G-20 tells rich nations to cut farm subsidy
The powerful G-20 group of developing countries such as India, China and Brazil has stepped up pressure on developed nations like the US to substantially reduce their billions of dollars worth of trade-distorting farm subsidies and make steep duty...
By Amiti Sen, ET Bureau |
GENEVA: The powerful G-20 group of developing countries such as India, China and Brazil has stepped up pressure on developed nations like the US to substantially reduce their billions of dollars worth of trade-distorting farm subsidies and make steep duty cuts in products with high tariffs.
Belying reports about some members such as Brazil breaking away from the group, the G-20 ���re-affirmed��� its unity in a communiqu�� at the WTO mini-ministerial here. It said the group remains firmly committed to a result that lives up to the Doha mandate, in particular the common goal of eliminating trade-distorting policies of the developed countries.
The solidarity of the G-20, which represents countries with both aggressive and defensive interests in agriculture, is important as developing countries not only have to fight for protecting vulnerable farm products, but also ensure that developed countries do not get special ���carve-outs��� to continue with their high subsidies and tariffs on certain products.
In the area of improved market access for farm products, the G-20 said the minimum average cut of 54% in tariffs must be respected in line with its proposal. To ensure that developed countries are not allowed to maintain abnormally high tariffs, the group stressed tariff capping must be effective and apply for both sensitive and non-sensitive items.
The developed countries, however, are unwilling to place caps on farm tariffs, despite the fact they are pushing for caps on industrial tariffs.
Tariff simplification is a must, the G-20 said, and all farm tariffs should be converted into ad valorem (tariffs based on the value of the product). Rich nations have been resisting full conversion to ad valorem as they want to retain a large number of specific, compound, mixed and complex tariffs to provide another layer of protection, an official source said.
The group called for effective cuts in the overall trade-distorting domestic support, taking into account the change in the pattern of world prices and its impact on current level of domestic support. Targeting highly-subsidised products like cotton ��� where the US gives $3.4 billion of annual subsidies to just 25,000 farmers, the G-20 said there has to be effective product-specific disciplines to avoid concentration of expenditure.
Belying reports about some members such as Brazil breaking away from the group, the G-20 ���re-affirmed��� its unity in a communiqu�� at the WTO mini-ministerial here. It said the group remains firmly committed to a result that lives up to the Doha mandate, in particular the common goal of eliminating trade-distorting policies of the developed countries.
The solidarity of the G-20, which represents countries with both aggressive and defensive interests in agriculture, is important as developing countries not only have to fight for protecting vulnerable farm products, but also ensure that developed countries do not get special ���carve-outs��� to continue with their high subsidies and tariffs on certain products.
In the area of improved market access for farm products, the G-20 said the minimum average cut of 54% in tariffs must be respected in line with its proposal. To ensure that developed countries are not allowed to maintain abnormally high tariffs, the group stressed tariff capping must be effective and apply for both sensitive and non-sensitive items.
The developed countries, however, are unwilling to place caps on farm tariffs, despite the fact they are pushing for caps on industrial tariffs.
Tariff simplification is a must, the G-20 said, and all farm tariffs should be converted into ad valorem (tariffs based on the value of the product). Rich nations have been resisting full conversion to ad valorem as they want to retain a large number of specific, compound, mixed and complex tariffs to provide another layer of protection, an official source said.
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The group called for effective cuts in the overall trade-distorting domestic support, taking into account the change in the pattern of world prices and its impact on current level of domestic support. Targeting highly-subsidised products like cotton ��� where the US gives $3.4 billion of annual subsidies to just 25,000 farmers, the G-20 said there has to be effective product-specific disciplines to avoid concentration of expenditure.
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