Agriculture export subsidies to be phased out by 2013

Ministers from 149 states saved long-running global trade talks from collapse yesterday with an interim deal to end farm export…

Ministers from 149 states saved long-running global trade talks from collapse yesterday with an interim deal to end farm export subsidies by 2013 and improve access to rich countries' markets by the world's poorest nations.

Following a week of complex and fraught negotiations, marked by violent demonstrations in Hong Kong, agreement was reached on a "modest" package of market-opening steps.

But the deal, hammered out after days of round-the-clock talks, was quickly condemned by Irish farming organisations.

The Irish Farmers' Association said it would cost up to 50,000 farming jobs, destroy a third of Irish farm output and result in the loss of €800 million to the rural economy.

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The Irish Creamery Milk Suppliers' Association described the deal as "disastrous for Irish farming, particularly the dairy and beef sectors".

World Trade Organisation (WTO) ministers expressed relief, however, that they had averted a repeat of failed conferences in Seattle in 1999 and in Cancun in 2003. But they described the Hong Kong pact as disappointing and said it would be difficult to wrap up the four-year-old trade talks by the end of 2006, after which President Bush may lose his congressional authority to negotiate trade deals.

"In a week of disappointments, this is no small prize," said European Union trade commissioner Peter Mandelson. "It is not enough to make this meeting a true success. But it is enough to save it from failure."

The agreement sets an end-date of 2013 for farm export subsidies, offers export help to the world's poorest countries, and brings some relief to struggling African cotton producers.

The compromise deal was reached after winning the backing of a group of developing countries led by Brazil and India.

WTO director general Pascal Lamy hailed the agreement as a breakthrough for the developing world. "This agreement is a rebalancing of the trade agenda in favour of developing countries."

But the deal was condemned by several international aid agencies, including Oxfam Ireland, as falling short of the needs of developing countries.

"This is a profoundly disappointing text in which the interests of rich countries have prevailed yet again," said Colin Roche of Oxfam Ireland.

In addition to committing developed countries to end subsidies on exports of agricultural goods, including cotton, by 2013, the deal aims to give duty and quota-free access to developed countries for agricultural produce from the least developed countries. But it also aims to further liberalise trade with developing countries in services and non-agricultural goods, a move opposed by many aid agencies.

The talks appeared close to collapse as tensions rose last week over a date for ending export subsidies. US representatives put pressure on the EU to unilaterally announce a date for ending its export subsidies but supporters of the EU's Common Agricultural Policy, including France and Ireland, insisted that a parallel commitment from the US should be forthcoming before any date could be given.

Mr Lamy told weary ministers yesterday that they had injected new impetus into the Doha round of trade talks, a so-far hapless drive to boost global economic growth and lift millions out of poverty by bringing down barriers to trade.

The sigh of relief inside the conference centre was echoed on the streets of Hong Kong yesterday as thousands of demonstrators marched peacefully to protest against the world trade talks.

The march was in stark contrast to Saturday's pitched battles between protesters and riot police. - (Additional reporting Financial Times service, Reuters)