Developing Countries Challenge EU-US Agricultural Proposal

Oxfam-America
Wednesday, 20 August 2003

Developing countries, led by Brazil, India and China, have tabled a radical plan to reform agricultural trade. In a proposal directed at the Cancun WTO negotiations, they are demanding immediate action to end export dumping, cut production subsidies and improve market access.

The proposal represents a direct challenge to an EU-US plan tabled last week which would have left billions of dollars in export subsidies intact.

Celine Charveriat, head of Oxfam International in Geneva: "Unlike the EU-US offering, this is a serious proposal which provides a good basis for discussions at Cancun. It is high time that the European and American farm subsidy superpowers got serious about reforming their destructive agricultural policies."

Brazil, China and India alone represent over 60% of the world's farmers.

As a complementary approach, another paper, focusing on market access, was introduced by the Dominican Republic, Honduras, Kenya, Nicaragua and Panama. The Africa group also strongly criticized the EU-US paper in a joint paper.

Charveriat added: "This is the first piece of good news in months. This initiative could save the current round of trade talks from failure. The European Union, the United States and other developed countries will not deliver on any of their development promises unless they are pressured to do so. Today's proposal provides a good signal that developing countries will stand up for their rights at Cancun."

Key aspects of the Brazil, India and China proposal include:

Export competition: The proposal calls for the elimination of all export subsidies, with a quicker time-frame for those products of interest to developing countries. The EC/US proposal backtracked on the Doha mandate by proposing to eliminate export subsidies only in certain sectors and simply reduce them in other sectors.

Domestic support: the paper calls for substantial reduction of all subsidies, including those currently classified as minimally distorting, such as the "blue box" (to be eliminated) and the "green box" (some items to be capped). The EU-US proposal endorses continuation of the blue box and no capping or any other new discipline on the green box

Market access: This initiative proposes strong differentiation between developed and developing countries, in line with the need to rebalance the agreement which currently works in favor of developed country farmers. The paper endorses the blended formula proposed by the EU-US but reduces flexibility for developed countries to protect sensitive sectors through tariff peaks.

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