“Time to get serious about agricultural subsidies” (“International Herald Tribune”, France, 6/2/2006)

The meeting of European and LatinAmerican- Caribbean countries held in Vienna in the beginning of May allowed for a fruitful exchange of views on many issues. Most important, it provided the opportunity for leaders to discuss the need to arrive quickly at a balanced, ambitious conclusion to the so-called Doha Development Agenda.

The Doha round is the best chance we have to reduce and eventually eliminate agricultural subsidies and to open markets for agricultural products. These are essential steps needed to increase wealth and create jobs through international trade, particularly in developing countries.

There is a growing awareness that subsidies are not only immoral, but also illegal. Decisions taken by the World Trade Organization in the last few years

- - many in response to complaints brought by Brazil - have endorsed the view that subsidies profoundly distort international trade. They increase poverty in developing countries, encourage inefficiency among producers in developed nations and punish consumers worldwide.

Trade in agricultural goods has never been the subject of a serious liberalization effort. Trade in industrial goods, by contrast, was the main goal of previous rounds under the General Agreement on Tariffs and Trade (GATT). As a result, protection of industrial products was significantly reduced everywhere, while protection of the agricultural sector was barely scratched. It is time to redress this imbalance.

Eliminating agricultural subsidies and opening markets in rich countries will affect no more than 1 to 2 percent of their labor force. That is nothing compared to the 30 to 35 percent of workers who hold industrial jobs in developing countries, whose markets for imported industrial goods are being targeted by richer nations.

Agriculture protectionism depresses living conditions worldwide to the benefit of a handful of privileged farmers in rich countries. More balanced international trade relations will have a multiplying effect on developing countries, where a significant part of the population makes a living from agriculture. This is particularly true of Africa, where millions of people who now face poverty and hunger will be included in the world economy.

The Hong Kong ministerial meeting late last year did not produce sufficient results, although some progress was achieved. Recent talks in Geneva have been increasingly permeated by a sense of frustration. The general perception is that positions have been crystallized and further moves are even more difficult. We all know that progress will only be achieved if all parties move at the same time. For example, the United States must make significant cuts in its agricultural subsidies; the European Union has to open further its markets for agricultural goods, and developing countries are expected to make appropriate moves in industrial goods and services. This three-way bargain cannot be seen as an equilateral triangle. The level of wealth in developed and developing countries is profoundly unequal. It is more than fair that the richest countries make deeper cuts. And the poorer among the poor should bear no cost; they must only gain from a trade negotiating process that is rightly called a development round.

Other developing countries must also take concrete steps in accordance with their possibilities. We must not be under the illusion, however, that concessions by developing countries in and of themselves will have the magic power to unleash the movement required from rich countries.

A recent editorial in the International Herald Tribune on the dismal state of the negotiations alluded to the need to “call in the paramedics”. I agree.

I am absolutely convinced that the time has come to involve world leaders in the Doha process. At the upcoming G-8 summit meeting in Saint Petersburg we will have an opportunity to discuss how to give political impetus to the Doha round.

The success of the Doha round will strengthen multilateralism. Our ability to make international trade freer and more just will enhance global governance. In doing so, we will be fulfilling our responsibility of addressing, in a collective way, the complex challenges of the modern world.