Oxfam: Rich nations fixing world trade

Rich nations are rigging international trade by providing heavy farm subsidies while also pushing for developing countries to lower protective tariffs, according to a report released by the Oxfam aid agency.

    Rice subsidies, Oxfam says, exemplify the subsidy problem

    In negotiations at the World Trade Organisation, richer states - particularly the US and the EU - are forcing developing countries to open their markets and then dumping their own excess agricultural produce at below cost price, undermining the livelihood of farmers in poorer nations, according to the 68-page report.
      
    "This is an example of rigged rules and double standards at their baldest," said Phil Bloomer on Monday, head of Oxfam's Make Trade Fair campaign. "Their selfish motives couldn't be clearer."
      
    The US and EU have repackaged their farm subsidies so they appear to conform to WTO rules, but they are still able to dump products such as corn, milk, rice and sugar on world markets, the report said.
      
    WTO members are aiming to produce an accord to reduce tariffs and subsidies at a year-end summit in Hong Kong, which could lead to a binding trade liberalisation treaty by the end of 2006.
      
    But if the Hong Kong meeting collapses, the WTO "risks becoming an irrelevance in global trade", the report warned. "Developing countries would then face the demands of rich countries through bilateral and regional trade agreements."
      
    The rice trade is a particular problem, because it is the staple food for more than half of the world's population, Oxfam said. Rice-producing developing countries are being pressurised to lower their tariffs, while rich nations continue to dump their excess produce at below cost price, the report explained. 
      
    Dumping exports

    Between 2000 and 2003, the US dumped its excess rice production on export markets at 34% below its true cost, Oxfam calculated.
      
    "US rice would not be competitive without massive state subsidies," Bloomer said. "It is scandalous that poor countries are forced to compete with the US."
      
    American agribusiness is the real winner from the combination of subsidies and rapid trade liberalisation in developing countries, the report concluded.
      
    Neither the US nor the EU was immediately available to comment on the study.
      
    In 2001, the plan was to create a new global trade treaty by the end of 2004. But a WTO conference in 2003 collapsed amid bickering over investment rules between rich and poor members, as well as differences on agriculture.
      
    High-level meetings in Geneva in July 2004 finally led to a framework accord on cutting tariffs in agricultural trade, as well as export subsidies that have helped farmers in rich nations and undercut their poor country competitors.
      
    Also on Monday, actor Colin Firth will meet WTO Director-General Supachai Panitchpakdi to discuss the Oxfam report and present a petition with 7 million signatures on behalf of Oxfam, calling for world trade to treat poor countries more fairly.
      
    "Trade could be a powerful force for poverty reduction but unless the rules are changed, this will not happen," said Jo Fox, who is coordinating the petition for the aid group.

    SOURCE: Agencies


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