WTO farm import tariffs row resolved

Four major trading countries along with the EU have resolved a row over the mechanism for calculating agricultural import tariffs, clearing a major obstacle in the Doha free trade round negotiations.

The EU offered a compromise to solve the import tariffs dispute
The EU offered a compromise to solve the import tariffs dispute

An European Union spokesman said Australia, Brazil, India, the EU and the United States agreed on the deal which was also accepted by a larger group of nations including Switzerland and Japan.

The agreement came after the EU offered a compromise to end wrangling between rich and poor over how to calculate import duties on agricultural goods. The proposed mechanism still needs to be put to the around 24 trade ministers attending a meeting in Paris.

Calculating votes

“The five interested parties have reached an agreement on the formula for calculating AVEs (ad valorem equivalents),” European Commission spokesman Michael Mann said.

The deal could open the way to eventual wider agreement among the Geneva-based World Trade Organisation’s 148 member states to bring new zest to the global economy.

“Agriculture is the engine to push these negotiations forward, and as I see it that engine needs a jump start”

Robert Portman,
US Trade Representative

“Doha … will boost jobs and prosperity and can help lift literally millions out of poverty if we do the right thing,” new US Trade Representative Robert Portman told a news conference.

“Agriculture is the engine to push these negotiations forward, and as I see it that engine needs a jump start.”

Boosting incomes

The World Bank has calculated that conclusion of the round could boost global incomes by $500 billion a year, if it lowers
trade barriers, particularly between developing countries.

The round – which should have been finished by 2004, but has been dogged by wrangling over subsidies and long-protected markets – reaches its next milestone when the ministers meet in Hong Kong in December.

A blueprint agreed last year set out broad principles for continuing work on areas including farm trade and industrial tariffs, but WTO states now have just three months to sew up some key deals.

Negotiators are bogged down over how to slash rich state farm subsidies, give poor country producers a better deal, and open up markets across the globe for goods and services such as telecommunications and tourism.

Draft deal

Failure to meet some deadlines by July would jeopardise the chances of a draft deal in Hong Kong, itself a crucial step if the negotiations are to be completed in 2006 as planned.

“I refuse to feel pessimistic about the Doha round as a whole,” EU trade chief Peter Mandelson said before the talks. “The price of failure would be colossal.”

EU trade chief Peter Mandelson has cautioned against failure

EU trade chief Peter Mandelson
has cautioned against failure

But it was the 25-nation EU itself which stood accused by Brazil, Australia and India of holding up progress on market access to farm trade by making a stand on tariffs.

Tariff importers

Although highly technical, the question of how to convert the tariffs importers currently quote in dollars – or some other currency – per tonne into percentages, to give a starting point for cuts, could make a huge difference to exporters.

Brazil, for instance, was keen to secure a big tariff cut for its exports of poultry, beef and rice, which are sensitive products in Europe’s long-protected agricultural markets.

The EU says negotiations should press ahead on other thorny farm trade issues – including cuts in domestic support, phasing out of export subsidies and market access.

Source : Reuters

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