WTO AS POLISH PARLIAMENT:

EU blamed for looming WTO failure (Lucia Kubosova, 13.12.2005, EU Observer)

With the World Trade Organisation (WTO) summit starting in Hong Kong on Tuesday (13 December), the European Union is facing heavy criticism for its offer on agriculture, which some claim has spoiled the chance of a major breakthrough at the talks.
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Arriving to Hong Kong on Monday, US representative Rob Portman argued that the EU - among others - had not matched the "bold proposal" on eliminating farm subsidies and import tariffs made by Washington.

"The key to development is market access. Agriculture access is the top challenge and we think that we need to make more progress here", Mr Portman said, according to AFP.

Brazil, the main spokesman for the developing countries, also blamed the EU directly, indicating that the Doha talks would not be completed without a better offer from Brussels.

Why seek unanimity?

MORE:
Free trade for a better future: Open markets for agriculture could help lift the world's poor out of poverty. (PAUL WOLFOWITZ, December 13, 2005, LA Times)

Rich countries — primarily the U.S., Japan and the members of the European Union — spend $280 billion annually on agricultural support. That's $5 billion a week to protect their often-rich farmers from competition. Ultimately, it is the taxpayers and consumers in these countries who shoulder the costs of these support programs. Economists estimate that consumers pay $168 billion a year because of tariffs, and taxpayers pay $112 billion a year for direct subsidies.

But the real damage is done to farmers in poor countries, because high tariffs keep them out of key markets, and tariffs and subsidies together drive down the world price of their exports. Without the income that trade could provide, it is their children who go hungry and who are deprived of clean water, medicines and other basic necessities of life.

Tariffs also hurt poor countries by blocking them from moving up the production chain. Even though 90% of the world's cocoa beans are grown in developing countries, they produce only 4% of its chocolate. One reason is that tariffs often escalate with the degree of processing — in the EU, producers of raw cocoa pay a tariff of 0.5% of the value of the beans, semi-processed cocoa pays about 10% of its value and chocolate even more.

If the rich countries would agree to level the playing field, everyone would see enormous gains. The World Bank estimates that full liberalization of trade in goods alone could generate $300 billion per year for the global economy. Developing countries would gain $86 billion of this share. And these numbers can grow as producers in poor countries take advantage of new markets.

Posted by Orrin Judd at December 13, 2005 7:28 AM