Trade: US-EU Farm Deal Is No Breakthrough

Oxfam-America
Wednesday, 13 August 2003

The world's two subsidy superpowers, the European Union and the United States, concluded today a bilateral agreement on agriculture which will do little to advance reforms at next month's World Trade Organization meeting in Cancun, Mexico, says Oxfam.

While the agreement might give momentum to the negotiation process, which is currently stalled, the deal is a far cry from what is needed to achieve meaningful reform in world agricultural trade, and remains vague in important areas.

"The EU and US are moving inches when they have miles to go. Cancun is only 28 days away and still it seems they are satisfied with restating vague aims and renaming existing subsidies instead of committing to any meaningful reform. It is extremely disappointing," said Oxfam's Head of Advocacy in Geneva, Celine Charveriat.

Today's agreement is very bad news for developing countries. For instance, the US and the EU have only agreed to eliminate export subsidies and the subsidy component of export credits in certain sectors. Domestic subsidies will see some changes but these will be largely cosmetic, involving exploitation of a complicated categorization system. Throughout the text there is a lack of clarity on figures which makes it nigh impossible to judge the extent of the proposals.

"This is all more about show than substance. By limiting the removal of export subsidies to a number of commodities, the EU and US are violating the spirit and the letter of the Doha declaration where, among other things, they agreed to eliminate all export subsidies. Ninety six percent of the world's farmers who cannot compete with the treasury departments of the EU and the US have been let down by today's deal," said Charveriat.

During the Uruguay round the EU and US reached a bilateral agreement which left developing countries no room to move on agriculture. This week's machinations look like yet another attempt to present an EU-US agreement as a fait-accompli to the WTO ministerial, and in this way to overrule the interests of developing countries.

Oxfam is calling on rich governments to honor the promises made at Doha to end subsidies that encourage export dumping and to protect food security and rural livelihoods in the world's poorest countries. With the WTO meeting in Cancun from September 10-14 time is running out to make this a genuine development round. Poor countries need real reform to Make Trade Fair.

For more information, or to contact Oxfam-America, see their website at: www.oxfamamerica.org