Fair Trade Deal Needed Now More Than Ever

Washington, DC -- Trade reform that puts poor countries first is desperately needed in the face of rising food and fuel prices and global economic insecurity. But current offers at the World Trade Organization (WTO) would make the situation worse and undermine development, warned international agency Oxfam America today at the beginning of a week of talks in Geneva.

"Given the context of rising food and fuel prices, a fair trade deal as promised could make a massive difference to people living in poverty around the world," said Raymond C. Offenheiser, president of Oxfam America. "But what's currently on the table falls far short of what is needed and continues to prioritize the interests of rich countries, as locking in big tariff cuts without adequate safeguards in place will only expose poor farmers to more shocks."

As trade ministers from 35 countries gather at the World Trade Organization in another attempt to forge a trade deal, Oxfam is calling for a clear and transparent process that involves all members and gives formal opportunities to respond to proposals.

If current offers are accepted, the US may not have to cut a penny from current spending on agriculture, and the EU will only have to cut around $2.6bn, from a total of $30bn, according to Oxfam. The proposals on non-agricultural trade will lock poor countries into low-value economies by preventing them from building up infant industries through strategic trade policy.

"High prices certainly present the opportunity to reform, but with current proposals, this opportunity looks set to be squandered," said Offenheiser. "A trade deal that only accommodates vested interests could be destructive for development and efforts to reduce poverty."

The recently passed US Farm Bill has landed like an unwelcome guest at the negotiating table. In a new analysis released today, Oxfam outlines how the Farm Bill undermines progress in the Doha Round. Despite the fact that US farmers are enjoying very high prices and record farm income -- an average of $89,000 per farm -- the US Congress actually expanded government farm subsidies in the 2008 Farm Bill and reinstated cotton subsidies previously ruled illegal at the WTO.

"Not only do provisions in the 2008 Farm Bill go against previously agreed to obligations at the WTO, but they maintain -- and in some cases, increase -- precisely the subsidies and market protections that developing countries entered the Doha Round to stop," said Offenheiser.

Europe has also not done enough to ensure a pro-poor deal. The EU continues to insist on exemptions for its sugar, beef and dairy farmers, while simultaneously denying poor countries the space to safeguard their own farmers' livelihoods. In recent weeks they have proposed resurrecting the controversial 'peace clause' which would protect them from challenge at the WTO.

"A fair trade deal would mean significant reform of trade distorting subsidies in rich countries coupled with flexibilities for poor countries to promote food security, livelihoods and rural development," said Offenheiser. "But what we're looking at now would only entrench existing advantages for rich countries and vulnerabilities for poor countries."