WTO Talks Continue as EU Trade Chief Warns Aid Deal Could Fail

The World Trade Organisation (WTO) talks have continued into Wednesday with Europe’s trade chief giving a warning that a drive to aid the world’s poorest countries may not succeed, which would leave the WTO with very little to show for their week of debating.

|PIC1|Peter Mandelson did not mention any specific nations, but European diplomats have said that both the US and Japan have been reluctant to accept drastic new initiatives to see duty-free and quota-free access for their goods, which poor states were asking for.

In a news conference Mandelson said, “I'm worried that the LDC (Least Developed Countries) package could now be in some trouble. If we cannot deliver on this, I really think we should ask what we are doing in Hong Kong.”

The 149-WTO member countries have already given up on a draft free trade treaty since they began talks in Hong Kong, which has left many trade diplomats seeking a new package for poor nations as the most realistic aim for the conference.

The European Union in particular has been criticised by others as being too inflexible in cutting farm duties, and this has been one of the main obstacles in the WTO’s Doha round of free trade negotiations.

One major proposal is for duty-free and quota-free access to the world’s largest and richest markets for exports from the poorest countries. However, trade officials have reported that the US has been hesitant to allow poor exporters free access to the more sensitive areas of its markets such as textiles, sugars and cotton, report Reuters.

|TOP|Japan has also shied away from allowing others to enter into its rice markets.

A US trade official has also said, “There are limits to how far we have to go politically. Some areas are just too sensitive,” reported Reuters.

Another measure that have been proposed has been an “aid-for-trade” deal that could open up the possibility to help exports enter richer markets from poorer countries.

Also on Wednesday, the US stated that it would double its aid-for-trade grants to developing countries. The amount it offers for this will now rise to US$2.7 billion each year until 2010. In addition, Japan has also pledged to give US$10 billion to help poor countries in developing their export capacities.

|AD|However, relief agency Oxfam has questioned the sincerity of these offers, and has said that a large proportion of the money was aid that had already been promised to other aid areas, and therefore, other programmes would suffer as a result.

An Oxfam statement said, “In each case, most of the money would come from existing aid budgets, forcing poor countries to decide between trade and spending on basic essentials like medicines and education. Aid for trade is needed ... but it must not be a substitute for fairer trade rules.”

Another passionate plea was also made by African farmers calling for the US to remove its cotton subsidies immediately. These subsidies, they say, have continued to halt them competing on world markets. However, opposition to this has come from Washington.

Reuters report that US Trade Representative Rob Portman did not discuss dates for phasing out subsidies in a meeting on Wednesday.

The spokesman for the African Union, Rachid concluded that the poor nations were extremely wary of the richer nations simply “repackaging old ideas to claim something is on the table.”