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Agricultural issues hampering trade talks: WTO

india Updated: Nov 04, 2006 21:45 IST
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The head of the World Trade Organisation has said that the United States, the European Union and India will have to compromise on agricultural issue in order to restart stalled trade talks.

"The stumbling block of this negotiation for the moment is agriculture," said Pascal Lamy, WTO director-general.

"The three big players, the US, EU and India, ... haven't found the sort of right balance between the two elements of the negotiations, which is the removal of trade-distorting subsidies and increased market access," Lamy said in a speech at Harvard University's Kennedy School of Government in Cambridge, outside Boston.

Lamy's speech was interrupted repeatedly by protesters, the first of whom wore a "No WTO" headband and shouted, "The WTO means death to farmers. The WTO means death to fisherfolk."

At least five people, including that man, were escorted out of the room by campus police officers but none were arrested.

The logjam on agricultural subsidies and market-access rules prompted Lamy in July to suspend the 5-year-old Doha Development Round of global trade talks.

The current round of talks is known as the development round because part of its goal is to amend trade rules to assist the poorest of the WTO's 149 current members.

Brazil, which in recent years has been part of a vocal group of developing nations called the G20, in September called for resumption of the talks.

"A lot of political pressure for resumption is now there and notably developing countries have been the ones that have been the most vocal for the resumption because they consider that the option of the failure of this round is for them a catastrophe," Lamy said.

Lamy is scheduled to travel to Washington for meetings on Thursday and Friday with senior Bush administration officials, including US Trade Representative Susan Schwab, Treasury Secretary Henry Paulson and Agriculture Secretary Mike Johanns.

'GENEVA CONSENSUS'

Repeating a phrase he had used in a speech in New York earlier this week, Lamy called for a shift on trade negotiations from a "Washington consensus" to a "Geneva consensus".

"The Washington consensus could be characterised as, 'You liberalise and God will take care of the rest,'" Lamy said.

"The Geneva consensus is a bit more sophisticated. It starts with the fact that trade opening is good but that it only translates into welfare creation and poverty reduction if a number of other conditions are met, which belong to this side of life. Not the future one, this one."

As an example of a way the "Geneva consensus" could change the WTO's approach, Lamy cited a developing-world flower farmer whose farm was economically competitive and faced no tariffs but could not export to a wealthy nation because he lacked the equipment to test his crop to see if it met that nation's maximum residual pesticide standards.

In a case like that, it might be the responsibility of the WTO or other international organisations to find a way to provide financing for that equipment, Lamy said.

"The WTO has to focus more attention on why it is that developing countries do not always benefit from the theoretical benefits of trade opening," Lamy said.

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