Events & Issues

New Delhi, 29 October 2008

African Nations In Doha

END AGENDA TO BEAT GLOBAL CRISIS

By Dr. P. K. Vasudeva

Faced with the global financial crisis and high food prices, African countries want to conclude the much-delayed modalities agreement in the Doha Round of talks on agriculture and market-opening for non-agricultural market access (NAMA) - industrial goods - by the year-end. But they are not going to tolerate the ongoing attempts to lower the “developmental dimension” in the modalities by the developed countries of the World Trade Organisation (WTO).

These modalities comprise a maze of rules that stipulate how WTO members must reduce their farm subsidies and import tariffs, as well as import duties on industrial goods. For African countries, the important developmental issues in these parameters include a steep reduction in the global cotton subsidies; special flexibilities to safeguard important farm products on which tens of millions of poor farmers survive; the mitigation of the erosion of trade preferences provided by their erstwhile colonisers; the duty-free and quota-free access for least developed countries with simple and easy rules; and so on.

“We are worried about the financial crisis, as well as the rising food prices, because most of our countries are dependent on external trade and we also import many agriculture products,” explains Ambassador Baboo Chekitan Servansing, coordinator for the Africa, Caribbean and Pacific (ACP) group. “Trade is part of the solution in the current global financial and food crisis and a strong agreement to reduce farm subsidies and rebalancing of trade rules will augur well for the world economy,” is his reading. And a delay to conclude this agreement could further compound the worsening crises.

Since the financial crisis in the leading industrialised countries is definitely bound to cause a hole in official development assistance budgets, it will crowd out aid for trade. Therefore, it is important that the Doha Development Agenda (DDA) is wrapped up without much delay. “The Africa group has decided to commit to concluding the Doha modalities negotiations by 2008 end,’’ says Ambassador Guy Alain Emmanuel Gauze, Africa group coordinator at WTO, who is still working hard to ensure the work on the modalities agreement on agriculture and NAMA is proceeding smoothly. 

An early agreement in the Doha Round “may unlock” the current stalemate in addressing various global problems and “will boost global trade at a time when fears of protectionism are on the rise,” is an opinion of Dr Anthony Mothae Maruping, Lesotho's trade envoy and coordinator for the least-developed countries (LDCs) group at the WTO.

As regards negotiations on industrial goods, the African nations are opposed to sectoral tariff elimination, as it would adversely impinge on their trade preferences. The elimination involves bringing tariffs on agreed products to zero. For the US, it is a vital demand to satisfy its domestic industrial lobbies and secure support for the modalities agreement.

A Sectoral tariff elimination is not obligatory for African countries. It is only voluntary,” explains Gauze, suggesting that they will not join the negotiations on the issue. “We are opposed to all such elements,” says Servansing, arguing that this issue would further undermine trade preferences.

Also, the duty-free and quota-free access for African countries cannot be burdened with what are complex rules of origin. There is still no clarity on various aspects relating to their access. Basically, the coordinators for the ACP group, the LDC group and the Africa group are all concerned about sustained attempts to undermine the developmental components in agriculture and cotton subsidies.

The US, the European Union, Canada and other industrialised countries are demanding a hefty payment from their developing country counterparts for the reforms they have to undertake in their agriculture. In fact, that shift has led to the collapse of Doha trade talks time and again.

For example, the US is not prepared to address its trade-distorting subsidies on cotton and other commodities until it secures enhanced market access for its farm products in developing countries. This condition puts paid to the flexibilities being envisaged for developing countries to protect their precarious farm production.

Along with Japan, Canada, Norway and Switzerland, the US and the EU have repeatedly maintained that they must secure a high level of access for their industrial products in developing countries as ‘‘payment’’ for their commitment to reduce the distortions they are causing in the global farm trade.

The ACP, the Africa group and the LDC group are pushing hard for simple and flexible rules for special products and a special safeguard mechanism (SSM) to protect their resource-poor subsistence farmers. These three groups have joined ranks with the G-33 coalition led by Indonesia which is demanding easy conditions to use the SSM mechanism to face unforeseen surges in imports of major food items.

The ACP wants a “SSM to protect their farmers from unforeseen import surges; the reduction of cotton subsidies; and a proper mechanism to address the erosion of preferences'', explains Servansing.  But the US, Australia and Uruguay ''are demanding tough and burdensome conditionalities that would make these provisions redundant,'' he asserts.   

The US, along with Australia, Canada and other farm produce exporting countries, want a set of tough rules for the SSM to ensure that it does not affect the normal trade in farm products. These rules suggest a high trigger for imposing special safeguard duties and low remedies with limited duration. In July this year, the talks broke down on SSM, among other issues, when India and China refused to accept the stringent conditions demanded by the US.

Subsequently, there were attempts to renew these talks but there has been no progress as the leading farming exporters are not budging from their tough conditions. Recently, Commerce minister Kamal Nath told the WTO director general Pascal Lamy that developing countries will never accept a SSM that is overly burdened with various cross-check conditions.

Apart from the SSM, there is complete silence on how cotton -- one of the boiling issues on the Doha agenda and the most important demand for the four West African cotton producers (Benin, Burkina Faso, Mali and Chad) -- is going to be addressed in the coming days. This is due to the US decision not to come up with an alternative to what the chair for the Doha agriculture negotiations had suggested.

In the last draft text issued in July, it said that cotton subsidies should be reduced by over 80 per cent, a suggestion that was rejected by the US. In a nutshell, the African countries are eager to conclude the Doha modalities agreement but they continue to face several hurdles to their developmental demands. ‘‘We are fighting a lot on these issues and it is important that they are addressed adequately,’’ said Gauze.

Oxfam, the developmental pressure group, cautioned the African nations about rushing into an agreement without addressing their concerns on special farm products and the special safeguard mechanism. The ACP, G-20 and G-33 must impress upon the developed countries to accept their special farm products and special safeguard measures to save their farmers and the WTO. ---INFA

(Copyright, India News and Feature Alliance)