MercoPress. South Atlantic News Agency

With no WTO agreement, FTAA is limited

Without advances in multilateral negotiations, the Free Trade Association of the Americas, FTAA, will not progress forecasted the president of the World Trade Organization General Council Ambassador Carlos Pérez del Castillo.

"Agriculture is far too important for countries such as Uruguay and Argentina and as long as contentious issues such as subsidies and domestic support to farming are not addressed, it's hard to see how market access can progress", said the Uruguayan diplomat Carlos Pérez del Castillo.

"How was Brazil going to purchase agriculture commodities from neighbouring Uruguay if the US can offer them far cheaper because of the high subsidies?" asks Mr. Pérez del Castillo adding that if no agreement is reached by January 2005 in the framework of WTO, "there won't be chance for FTAA".

Mr. Pérez del Castillo in his current post has toiled endlessly to try and re-launch WTO talks that have been stalled since the failure of the ministerial meeting last September in Mexico.

Apparently for different reasons a number of countries, developed and developing prefer the statu-quo fearing the challenge and attrition of new talks or loosing some of the unilateral privileges in market access.

However "the erosion of preferences also happens with bilateral agreements currently being signed outside of the framework of WTO, argues Mr. Perez del Castillo.

As to the European Union proposal of targeting pluri-lateral agreements for non contentious matters such as the "Singapore issues", (investments, competition transparency in government procurement and facilitating trade), Mr. Perez del Castillo is sceptic.

"Developing countries will not accept the "Singapore issues", not as a matter of procedure but because in the future other controversial issues could be included".

"If we advance with pluri-lateralism, WTO will loose weight and ground", says the president of the WTO General Council who nevertheless admits that the developed countries not wishing to be trapped by rules "will look for other roads like bilateralism in issues such as investments and competition".

But the crucial issue for developing countries remains agriculture, and "I believe that with political willingness there's room for an agreement and with some flexibility unblock negotiations for the rest of the issues".

"US must yield in domestic support issues; EU must accept a timetable for the elimination of its export subsidies and developing countries must show more flexibility in the opening of markets", underlines Mr. Perez del Castillo.

Further on he said that ten, twelve medium sized countries, seriously committed to the Doha round, could and must take the initiative of finding common ground that could be useful in building an "understanding".

In a recent Financial Times article jointly signed by Horst Koehler and James Wolfensohn, the IMF and World Bank directors warn that the main world "coalitions", US and its allies; the EU; Japan with Korea; the G-20 and other less developed countries "seem more distanced than ever from the main issues".

Mr. Koehler and Mr. Wolfensohn forecast that the current tendencies could accelerate towards bilateral and regional agreements, leaving many countries isolated from the main markets and vulnerable to more powerful trading nations.

"Developed countries must take the initiative adopting concrete and ambitious commitments to reduce barriers and subsidies that distort trade in agriculture", underline the Directors of the leading global financial institutions.