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Cancun set for showdown over farm subsidies

Developing countries will be seeking a better deal for their farmers when ministers from the WTO's 146 member countries gather in Cancun, Mexico, from Sept. 10.

Buoyed by the success of Saturday's deal on patent rules and cheap medicines, they are determined not to let richer countries off the hook over promises made at the launch of the latest global-free-trade talks in 2001 to put development issues at the heart of the negotiations.

Developing countries account for about two-thirds of the WTO's membership, and have already shown they can be a force to be reckoned with if they act collectively.

"We need to see export subsidies phased out because they distort not just the international market but also our domestic markets," said Kenya's Ambassador Amina Chawahir Mohamed.

Ministers agreed in Doha on "reductions of, with a view to phasing out, all forms of export subsidies" in agriculture, but progress on the negotiations has since been slow and problematic.

Developing countries also want cuts in domestic support to farmers and better access to agricultural markets in the developed world.

Entrenched positions have meant that a draft declaration prepared for the Sept. 10 to 14 Cancun ministerial gathering is so far devoid of figures on exactly how much farm subsidies and tariffs should be reduced, and when.

The Mexico meeting has been called to take stock of the overall round of Doha talks that aim to tear down more barriers to global trade, with an accord scheduled by Jan. 1, 2005.

Developing countries argue that the more than US$300 billion spent each year by industrialized countries to help their domestic food producers prevents them competing on developed markets, but also on their home market.

"For us to have sustainable food security we have to be able to produce. The dumping of uncompetitive, subsidized agricultural produce has stolen our incentive to produce by denying us access to markets," Mohamed said.

Subsidies paid by Organization for Economic Cooperation and Development (OECD) countries per capita for cows and cotton bolls are "considerably higher" than OECD per capita aid for sub-Saharan Africa, according to the UN Development Programme's Human Development Report last year.

A proposal by four west and central African cotton-producing countries, led by Burkina Faso, for developed countries to drop cotton subsidies also features on the draft agenda for Cancun.

And developing countries are also resisting calls by richer countries for ambitious targets in opening up markets for industrial goods, stressing that for them tariffs are an important source of revenue and protection for their goods.

Kenya generates 16 percent of its overall income from import tariffs, even though the average tariff level is 1.6 percent, Mohamed said.

"We cannot take on any new commitments, in fact some of our tariffs are the lowest in the world, and we would like to see others, especially those in developed countries match our current level of commitment," she added.

International relief organization Oxfam has criticized the draft ministerial declaration for Cancun over its proposed targets and guidelines for cutting tariffs on industrial goods.

Developing countries would have to make deeper cuts than developed countries under the proposed formula, which, it also said, was contrary to the mandate agreed in Doha, Qatar.

Another area that is likely to produce clashes in Cancun between developing countries and richer ones is the issue of negotiations over new WTO rules on cross-border investment and competition policy.
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