Friday, April 28, 2006

Oxfam: Poorer States Should Say NO!

Developing countries should walk away from any World Trade Organization (WTO) pact without big changes to make it more favourable to them, British aid agency Oxfam said on Thursday.

With WTO free trade talks struggling, Oxfam said rich states were not offering deep enough cuts in farm subsidies and tariffs, but were still trying to force sweeping concessions from developing nations on industrial tariffs and services.

The Doha Development Agenda, the official name of the WTO's trade round, was "dying a death by a thousand cuts," Oxfam International director Jeremy Hobbs told journalists.

"Rich nations are making hugely inadequate offers and at the same time demanding concessions from poor countries that could be devastating," Oxfam said in a report entitled "A recipe for disaster".

"Unless offers change significantly in the next three months, poor countries would be better off continuing to negotiate rather than signing a deal this year," it added.

Oxfam, whose views carry weight amongst developing country negotiators, said that it had always believed that a fair global trade deal could help poorer states, particularly by giving their farmers better access to rich countries' markets.

But what was currently on the table at the WTO, where states have just missed the latest in a long line of deadlines for progress in the round, fell far short of what was needed.

"Claims by rich countries that what is on offer now is pro-poor are entirely false: current proposals would hurt rather than help developing countries," Hobbes said.


Oxfam's conclusions were contested by the United States, which said that developing countries would benefit from its offer to cut farm subsidies.

"It is impossible to see how one can credibly cast that step as anything but pro-development," said Christin Baker, spokeswoman for U.S. Trade Representative Rob Portman.

The aid agency was also forgetting that 70 percent of the industrial duties levied by developing countries were on the goods of other developing nations, so poorer states would clearly gain from reform, she added.

Oxfam said it did not want the complete collapse of the round, which faces an end-year deadline, but negotiations should be extended even if this meant they lasted several more years.

Rejecting a deal posed risks because it could stoke protectionism and encourage richer countries to strike bilateral and regional deals from which the poorest would be excluded.

"However, what is on offer at the moment ... could actually make things worse," Oxfam said.

Proposals to drop ceilings for farm subsidies by both the European Union and the United States left them room to boost spending from current levels. Tariff cuts offered by Brussels could exclude many products of interest to developing states.

And much-trumpeted EU plans to end farm export subsidies by 2013 would remove only 3.6 percent of the bloc's spending on trade-distorting agricultural support.

In return, the EU and the United States were demanding developing country tariff cuts on industrial goods that "defied the lessons of history" and could threaten the viability of their industrial base.

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