Doha talks must get back on track

By BRIAN FALLOW

Trade ministers are gathering in Geneva in hopes of rescuing the Doha Round of world trade negotiations.

The round, launched nearly three years ago after the September 11 attacks on the United States, was derailed in Cancun, Mexico, last year.

On agriculture, the key to a successful round, the World Trade Organisation's 147 member states were unable to agree on a blueprint for more talks that would live up to Doha's commitment to substantial reduction in trade-distorting domestic support, phasing out all forms of export subsidies and substantial improvements in market access.

United States Trade Representative Robert Zoellick told the Financial Times that if they failed again this week, the round would be hard to revive.

A draft text drawn up by officials has, on the one hand, been dismissed as unacceptable by French President Jacques Chirac and, on the other, slammed by Oxfam as creating big new loopholes rich countries can use to keep their subsidies in place and markets protected.

The draft agreement would commit members to eliminating all forms of export subsidies, and measures such as export credits which have an equivalent effect, by "a credible end date".

Export subsidies have long been regarded by agricultural exporters as an especially egregious form of subsidy because they do not just protect the subsidising country's home market, they allow dumping of excess product in other markets at the expense of more efficient producers.

The European Union has agreed to their elimination.

Although that is welcome, says Oxfam, there is no indication of the timeframe and the agreement is unbalanced in that the disciplines on export credits (the United States' preferred mechanism) with repayment terms of less than 18 months have still to be defined.

The draft offers no formula for tariff reductions. But it does enshrine the principle that the highest tariffs should be subject to the deepest cuts and that substantial improvements in market access be achieved for all products.

But it allows a carve-out - "flexibilities" is the jargon - for sensitive products. Oxfam says this will be used to protect rich countries' domestic markets in such commodities as sugar, beef and dairy products from outside competition.

The draft text notes that, "It is particularly difficult to develop a fair contribution from developing countries on their sensitive products until it becomes clearer what contribution is likely to be forthcoming from developed countries".

On domestic subsidies, Oxfam said the draft agreement would allow greater use of so-called "blue box" measures, which do not encourage over-production but which are nevertheless trade-distorting.

Prime Minister Helen Clark described this week's talks as reasonably critical.

But Australian trade expert Alan Oxley does not believe the political conditions are right for progress, with a US presidential election in November and a complete change of European commissioners in October.