WTO Strikes Trade Deal

Sat Jul 31, 2004
By Richard Waddington and Patrick Lannin

GENEVA (Reuters) - Rich and poor nations struck a historic deal on Sunday to slash billions of dollars in farm subsidies, create more open industrial markets and revive stalled world trade talks that could boost global growth.

After five days of wrangling, the World Trade Organization's 147 member states formally agreed a framework that lays down the guidelines for its Doha Round, which has been in trouble since the collapse of talks almost a year ago in Cancun, Mexico.

"This is a historic moment for this organization," WTO chief Supachai Panitchpakdi told a news conference after the formal adoption of the agreement at a late-night session of trade negotiators at the WTO's headquarters.

The hard-won deal on a series of contentious trade issues, from farm reform to the launch of negotiations on a new customs code, puts the Doha Round firmly back on track, officials said.

Rich nations welcomed the deal, which commits them to a plan to cut back on the huge subsidies they lavish on farmers and give developed nations better access to world markets.

"The Doha Round is back on track. The results are good for the EU and good for developing countries," EU Trade Commissioner Pascal Lamy told reporters. He added the Doha Round might now be completed by the end of next year.

U.S. Trade Representative Robert Zoellick called the accord a "crucial step for global trade."

"Tonight, 147 economies have ensured that 2004 will go down as a productive year for the Doha trade negotiations. There's a lot of work yet to be done. But today's framework is a milestone," he said in a statement released in Washington.


After an all-night negotiating marathon, key WTO members, including the United States, the EU and Brazil and Japan, on Saturday had agreed to the elimination of export subsidies at a date yet to be set -- long a key developing country demand -- to limit other subsidies, and to lower tariff barriers.

Agreement in the sensitive field of agriculture opened the way for a similar accord in industrial goods trade and development issues, areas in which the WTO sought a framework accord to serve as a basis for future more detailed negotiations under the auspices of the Doha Round.

The World Bank says the round could help lift more than half a billion people out of poverty through increased trade, and boosting growth by injecting billions of dollars into the world economy.
EU Agriculture Commissioner Franz Fischler, who has been fiercely criticized by France, the biggest beneficiary of EU farm subsidies, for giving away too much, said the EU could "broadly accept" the farm deal.

A delegate from Mauritius, which has taken a leading part in the WTO talks on behalf of African nations, said the so-called Group of 90 developing countries could also live with the text even if it did not get everything it wanted.

Failure in Geneva could have delayed further trade liberalization for years.

The EU, the United States and countries such as Japan and Switzerland have said they will not slash the generous subsidies they lavish on their farmers unless they get greater access to markets for industrial goods in developing countries.

But the agreement makes clear that the poorest countries will not be forced to contribute to market opening in any area, including services.




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