Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Oxfam Exposes Illegal Agricultural Subsidies

Wednesday 30 November 2005

Exposed: EU, US paying $13 billion in illegal agricultural subsidies

The European Union and the United States are illegally subsidizing their production of corn, rice, sorghum, fruit juice, canned fruit, tomatoes, dairy products, tobacco and wine, according to new research published today by international agency Oxfam.

The EU and the US must do more to deliver a development deal ahead of a crucial WTO Ministerial meeting on December 13-18 otherwise they could end up facing a mountain of litigation, Oxfam says, because developing countries will be left with no other options.

Of the 11 commodities studied, the US and the EU pay out total annual farm subsidies worth $9.3 billion and $4.2 billion respectively which help to distort world trade. Oxfam found that 38 developing countries are suffering from unfair competition as a result, including larger countries such as Mexico and Brazil as well as poor countries like Malawi and Mozambique.

Oxfam consulted legal experts who concluded that the affected countries could bring multiple cases against the EU and the US and win.

“The WTO cases that the EU lost on sugar subsidies and the US lost on cotton subsidies are just the tip of the iceberg,” said Phil Bloomer, head of Oxfam’s Make Trade Fair campaign.

“Oxfam is not against all subsidies but we’ve always said that the worst of them lead to dumping. We now know that many of these harmful subsidies are not only unfair but also illegal under WTO rules.”

Oxfam’s report says that the WTO’s dispute settlement mechanism is expensive and complicated and is therefore an option of last resort. “The way to reform global trade rules in order to promote development is across a negotiating table, not in a courtroom,” Bloomer said.

But rich countries are not doing enough at the current WTO talks. The EU and the US are even demanding immunity from prosecution under the so-called ‘Peace Clause’. Oxfam says that rich countries should not get immunity but instead should implement the agreements they’ve already signed, and offer deeper concessions to cut their trade-distorting subsidies and open up their markets. If not, developing countries should reject their deal.

“Unless the EU and the US live up to their promises at the WTO they will leave developing countries no option but the dock,” Bloomer said. “Poor countries shouldn’t be forced to seek development through the courts.”

Oxfam’s new research found that the EU and the US were breaking the WTO’s Agreement on Subsidies and Countervailing Measures. The subsidies are either prohibited because they are contingent on the use of domestic products over imported ones or actionable because they displace developing country exports, suppress market prices and harm other countries’ domestic industries.

Oxfam found that the US has paid $25b to its corn farmers over the past five years for a crop that would otherwise have lost $20b over the same period. Without subsidies, in 2004 alone, US production would be down 15%, its exports would have disappeared and world prices would have been 7% higher. Farmers from the likes of Paraguay, Argentina or South Africa – or those from countries where US corn is dumped, including Ecuador, Honduras, Peru and Venezuela – could have gained an extra $4b.

The US also pays subsidies of around $1.2b a year to its rice farmers, representing 99% of the value of the total US crop. Major rice exporters such as Thailand, Uruguay, Guyana, India and Suriname could all have strong claims against the US relating to third country market export sales, as could countries into which US rice is dumped such as Haiti, Zambia, Mexico, Ghana and Costa Rica.

The EU pays €300m a year to tomato processors mainly in Greece, Italy, Spain and Portugal, representing 65% of the value of the entire crop, enabling them to be the world’s leading exporters of tomato paste. Growers in South Africa, Chile and Tunisia are among those losing out.

The EU subsidises its fruit-juice processing industry, mainly in Italy and Spain, at a rate of more than 300%, or €250m a year. Growers from Argentina, Brazil, Costa Rica and South Africa could earn $40m a year more if the EU removed its subsidies and the world juice price rose by just 5%.

The EU also protects its dairy regime from competition and subsidises its dairy producers by €1.5b a year. Argentina, Brazil and Uruguay could export butter if EU export subsidies weren’t depressing world prices. EU butter is dumped directly into Egypt, Morocco and South Africa.

Previous Oxfam research has shown that the EU and the US are not doing enough at the WTO talks to cut their farm subsidy payments; in the case of the EU, it could even increase its support by $13b a year under the current offer. Oxfam has also shown that the vast bulk of EU and US subsidies go to their biggest producers and largely by-pass their smaller farmers. Subsidies should be reformed so that they support smaller farmers, rural development and environmental protection.

Oxfam says the EU and the US should stop paying prohibited subsidies on the basis of their “local content” only. They should reduce their trade-distorting support by more than they have offered so far and accept additional disciplines on those subsidies that remain. The US should stop all distorting support for cotton and the EU should eliminate all export support by 2010.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Mayor of Auckland: Alert Level Change Welcome News

Mayor Phil Goff says the government’s decision to move Auckland to Level 2 from 6am on Sunday will be welcome news for all Aucklanders.
“Moving strongly and quickly to contain this outbreak has once again proved effective in stopping the spread of community transmission and I thank all the Aucklanders who have followed the rules of Level 3 over the past week,” he says... More>>


 


Earthquakes: Tsunami Activity – Cancelled

The National Advisory issued at 2:48pm following this morning's earthquakes near the KERMADEC ISLANDS REGION is cancelled.
The advice from GNS Science, based on ocean observations, is that the Beach and Marine threat has now passed for all areas... More>>

Joint Press Release: Dirty PR Exposed In Whale Oil Defamation Trial

Three public health advocates are relieved that their long-standing Whale Oil defamation trial against Cameron Slater, Carrick Graham, Katherine Rich and the Food and Grocery Council has finally concluded and they are pleased that the truth has come out... More>>

ALSO:


Government: Next Stage Of COVID-19 Support For Business And Workers

The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend... More>>

ALSO:


Government: Balanced Economic Approach Reflected In Crown Accounts

New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected.
The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU)... More>>


Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

Parliament: Kiwi MPs Among The “Most Educated In The World”

New analysis of MP qualifications reveals New Zealand’s Parliament is one of the most educated and highest qualified in the world, and significantly more educated than Australia’s. The research, by Mark Blackham of BlacklandPR and Geoffrey Miller ... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels