Mexico WTO talk may fail to reach new accord

Adianto P. Simamora, The Jakarta Post, Jakarta

The upcoming September World Trade Organization (WTO) talks in Cancun, Mexico, is unlikely to reach a new accord on a planned global trade pact by 2005 amid sharp disagreement among member countries on a number of key issues, a top official at the Ministry of Industry and Trade said on Friday.

Ministry industry and international cooperation director general Pos M. Hutabarat said one significant hurdle was persisting differences on how to liberalize the agricultural sector.

The U.S. has been leading a campaign for WTO member countries to slash their import tariffs on agricultural products, but Japan has insisted that it would maintain its tariffs, particularly on rice. Developing countries want developed nations to eliminate government subsidies in the agricultural sector, while countries from Europe want to maintain subsidies to protect their farmers.

"Looking at this situation, I'm afraid the upcoming meeting will likely fail to reach a new accord," Pos told reporters.

Such a failure will delay a planned opening of the world agriculture sector starting 2005 in a bid to boost investment and trade.

The 146 member nations of the WTO have previously missed several key deadlines. An agreement on demand for poor countries to have access to cheap medicines was supposed be hammered out in December last year.

Agreement on the liberalization of the agriculture sector was also supposed to be reached in March 2003. But at the last meeting in Japan, sharp differences prevailed.

Ministers of WTO member countries meeting in Paris late last month had also failed to narrow their differences. Another meeting is scheduled for June 20 to June 22 in Egypt before the round in Cancun.

In the next meeting, Pos said Indonesia would continue to demand flexibility in tariff cuts for key agricultural products, mainly rice, sugar, soybeans and corn as these were considered strategic commodities to ensure future food security for the country.

"We will continue to fight for flexibility in tariff cuts," he said.

Under the proposed flexibility, Indonesia can still impose a higher import tariff on the four products to help protect local farmers from cheaper imported products.