G-20 hits out at WTO’s farm export subsidy formula

NEW DELHI: The Group of Twenty (G-20) of developing countries at the World Trade Organisation (WTO), which includes India and Brazil among others, has criticised the official reference paper on export competition for not specifying a timetable for eliminating agriculture export subsidies given by developed countries.

The reference paper circulated by chairman of the WTO committee on agriculture (CoA) Crawford Falconer is being discussed by members for generating inputs for the draft modalities text scheduled to be prepared by the end of the week.

WTO director general Pascal Lamy has directed the committees on both agriculture and non-agriculture market access (Nama) to finalise the modalities for negotiations, including formula cuts for tariffs and subsidies, by the month-end.

While the WTO membership agreed on eliminating export subsidies by ‘13 at the ministerial meeting in Hong Kong in December ‘05, there was no agreement on how the elimination should be scheduled.

The G-20 said the chair should have included their proposals for the year-by-year reductions in export subsidies, along with their calls for a freeze on current spending and a ‘down payment’ (large initial cut) on the legally bound ceilings.

Less than $10bn of the $360bn annual subsidies given to farmers by the OECD (Organisation for Economic Cooperation and Development) countries is given in the form of export subsidies.

The G-20 wants that not only should a strict time-table be in place for eliminating export subsidies, there should also be a provision to ensure that no new subsidies are provided. The on-going Doha negotiations are scheduled to be wrapped up by the end of ‘06.