canada, Chile, Colombia Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Phillippines, South Africa, Thailand and Uruguay.

Since 1986, the group has been dedicated to promoting the liberalization of agricultural products under the multilateral trading system.

In recent years, the group has expanded its efforts to lobbying for the reduction of domestic supports and the elimination of export subsidies, which, it argues, distort the international price of agricultural products and hurt farmers and consumers (TT, Oct. 17, 2003; Jan 30).

DURING the meeting, the group was addressed by top trade officials from different parts of the world, including Supachai Panitchadki, director general of the WTO.

Born in Bangkok, Thailand, in 1946, Supachai has a Ph.D. in Economic Planning and Development from the Netherlands School of Economics. Since becoming director general of the WTO in September 2002, Supachai has pushed for greater liberalization of trade, particularly in agriculture, where he has argued strongly for the elimination of price-distorting subsidies and supports.

Supachai began his visit to Costa Rica Monday meeting with top government officials. He expressed optimism over the future of the current round of WTO negotiations the Doha Development Round which has been stalled since the collapse of the Cancún, Mexico, ministerial meeting last September following disagreements over issues including agricultural subsidies (TT Sept. 12, 19, 2003).

THIS meeting comes at a crucial time, he explained. We are trying to put the negotiating round back on track and hope the Cairns Group meeting will send the right signals to motivate countries to get into real negotiations.

Supachai expressed concern over the growing number of bilateral and regional preferential trade agreements being signed by WTO members.

He said there are 270 trade agreements currently in effect and 60 more in the works, including the Central America Free-Trade Agreement (CAFTA) with the United States.

The main disadvantage of these agreements is they lack clear agreements on the reduction of agricultural subsidies, he said. Industrialized countries will only agree to reduce subsidies within the WTO.

U.S. Trade Representative Robert Zoellick made a brief visit to the country on Tuesday to address the Cairns ministers as part of a two-week worldwide tour aimed at securing international support for the reactivation of the Doha Round.

He presented a plan for the elimination of export subsidies and reduction of domestic supports. However, he conditioned U.S. commitment to these measures on the willingness of Europe and Japan to implement them.

If all parties agree, the United States would eliminate the $15 million it spends each year on export subsidies and an additional $250 million in export credits. The agreement would be more difficult for the Europeans, who spend between $2 billion and $3 billion each year on export subsides, according to Zoellick.

Once an agreement on export subsidies is reached, the countries can begin negotiating the gradual reduction of domestic supports, he said.

THE Group applauded Zoellick s willingness to negotiate and vowed to continue work on the agriculture agenda.

The Cairns Group will continue to fight for an integral reform of multilateral trade policy, Costa Rican Foreign Trade Minister Alberto Trejos said.

Vaile, director of the Cairns Group, agreed.

Our responsibility is on behalf of the world s efficient agricultural farmers and producers, particularly those in developing countries, he said on Tuesday. Farmers need fair access to rich markets. It s grossly unfair that they be excluded.

To improve agricultural market access, the group proposes proportional tariff reductions countries with the highest tariffs would be required to make the largest reductions.

AN ambitious stance was taken on export subsidies. Ministers demanded WTO members define a basic framework for the gradual elimination of all export subsidies by mid-year.

By the end of the year, countries should agree on the deadlines for each specific reduction and commit in writing to substantial reductions in domestic supports by the end of the year.

To gain additional support for its proposals, the group will reach out to other multi-country coalitions within the WTO, including the G-20 group of developing nations, with which it shares some members.

Costa Rica and Guatemala left the group in October as a result of U.S. pressure (TT, Oct. 17, 2003). Argentina and Brazil remain members.

The Cairns Group is fully committed to achieving substantial progress in the negotiations in 2004, said the statement issued by the group this week.

THE group is convinced an agreement in agriculture will revive the Doha Round and lead to a reduction in poverty.

There s a broader issue behind these discussions, said Roberto Rodrigues, Brazilian Agricultural Minister. There are two problems in the world caused by the globalized economy social exclusion and concentration of wealth.

“These problems threaten democracy and world peace,” he said. “The fastest way to eliminate these threats is expanding world trade so rich countries will be able to buy the products from poor ones. Market access for all is an instrument to combat the socio-economic gap, an instrument for the defense of democracy and peace.”



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