Saturday, April 22, 2006

International Development: Concern over deadline for tariff cuts in southern Africa

Photo: Cheaper goods from the developed world has affected livelihoods in the region

There is growing concern that World Trade Organisation (WTO) member countries are unlikely to meet the 30 April deadline for broad agreement on agricultural and trade tariff cuts.

"We are not very optimistic, but we still have a week, so it would be premature to say that the deadline will be missed," said Xavier Carim, South Africa's chief negotiator at the WTO in Geneva. He said the cuts were "critical" in enabling countries not only in Southern Africa, but the entire developing world to compete on an equal footing in the global economy.

After a WTO ministerial meeting in Hong Kong last December made little progress, member countries set 30 April 2006 as the deadline for reaching agreement on how to reduce farm subsidies and cut tariffs on manufactured goods. The meeting followed the Doha round of WTO negotiations, launched in 2001 to lower trade barriers so as to boost the global economy and lift millions out of poverty in the developing world.

The details of the overall broad framework, drawn up in Hong Kong, need to be finalised by the end of 2006, before US President George Bush's "fast-track" power to submit a trade deal to the US Congress expires in mid-2007. The power eliminates the possibility of Congress making any amendments to the deal.

According to a WTO official, the heads of all delegations are to meet in Geneva on Monday to decide on a way forward.

Carim said the main stumbling block was the negotiations on agriculture. He pointed out that while the US has suggested "ambitious" cuts related to agricultural tariffs on imports, the European Union's proposed reductions had been "inadequate" and the G-20 group of developing nations had met the required cuts midway. A reduction in import tariffs by developed nations would benefit developing countries wanting to sell their products at competitive prices in European or US markets.

However, the Americans have not been forthcoming on cutting subsidies to their local farmers, making agricultural produce from developing countries seem a lot more expensive in US markets, according to Carim.

"Rich, industrialised countries spend US $1 billion each day to support their domestic agricultural system. African countries are not being given enough space to protect their vulnerable farmers or to promote fledging industry," said Mouhamet Lamine, trade campaign manager in the West Africa office of the development agency, Oxfam International. "What rich countries are offering right now is not nearly good enough - it is better to have no deal before 30 April than a bad deal."

Lamine commented that although the EU and the US had agreed to eliminate agricultural export subsidies by 2013, they have not adequately addressed issues such as "dumping" cheap foods, including meat and poultry, in African markets. "Livelihoods of farmers are being destroyed across Africa. While cotton production supports 25,000 farmers in the US, it affects at least 15 million people in West Africa."

A round of talks between the African Union and the WTO in Kenya last week also did not make much progress, he added.

Development NGOs like Oxfam and ActionAid have insisted that the onus to reduce tariffs is on the developed world, as the Doha talks centered around uplifting poorer countries.

Reproduced with the kind permission of IRIN
IRIN 2006
Photo: Copyright
Disclaimer: This article does not necessarily reflect the views of the United Nations or its agencies