Mon, 07 Mar 2005


Ministers agree on farm subsidies plan

Associated Press, Ukunda, Kenya

Trade ministers from 33 countries pledged to craft a rough plan by July on how rich countries will cut farm subsidies and other issues related to trade in agricultural goods, an official said.

Poor nations have in the past demanded rich countries slash their farm subsidies, arguing the subsidies undercut the competitive advantage of one of their main revenue sources. The demands led in part to the collapse of earlier talks intended to liberalize global commerce.

Ministers should have a more polished plan ready by the time the World Trade Organization's top decision-making body, a biannual trade ministers conference, meets in Hong Kong in December, Kenya's Trade Minister Mukhisa Kituyi told journalists over the weekend at the end of the WTO preparatory meeting he hosted.

"We are committed to establishing comprehensive and balanced modalities in agriculture by the Hong Kong Ministerial Conference," said Kituyi.

The United States, however, said that negotiations on cutting farm subsidies and other agricultural matters have to go hand-in- hand with talks on demands, mostly from rich countries, that nations cut import duties on manufactured goods and accept foreign competition in areas like communications and financial services.

That is likely to hit poor countries hardest.

On the other hand, Brazil and Australia said that negotiations on farm subsidies should lead the way for talks on import levies and foreign competition in services.

"I think that everyone agrees the final package has to be a balanced package of all these elements," said acting U.S. Trade Representative Peter Allgeier.

"Leadership must be by agriculture because that is why the round exists," said Brazil's External Relations Minister Celso Amorim.

EU Trade Commissioner Peter Mandelson and Agriculture Commissioner Mariann Fischer-Boel said the talks have given political impetus to the current round of trade negotiations.

"There is a growing consensus among participants on the principles that should underpin the (current round of trade talks) in industrial tariffs: the need for real tariff cuts combined with a recognition of development needs," they said in a joint statement.

"On agriculture it was agreed that considerable progress, notably on market access, has to be made," they said, adding they had committed the EU to working toward an agreement to put a ceiling on tariffs.

The Kenya meeting is among a series of gatherings seeking to settle key issues before the Hong Kong conference, where the WTO hopes to adopt a new set of global trade rules.

Officials said that trade ministers would like to conclude the current round of talks to further liberalize global commerce by 2006.

It was launched in Doha, Qatar, in 2001 and was originally supposed to have been completed at the end of last year.

A conference in Mexico in 2003 collapsed amid bickering over investment rules between rich and poor nations, as well as differences on agriculture reforms.

High-level meetings at the WTO headquarters in Geneva last July led to a "framework" accord, that laid some groundwork on cutting tariffs in agricultural trade, as well as export subsidies that have helped farmers in some rich nations but have undercut competitors from poor countries.

Rwandan Commerce Minister Manasseh Nshuti said the talks on agricultural reforms were better than he had expected, with the European Union being more "accommodative."

He said that African Union trade ministers pushed for more details on figures and deadlines on farm subsidies cuts from the meeting, but did not get them.