Rich Countries Must Not Pursue Business as Usual in Trade Talks

By Oxfam

Rich countries must change their attitude to world trade negotiations and show leadership to deliver reforms that lift people out of poverty, said international agency Oxfam today on the eve of a World Trade Organisation (WTO) meeting at the World Economic Forum in Davos.

Ministers will reunite tomorrow for the first time this year, following an inconclusive meeting in Hong Kong in December. Oxfam warned that the EU and US must stop making excuses for not reforming agricultural trade rules and end their unreasonable demands for developing countries to open industry and services markets.

Jeremy Hobbs, Director of Oxfam International said: "The US and EU offers on agriculture won't stop dumping. They have turned this trade round on its head: from one that was meant to reform trade rules for the benefit of poor countries, to one which is about aggressive corporate gain in industrial products and services and indefensible northern protectionism in agriculture."

"The only people who think Europe has done enough are the Europeans. The EU needs to go further with its agricultural reform offer, and immediately stop making such unreasonable demands on developing countries in other areas. Then the spotlight will shift back to the US, which must cut its cotton subsides, implement full duty and quota free market access for poor countries, and keep its promises on agriculture, whatever Europe does."

The WTO Ministerial in Hong Kong was meant to agree a blueprint for trade reforms but concluded with much still to be done. There is likely to be another meeting in April and one in July to finish off the negotiations by 2007. Oxfam said that these meetings and the negotiating process in between them must be open and transparent, allowing for full participation of all WTO members and appropriate involvement of civil society.

The trend for 'green rooms', 'mini-ministerials', and bilateral meetings is dangerous because it excludes key countries and exposes others to unfair pressure. The short timeline for an agreement must not be used as an excuse to push a bad deal.

Hobbs: "The most important thing is whether this deal will deliver reforms that help developing countries. The demands of expansionist businesses on the one hand and protectionist northern agriculturalists on the other, must not be allowed to skew the outcome in the final months. No deal should be signed unless it is one that helps poor countries, not hurts them.

"All members must make strenuous efforts to ensure that agreements on Non-Agricultural Market Access and Services do not do irreversible harm to developing country economies and cancel out any gain that could be offered by agricultural reform."

Specifically Oxfam wants to see:

  • Deeper cuts in EU and US spending on agriculture; tariff reduction offers (especially from the EU) that translate into real gains in market access for important developing country products (like sugar, beef and textiles)
  • Fewer sensitive products for Europe
  • Developing countries to be allowed to designate 20% of all tariff lines as Special Products; a workable Special Safeguard Mechanism
  • Tighter disciplines on blue and green box subsidies
  • Cotton: US to agree to trade reforms not aid, elimination of all trade distorting cotton subsidies, implementation of cotton panel ruling
  • Food aid: US to agree to tighter disciplines on use of food aid to end dumping while protecting emergency food aid
  • A NAMA formula that guarantees developing countries have to make smaller tariff cuts than rich countries
  • Reduced pressure on developing countries to negotiate services liberalisation; more space and time for them to decide own policies and judge possible impact; no unreasonable or aggressive requests

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