Between the lines

The Financial Times reports a feel-good message from the UNCTAD meeting in São Paulo. It seems that the proposal to agree—by July—on a ‘framework’ agreement for the completion of the WTO negotiations remains alive. bq. Negotiators hope that recently renewed political momentum will allow them to make progress on the tough inter-related farm trade issues. “Hopefully this will provide some genuine political guidance so that when I go back to Geneva, the negotiators can participate with more degree of flexibility,” said Tim Groser, chairman of the agriculture negotiating group in the WTO. (“Financial Times”:http://www.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1086940208888&p=1012571727102) There’s little news yet on the details of any progress. The most interesting remark in the FT report is EU Trade Commissioner Pascal Lamy’s very careful statement: bq. “Export subsidies need to be removed gradually, domestic farm aid needs to be reduced substantially, and market access needs to be increased substantially.” This is a piece of craft. Lamy has used the Doha mandate formula for the objectives of the agriculture negotiation in two out of the three elements (market access and domestic support). But he has diverged from the Doha formulation (“reduction with a view to elimination”) on export subsidies, probably indicating some of the substance yet to be revealed of the EU’s new proposal on export subsidies. “… removed gradually” probably means that the EU is not proposing to take an axe to it’s destructive subsidy spending. Only a knife; a whittling knife, most likely. Let’s see: the Uruguay Round reduced export subsidies (in dollar terms) by 36% over 6 years. Who thinks that the EU will propose to eliminate the other 74% in less than a decade?

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