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”: 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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