Poor WTO Nations Want Rich Nations
To Cut Farm Subsidies

AP 9sep03

CANCUN, Mexico—Poor nations within the World Trade Organization banded together Tuesday, pushing rich countries to make big cuts to farm subsidies as ministers prepared for a five-day meeting in this Mexican resort.

The meeting, which starts Wednesday, includes 4,700 delegates from the WTO's 146 member nations and is aimed at breaking the deadlock in the current round of trade liberalization negotiations.

Ministers held private meetings in small groups to fix their positions ahead of the hard bargaining that is expected over the next few days.

The so-called Group of 21, which includes India, China, Brazil and Argentina, came together in an unprecedented campaign in support of their common goals.

"It is a historic event, the first time that such a large group of developing countries has been able to come up with such a paper," said Brazilian Foreign Minister Celso Amorim.

"We all agreed that the fundamental aspect of this endeavor is keeping our unity, and our unity will be tested at every moment in this conference."

In the past, developing countries have complained that they have little clout in the WTO, where powerful traders like the United States and European Union dominate negotiations.

The 21 countries together represent more than half the world's population and two-thirds of the world's agricultural producers.

Their proposal calls for substantial reductions in subsidies paid to farmers by the richest nations, primarily the European Union and the United States.

Earlier, EU Trade Commissioner Pascal Lamy said he could not accept the proposal because richer developing countries also should have to open their markets.

"We cannot see how everything ... should be done only by developed countries whereas developing countries considered as a bloc would be sheltered from any effort. This is just not on the cards," he said.

But South Africa's Trade Minister Alec Erwin said the developing countries' proposal - which his government supports - is the way forward.

"We believe the balance that we have struck in our paper for the first time meets the needs of a new and fair agricultural trading system," he said.

"The main burden of adjustment lies where it should lie, with the big economies, but will allow too for the developing countries to begin the process of reform."

Ministers from the 17-nation Cairns Group of agricultural exporting nations, led by Australia, said their goals are identical to those of developing nations like India.

"We face a common enemy - the enemy is the dumped surpluses, the subsidized exports," said New Zealand trade minister Jim Sutton.

"They undermine developing countries and the subsistence farmers in the poorest countries. They undermine the drive to get on the first rung of the ladder of economic development."

Some Cairns Group members, including Brazil and Argentina, are among the group of developing countries that have made the proposal.

Ministers also will consider whether to open their economies to more foreign investment - which some say will drive local producers out of business. Another issue will be how to cut tariffs on industrial goods without shuttering factories and spurring unemployment.

The talks are supposed to lead to a binding treaty on reducing tariffs and subsidies. Governments have given themselves until the end of next year to complete the work.

EU Trade Commissioner Pascal Lamy likened the talks to the preparation of a dinner party.

"We are cooking a rather complex meal, with a fixed menu of 20 items and 146 chefs," he told reporters.

"We are gathering the ingredients and starting the cooking ... we have to see in Cancun how each dish is progressing and assess what we have to do in each case to have it ready for serving in time."

U.S. Trade Representative Robert Zoellick said success at the WTO was important for the world economy.

"We want to open markets because that is key to both growth and development," he said.