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WTO agreement a betrayal of development promises

19 December 2005

Oxfam: WTO agreement a betrayal of development promises

International agency Oxfam today condemned an agreement at the World Trade Organization (WTO) meeting in Hong Kong as failing to deliver on development promises. The agreement reflected rich countries interests far more than those of developing countries and would not deliver the reforms poor countries needed, Oxfam said.

“This is a profoundly disappointing text. Rich countries’ interests have prevailed yet again. The EU and US have betrayed their promises to reform trade rules to promote development and poor countries have had to fight a rearguard action simply to keep some of their issues on the table. Small progress on some aspects of agriculture is more than cancelled out by extremely damaging proposals on services and industry,” said Phil Bloomer, Head of Oxfam International’s Make Trade Fair campaign.

“Developing countries were put in an impossible position. Either to accept a text which is seriously flawed, or face blame for failure. They remained assertive and united during this meeting and clawed back ground from some even worse proposals. However, it is clear that many of them have accepted this text reluctantly,” he added.

Ministers and commentators are assuming that another WTO meeting will take place early next year to finish off the deal but Bloomer warned that “unless rich countries fundamentally change their attitudes to these negotiations no amount of extra time will make a difference.”

In agriculture, the agreement includes a welcome commitment to ensure developing countries have the right to protect products of vital importance to poor farmers. There is also a pledge to eliminate export subsidies and equivalent payments by 2013. But this is three years later than originally hoped and EU export subsidies account for only 3.5% of its overall agricultural support.

Agriculture is the area of the greatest importance to developing countries but the bulk of negotiation remains to be done. The ministerial text does not offer to cut rich countries’ domestic subsidies that cause dumping, nor does it propose tightening the disciplines on allowable payments. There is no guarantee that developing countries will gain significantly greater access to northern markets.

On cotton, the US is offering to eliminate all forms of export subsidies, which is welcome, but this is already required by a WTO ruling and these payments only represent 10% of overall spending. The proposal does not address the core issue of domestic payments that have been proven to distort trade and facilitate dumping.

In the other areas of the negotiations – services and non-agricultural market access – the proposals have gone from bad to worse. The right for poor countries to protect basic services and emerging industries has been comprehensively undermined, with grave prospects for development.

The much vaunted ‘development package’ for the poorest countries has dwindled to include nearly empty offers on aid for trade, with very little new money, and a watered down duty free quota free package that will still allow rich countries to exclude key products vital to the livelihoods of millions of poor people.

Bloomer: “There is nothing free about this offer of duty and quota free access. Rich countries will still be able to protect key products like textiles. It is pathetic that this meeting couldn’t even deliver agreement on a package for the poorest countries”.

ENDS

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