MercoPress. South Atlantic News Agency

Preparing for the WTO Cancún trade round

Several Latinamerican countries joined China, India, South Africa among others, in the presentation before the World Trade Organization, WTO, of a proposal to liberalize agriculture trade in response to a previous initiative from United States and the European Union, described as “unbalanced”.

The proposal subscribed by Argentina, Brazil, Chile, Mexico, Paraguay, Peru demands the elimination of all export subsidies beginning with those that have the greatest impact on developing countries, working on an agreed timetable.

The demand contradicts that of Washington and Brussels that originally proposed the parallel elimination of subsidies and export credits only for certain sectors, and simply reduces the rest.

In the chapter regarding domestic supports, the developing countries initiative demands substantial reduction of the different types of aid to agriculture, so generous in rich countries, including those that so far had been considered "minimally" distortional of international trade.

For the first time the elimination of the so called "blue box" is suggested. The "blue box" includes direct payments to US and EU farmers in the framework of production reduction programs that are not currently included in the cuts commitments.

Another target is the "green box" that finances subsidies and are considered to have a minimum impact on international trade. However developing countries fear these resources could easily be diverted for protectionist purposes. Among these are disaster aid to farmers, infrastructure, environmental programs and pest controls.

Regarding market access the developing countries initiative supports the US-EU mix of drastic tariff cuts with more moderate actions according to the different sectors. However it does limit the flexibility period that rich countries pretend to protect sensitive produce with the introduction of additional customs duties.

A second more radical proposal was presented by a group of relatively poorer countries who demand special treatment for access to the developed world markets with substantially less drastic tariff reductions, and greater flexibility, for developing countries.

The European Union non governmental organization Oxfam and a strong critic of US and EU farm policies described the Latinamerican proposal as "a good starting point for discussions" in the coming WTO ministerial meeting scheduled for September 10 in Cancún, Mexico.

"This initiative could avert failure of the current round of negotiations. The EU, US and other developing countries will not comply with their world aid commitments unless they come under pressure", said Celine Charveriat, Oxfam's spokesperson.