Poor countries say farm reform key to trade round

Poor countries say farm reform key to trade round

GENEVA (Reuters): Key developing countries have signaled strongly this week that they will refuse to agree to a new global trade round unless the big powers pledge to work to end all farm support, diplomats said on Wednesday.

The message has come from delegations to three days of talks on agricultural reform at the World Trade Organization (WTO), from a Zanzibar meeting of the world's 49 poorest states (LDCs) and from Southeast Asian foreign ministers in Hanoi.

"The farm subsidy issue is building up a hard head of steam," said one trade envoy. "It could really be a killer as far as a round is concerned."

And the warning was driven home by a senior official from Brazil, emerging as a major player in trade diplomacy, who told reporters in Geneva that his country would not agree to a round unless quick dismantling of farm subsidies was on the agenda.

"Brazil cannot accept a comprehensive round with a narrow mandate in agriculture," declared the official, Pedro de Camargo Neto, who headed his national team at WTO discussions on farm trade reform.

Poorer countries -- backed by richer farm powers like Australia and Canada -- say subsidies protect domestic markets from cheaper foreign imports, and give subsidized exporters an unfair advantage in global markets.

WTO Director-General Mike Moore has set next Tuesday as a time for "bench-marking" whether conditions were shaping up for agreement on a round to be ready for approval by trade ministers from its 141 members at a meeting in Qatar in November.

But although this week's farm trade talks in Geneva were not formally linked to the project, diplomats said they gave little encouragement to its backers -- primarily the European Union, the United States and Japan.

The chief EU delegate to the talks told reporters on Tuesday that he saw little chance of agreement on farm reform being reached outside a round -- which Brussels wants to include talks on rules for investment and competition policy.

Developing countries think this is simply a cover that will enable the EU to put off for as long as possible having to address the hot political issue of domestic support and export subsidies to its farmers.

The United States would be happy with a smaller agenda to include negotiations on slashing tariffs on goods. But poorer states insist it must abandon export credits.

Brazil's Camargo Neto said on Wednesday both EU and U.S. support systems were bad, and were emblematic of how the big powers had ensured that the outcome of the 1986-93 Uruguay Round worked in their favor.

"We (the developing countries) open our markets for them. They keep their subsidies and deprive us of our markets through this iniquitous subsidy system," he said.

But in contrast to anti-globalization protesters, who include many farmers' groups in Europe and argue they are defending poor nations by fighting free trade, Camargo Neto said developing countries wanted to see liberalization.

"For all developing countries, agricultural exports are the key to our progress, to fighting poverty, providing jobs -- and creating reliable markets for producers in the rich countries," he said. "People in developed countries must understand that."

At the Zanzibar meeting of LDCs, or countries designated by the United Nations as the world's least developed, Tanzania and other delegations also targeted big power farm subsidies, linking guaranteed progress on the issue to a round.

In Hanoi on Tuesday, foreign ministers of the ASEAN grouping agreed to work for a common stand to address the decline in world prices for commodities, on which many poorer countries depend, through pressure for an end to EU and U.S. farm support.