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Africa: Trade Talks Background
AfricaFocus Bulletin
Jul 31, 2004 (040731)
(Reposted from sources cited below)
Editor's Note
Discussions continued beyond Friday's midnight deadline in world
trade talks in Geneva, as major countries pressed for wording
compromises that would avoid an obvious breakdown. West African
cotton-producing countries reportedly accepted a U.S. pledge to
deal with the issue of cotton subsidies expeditiously within the
wider agriculture negotiations. Even if disagreements are papered
over, however, fair trade campaigners note that the text remains
deeply unbalanced in favor of rich countries, with their
commitments under the framework text still vague and ambiguous in
comparison with concessions exacted from developing countries.
Observers agree that even if a compromise declaration is achieved
this weekend, the hardest bargaining is still ahead. Any real shift
in the negotiating balance to produce benefits for developing
countries is still a distant prospect.
This AfricaFocus Bulletin contains a background note by Third World
Network from earlier this week on the cotton issue, and several
recent statements on the talks released by Oxfam. For additional
bulletins with background on this and related issues, visit
http://www.africafocus.org/econexp.php
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West African countries insist on urgent action on cotton
By Tetteh Hormeku
Geneva, 28 July 2004
TWN Info Service on WTO Issues (July04/22)
29 July 2004
Third World Network
http://www.twnside.org.sg
[Note: Additional briefings from Third World Network, available on
the TWN website, regularly provide comprehensive coverage and of
these complex negotiations. For additional background on the cotton
issue in particular, see AfricaFocus Bulletin for May 14 at
http://www.africafocus.org/docs04/cot0405.php]
The West African cotton producing countries have insisted that
they were willing to show flexibility and allow the cotton issue to
be addressed in the context of the agriculture negotiations on the
condition that the cotton subsidies and other trade distorting
practices applied by cotton producing developed countries were
removed on an urgent and fast-track basis. Speaking at a press
briefing on Wednesday 28 July on behalf of the West African cotton
countries, the trade Ministers of Benin and Senegal attending this
week's General Council meeting of the WTO explained that the
West African countries expected the final July package to provide
clear and unequivocal measures to deal with the cotton issue
"ambitiously and expeditiously".
In response to questions from journalists as to whether they were
prepared to reject a final July package that did not reflect their
concerns, the Ministers explained that they were in Geneva to
participate in the negotiations in a positive spirit, but this did
not mean that they were willing to swallow anything that was handed
down to them.
They said that in the course of the visit of representatives of the
West African countries to Washington prior to the General Council
meeting, they had had comprehensive discussions with United States
Trade Representative, Bob Zoellick on both the development and
trade aspects of the cotton issue. They added that they listened to
Ambassador Zoellick explain the difficulties and constraints faced
by the US in relation to the cotton issue, and in exchange
explained to Zoellick their own difficulties and limits as well as
how far they were prepared to go, with each side promising to
maintain dialogue on the issue.
Opening the press briefing, Benin's permanent representative in
Geneva, Ambassador Samuel Amehou recalled the evolution of the
cotton issue from last year when four West African Heads of State
addressed the General Council in Geneva, through the various
meetings of groupings of both developed countries, such as the G8,
as well as of developing countries including the LDC meeting in
Dakar this year, the Kigali meeting of the African ministers of
trade, and the recent meetings in Mauritius of the ACP group and
the G90. He reminded that throughout this period, the cotton
issue had been understood on all sides as a specific problem which
required urgent, specific attention, an understanding which before
and at Cancun was expressed in a decision to treat cotton as a
separate issue.
Amb. Amehou said that since Cancun however, difficulties began to
be expressed on the cotton issue being addressed on a separate
basis, which led to the June meetings of ACP and G90 ministers to
affirm a demand to treat the question on a stand-alone basis. This
notwithstanding, pressure to subsume the cotton issue in the
general agriculture negotiations had been relentless. In view of
this pressure, and in the spirit of showing flexibility to move the
negotiations forward, the West African cotton producing countries
had now agreed to include the issue within the agriculture
negotiations.
According to Amb. Mehou, a paper to this effect has been tabled in
the WTO outlining the three concerns which need to be addressed in
order that the issue was not marginalised and forgotten within the
main agriculture negotiations. These concerns included a concrete
commitment to resolve the cotton issue on an urgent and fast track
basis; a precise calendar for dismantling the cotton subsidies
provided by developed countries; and the establishment of a fund
and other effective measures to fully take into account the
developmental aspects of the cotton problem.
He added, in coming forward with this approach, the West African
cotton countries had shown a high level flexibility, and expected
their partners to respond in kind. Unfortunately, however, no
response had been forthcoming so far from the partners.
In the view of the Amb. Mehou, far from any positive response to
their proposals, the progress of the negotiations so seemed to
confirm the fears at the basis of their earlier insistence of the
cotton being treated on a stand-alone basis. In apparent reference
to the discussions earlier in the day during the Heads of
Delegations meeting, the Ambassador stated that with the
mainstreaming of cotton in agriculture, the risk was materialising
of the issue being diluted and forgotten, together with the fate of
the millions of small peasant producers whose livelihood depended
upon a just resolution of the issue. At the meeting of the HOD,
there was hardly any mention of the fate of cotton in all reports
presented on progress of negotiations so far, and it was left to
Amb. Mehou to remind the gathering that the issue was still
outstanding.
The Trade Minister of Benin, Fatiou Akplogan made it clear that the
proposal submitted by the Cotton countries on how to deal with the
issue in the context of the agriculture negotiations should be
understood as a proposal for negotiation, rather than as a
unequivocal commitment. He explained that this was in response to
concerns raised by the developed country cotton subsidisers to the
effect that they faced internal constraints which prevented from
dealing with the cotton issue outside the agriculture negotiations.
Minister Akplogan stated further that this meant that the West
African cotton countries, together with countries of Sub-Saharan
Africa as a whole, as well as their allies, expected a meaningful
response from the other side. Such a response should state
unambiguously that issue would be dealt with in an "ambitious and
swift" manner, recalling the phrase used by the Heads of States at
the recent G8 meeting. However, that this response had so far not
been forthcoming. The Minister further stated that he had,
together with colleagues from Chad, and Mali, met with Tim
Grosser, the Chair of the Agriculture negotiating group on June 27,
prior to Grosser issuing his agriculture text, and had envisaged a
commitment in the text in line with their demands, but were
disappointed.
The Senegalese Trade Minister, Mr Ousmane Ngong, stressed that the
position on cotton reflected political will and corresponding
decision at the highest political level of the Heads of State these
countries with the solidarity of their counterparts, and that the
cotton problem was not unique to the four West African countries
alone. He said the situation of cotton producers in Africa had
worsened from last year when the issue first came to prominence,
with the cotton production in the United States having multiplied
two-fold, with equally multiplying consequences for the depression
of world prices for cotton, and making the situation of poor cotton
even more precarious. In this context, it was difficult for the
countries to accept the cotton issue being subsumed in the
agriculture negotiations if the proposals put forward were not met.
As to whether the West African countries would refuse to sign to a
July package that did not satisfy their demands, Beninois trade
Minister Akplogan stated that they were open to negotiate but were
not prepared to accept the death of thousands of peasants as the
price of a deal.
Oxfam Briefing Paper
One Minute to Midnight
July 2004
Will WTO negotiations in July deliver a meaningful agreement?
[For the full report and related press releases, see
http://www.oxfam.org.uk/what_we_do/issues/trade/bp65_wto.htm]
One week away from a crucial meeting of the General Council of the
World Trade Organisation, time is running out for the Doha round.
Almost a year after the ministerial conference in Cancun and three
years after the Doha round, negotiations have gone in circles
because of the continuing deadlock on key issues such as
agricultural reform. The July framework negotiations represent a
crucial juncture for rich and poor countries alike. Any dilution of
the Doha development objectives to accommodate developed countries'
self-interested mercantilism would damage the prospects of poor
countries of the South. On the other hand, a failure would further
weaken the multilateral trading system. Oxfam calls on WTO members
to agree to a meaningful, pro-development framework by the end of
July 2004.
Introduction
Almost three years after the mandate of Doha was signed, members of
the World Trade Organisation are at a crossroads. The completion of
a meaningful development round is an essential condition for the
survival of a rules-based multilateral trading system. In the past,
the major trading nations, such as the United States, the European
Union, Japan, Canada, and Australia controlled the WTO to their own
advantage. Today, they are facing an increasing challenge from the
majority of the member states: developing countries, whose
interests have been ignored or damaged by previous agreements.
For the past three years, despite promises made at Doha, developed
countries have not provided the political vision and leadership
that would create the conditions for a transition to a fairer and
more sustainable trading system, and a set of rules that would
favour equitable development. Old-style mercantilism still
prevails, in complete contradiction to the international
community's commitment to use trade as a lever to reduce poverty
and achieve the UN Millennium Development Goals.
After the failure of the Ministerial Conference in Cancun in
September 2003, developing countries were accused of making
'unreasonable' demands on developed countries to fulfil the
commitments that they had made as part of the Doha mandate. Now, in
advance of the July meeting of the General Council, the blame game
has begun again. Developing countries are being put in the unfair
position of having to accept a modified framework or take the blame
for the collapse of the round. Such an interpretation completely
ignores the main factors that have been blocking progress in the
round so far:
- an overloaded, complex negotiation agenda, including new topics
such as 'the Singapore issues' (investment, government procurement,
competition, and trade facilitation);
- the intransigence of the United States, delaying reform of the
agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) until August 2003, and insisting on the freedom to continue
subsidising its domestic cotton production;
- the lengthy CAP reform process, which resulted in a modest
reform package by June 2003, and the U-turn represented by the US
Farm Act, which was enacted a few months after the Doha ministerial
conference both domestic developments contradicted commitments
made at the WTO to substantial agricultural reform;
- non-transparent, chaotic processes, which contributed to the
failure of the Cancun conference.
The Doha round has now reached a critical point. The WTO
negotiations on a framework must remain true to the letter and
spirit of the Doha mandate. Fairer trade rules would not only allow
developing countries to use trade to achieve sustainable
development, but would also strengthen the rules-based multilateral
trading system, which benefits all countries.
Oxfam Press Release - 28 July 2004
US blocking trade deal at WTO
Geneva: International agency Oxfam today accused the United States
of blocking progress on reform of global trade rules. US
participation in the negotiations was characterised by
intransigence and the pursuit of short term self interest, which
could cause the current round to collapse, said Oxfam.
World Trade Organisation (WTO) members are meeting this week in
Geneva in an attempt to move forward the talks that stalled last
year in Cancun. As the end of week deadline looms, the chances of
a successful outcome are dwindling.
"The US is repeatedly violating the spirit and the letter of the
Doha Development Round. Their refusal to reform their harmful
cotton regime recently ruled illegal at the WTO demonstrates a
wilful disregard for multilateralism and the needs of developing
countries," said Phil Bloomer, Head of Oxfam International's Make
Trade Fair campaign
"Their aggressive insistence on obtaining maximum access to
developing country markets flies in the face of agreements that
poor countries should be allowed to protect vulnerable farmers and
industries," added Bloomer.
Oxfam highlighted five areas in which US behaviour was threatening
to derail the round:
Cotton: The US gives subsidies to its 25,000 cotton producers of up
to $3.9bn annually, more than three times US foreign assistance to
Africa. The WTO recently ruled that most of these payments were
illegal but the US is refusing to change. This is despite the
concession made by the West Africans to include cotton in the
agriculture negotiations.
Subsidy definition: the US is seeking to broaden the definition of
non-trade distorting subsidies i.e. the so called "blue box".
With a broadening of the blue box, the United States could
reclassify up to $10 billion in trade distorting support, including
countercyclical payments, which were challenged in the US-Brazil
cotton dispute because of their damaging impact for other
agricultural exporters. Rather than agreeing to reduce subsidies
the US is looking for loopholes to hide export subsidies and
dumping.
Market Access: The US is pushing for increased access into
developing country markets, both for agricultural and industrial
products, and refusing to allow poor countries to protect
vulnerable or fledgling industries, despite the fact that a
guarantee of this protection was part of the Doha declaration.
Export Credits: The US has the biggest export credit programme in
the world covering an average of $3.4bn in exports per year. The
recent cotton panel at the WTO ruled that these export credits were
in fact trade distorting and should be reformed. Despite this, and
despite recent EU offers to eliminate their own export subsidies,
the US is refusing to reciprocate.
Food Aid: The US is the world's largest provider of food aid,
accounting for some two thirds of the total and amounting to an
average of $2bn a year (1992-2002). While food aid plays a vital
role in humanitarian emergencies, some US food aid is not used in
this way but is used to break into new markets. The US sends more
food to countries like Indonesia and Peru than Ethiopia. This
undermines local farmers and amounts to disguised export dumping.
Bloomer: "It is extraordinary that the US seems ready to sacrifice
its share of the $3 trillion that might be generated by successful
completion of the Doha round for the sake of a handful of very rich
farmers and other vested interests. If rich countries do not start
to face the facts and work to make this a true development round
they will be responsible for its failure and for the huge attendant
losses."
Oxfam Press Release - 30 July 2004
Oxfam condemns proposed trade deal for failing poor countries
International agency Oxfam today described a new draft declaration
issued by the WTO as deeply disappointing and not sufficient to
meet the needs of developing countries. The proposed deal would put
the talks on the wrong track if accepted and could even cause them
to collapse, warned Oxfam.
Celine Charveriat, Head of Oxfam International's Geneva office
said: "The draft released this morning is unacceptable because it
fails to meet the needs of developing countries. Presented as a
breakthrough, the text on agriculture does little to address the
problem of export dumping, instead introducing dangerous loopholes
for yet more subsidies especially from the US."
The text released earlier this morning is very unbalanced,
delivering detail on issues of importance to developed countries
like market access for industrial products but failing to address
agricultural issues of key concern to developing countries.
Charveriat: "After days of closed door negotiations, rich countries
have delivered a deeply unbalanced text as a take or leave it
option. This puts developing countries in the unfair position of
having to accept a bad deal or reject and get blamed by the US and
EU for failure."
The draft fails adequately to address the issue of US cotton
subsidies recently ruled illegal at the WTO. Cotton is to be folded
into the overall agriculture negotiations and there are no specific
commitments to eliminate trade distorting support or to fast track
implementation of reform.
Charveriat: "Failure to address the cotton issue is a serious
betrayal of developing countries and will have massive implications
for the 10 million West African cotton farmers whose livelihoods
are currently undermined by US export dumping. If these talks fail
the responsibility will lie squarely with those who ignored the
lessons of Cancun: namely the US and EU."
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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