Talks to boost chances for the conclusion of a global trade pact in 2006 turned to the thorny issue of agriculture in Ukunda, Kenya, on Friday with a landmark World Trade Organisation (WTO) ruling against United States cotton subsidies weighing heavily in discussions.
With Thursday’s WTO decision in favour of Brazil making an already bitter north-south divide over farm subsidies even more pronounced, ministers and senior officials from 33 nations met for a second and final day at this Kenyan resort.
”We see it as an important victory for developing countries generally,” said Brazilian Foreign Minister Celso Amorim. ”Agricultural subsidies are the most harmful single piece [of commerce] that has to be reformed.”
The impact of the WTO ruling — which compels the US to dismantle hundreds of millions of dollars in subsidies paid to US cotton farmers — was evident in the talks.
”I think its very important,” Amorim told reporters. ”Now we have a ruling that makes it very clear that the way these [payments] were being used is illegal.”
An aide to one trade official participating in the WTO ”mini ministerial” said of the landmark ruling: ”People talk about the 800-pound gorilla in the room; well, this is it.”
But European Union trade chief Peter Mandelson differed with suggestions that the cotton ruling would have ramifications on broader discussions.
”Nobody has drawn those wider implications,” he told reporters during a break in the talks.
In Washington, a spokesperson for the US Trade Representative’s (USTR) office said the US is studying the ruling, which upheld a Brazilian complaint that the US subsidies artificially drove down world cotton prices and distorted competition for its producers.
Brazil hailed the decision and called for speedy US compliance, as did West African cotton producers, notably Benin Chad, Mali and Senegal, which had supported the original complaint and an initial WTO ruling against the US in 2004.
But prospects for Washington’s acceptance of the ruling remained unclear, particularly in the context of the talks in Kenya, which opened on Thursday under a cloud of north-south recriminations over farm subsidies.
The USTR spokesperson suggested the possibility of resolving the dispute through negotiation, possibly in conjunction with multilateral talks on rewriting the rules on global farm trade.
But at the Indian Ocean beachfront lodge of Ukunda, there were few signs that either north or south is willing to budge on positions, mainly on agricultural subsidies and trade preferences, that derailed the so-called ”Doha round” of negotiations in 2003 in Cancun, Mexico.
”We don’t see much movement,” said an official from one of the developing African, Caribbean and Pacific nations that have been clamouring for an end to such subsidies from rich countries.
At the same time, the developed world is insisting that poor nations ease tariffs and other trade restrictions to open their markets to foreign competition, most notably in the non-agricultural goods and services sectors.
”It’s important to see progress across the board,” Mandelson said, adding that numerous countries, including Brazil, Bangladesh, India, Japan and Senegal, made ”excellent contributions” in their statements on services.
They revealed ”a sense of urgency, realism and commitment” to reaching a global trade deal by the 2006 deadline, he said.
Although the Doha round of trade talks got back on track in July 2004 — in part because of a EU pledge to consider ending farm export subsidies — lingering tensions were evident even outside the meeting hall.
More than 40 Kenyan anti-globalisation demonstrators arrested on Thursday while trying to march on the conference site to protest farm subsidies were charged with participating in an ”illegal procession” and could face up to three years in prison, court officials said.
And, earlier in the week, poor countries demanded the agricultural issue take full precedence at the informal talks, warning that a failure to do so could lead to a repeat of Cancun in Hong Kong in December.
Officials acknowledged that a formal agreement is unlikely to emerge from the Kenya meeting but said they hope for new commitments on reducing or eliminating agricultural export subsidies, market access and domestic price supports.
Such pledges will be key to meeting a July target date to prepare an ”endgame document” — an outline of the final accord — for ministers from all 148 WTO members to endorse at a meeting in Hong Kong in December. — Sapa-AFP