Oxfam Warns Trade Deal May Fail Poor Countries

By mborum

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US Newswire Boston Wire Circuit: International agency Oxfam today welcomed renewed momentum in world trade talks but warned that a deal on reforming trade rules could end up failing the poorest countries. In spite of new proposals from the EU, the US, and the G20, the positions of major players are still far apart, and the needs of poor countries are being largely ignored.

"The talks have moved forward a few inches, but the question is who will benefit?" said Celine Charveriat, Head of Oxfam International's Make Trade Fair Campaign. "Issues of vital importance to developing countries are still being ignored. These talks were meant to deliver for development. It's not good enough for the big players to strike a last minute deal that suits them, but leaves poor countries out in the cold".

The EU and US offered to cut their trade-distorting agricultural subsidies by 70 percent and 60 percent respectively; however, Oxfam warned that thanks to flexibility of reporting mechanisms at the WTO, neither trading bloc would have to cut overall level of farm spending by very much at all.

Furthermore, the other details of the proposals would not help developing countries and could even end up hurting them. For a deal to be acceptable for developing countries, Oxfam said the EU and US needed to demonstrate genuine reductions in agricultural spending and real improvements in market access for poor countries. They must guarantee developing countries the flexibility to decide their own trade policies, not force them to make harmful concessions.

Charveriat: "Poor countries need to be reassured that they will be able to use trade policies to promote development. Pressure to get a deal by December must not mean that they are forced to compromise or accept terms that will damage their economies and people. Yes, we want a deal at the WTO – but not at any cost."

Oxfam said the EU and US were still stalling on areas of vital importance for development. The EU is insisting on designating so-called 'sensitive products' as immune from dramatic tariffs cuts, which would significantly dilute the benefits of market opening for poor countries. At the same time they are asking for too much from developing countries in the areas of non-agricultural market access and services.

The US is proposing an aggressive formula to open up international markets that could destroy fledgling farm sectors in developing countries. Meanwhile, it seems reluctant to commit to make significant cuts in its own farm subsidies, especially on cotton.

"There has been absolutely no mention of cotton, despite the fact that this has been identified by a number of African countries as the most important issue for them. Subsidies to American cotton producers have gone up again this year,  and the US Congress is showing little willingness to implement the radical reforms needed and called for by the WTO. Meanwhile, millions of African farmers are struggling to survive in the face of lower prices and failing crops," said Charveriat.

Talks continue next week in Geneva, with the WTO General Council meeting on October 19-20.

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