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Talks in Trouble, EU Trade Chief Warns; Coalition Threatens Deal Over Farm Aid

Posted on: Monday, 19 December 2005, 06:00 CST

By Elaine Kurtenbach

HONG KONG -- The European Union's trade chief today warned that global trade talks were "going backwards" as developing nations threatened to reject any World Trade Organization deal that fails to protect their cotton, banana and sugar farmers.

Meanwhile, protesters scuffled with police outside the U.S. Consulate, throwing eggs at the building and covering it with graffiti. Demonstrators have been protesting daily since the six- day WTO talks began Tuesday. So far, the activists haven't caused the chaos and damage that marred past WTO meetings.

The talks have made barely any progress on how much to cut trade barriers in any of the three main areas WTO members were expected to address: agriculture, manufactured goods and services. Since the 149- nation WTO operates by consensus, the impasse could undermine the outcome of the meeting that wraps up Sunday.

"It is hard to see where progress can be achieved in Hong Kong if the talks continue in this direction," EU Trade Commissioner Peter Mandelson said. "The level of ambition, if anything, is going backwards."

The latest blow came when the Group of 77 African, Caribbean and Pacific countries -- many of whose populations are subsistence farmers relying on crops such as sugar, cotton and bananas -- today demanded safeguards for commodity growers and continued preferential access to European markets. EU tariffs and quotas favor Caribbean and African banana producers over large-scale growers in Latin America, which the WTO has ruled violates world trade rules.

Caribbean and African countries say ending the preferences could destroy their domestic banana industries, which are mostly small- scale family farms. Honduras, though, has threatened to reject any global trade deal that preserved the preferences.

Warning that trade talks risk failure, a broad group of nations including India, Brazil and Australia urged fellow trade delegates to refocus on resolving the "core" issue of farm trade, where talks have been stalemated for months. Members so far have spent considerable time discussing aid proposals for the world's poorest countries.

The United States and EU are holding up the talks by failing to offer more cuts in government support for their farmers, members of the Group of 20 leading developing nations and the Cairns Group of major food exporters said in a statement. Developing countries say rich nations' farm subsidies and tariffs block their access to those lucrative markets.

Source: Cincinnati Post

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