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A Promise Not Kept
Cotton is harvested on a farm in Alexandria, La. Cotton production is heavily subsidized in the United States.
(By Julie Bennett -- Associated Press)
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In a show of resolve, Schwab joined congressional leaders at a news conference this week to show that there is little, if any, room for compromise in the U.S. position.
"What have we seen in response to [the U.S.] proposal?" said Sen. Saxby Chambliss (R-Ga.), chairman of the Senate Agriculture Committee. "A very weak, very unmeaningful and uncomprehensive proposal, frankly, coming out of the European Union." The E.U. proposal would cut average farm tariffs considerably less than would Washington's, and it would keep many "sensitive" products such as beef, dairy and poultry sheltered from foreign competition.
Other WTO members accuse Washington of playing numbers games, arguing that although the U.S. proposal to cut subsidies would lower the theoretical legal ceiling, it would allow an increase in the actual level of spending. The anti-poverty group Oxfam said the United States could increase farm subsidies to $22.7 billion, from $19.7 billion in 2005, under the U.S. proposal.
The Europeans reject assertions that they are coddling their farmers at the expense of the world's poor. They note that a number of recent studies have indicated that the benefits of freer farm trade may not be all that great for many impoverished countries.
"You only have to look at who is pressing hardest for farm tariff cuts to work out who will benefit most," Mandelson said in a June 23 speech. "It is not the poor countries of Africa, the Caribbean and the Pacific; it is the large agriculture exporters of the United States, Australia, and Brazil."
Still, Mandelson said that Europe would accept sharper cuts in farm tariffs if big developing countries offer a concession eagerly sought by European companies: a substantial reduction in duties on manufactured goods. The biggest developing nations, including Brazil, India and China, have banded together in a group called the G-20.
"There is a three-way bargain here," Mandelson said. "The G-20 wants steeper cuts in U.S. farm subsidies before it is willing to table the required cuts in industrial goods. Washington can unlock this by stepping forward with a better offer. If this happens the E.U. will, at the same time, meet them both with a strengthened offer."
The view of the least-developed countries was plaintively stated by Love Mtesa, Zambia's ambassador to the WTO. "We are saying, both these giants need to move a step further," he said.
There's wide agreement that a collapse of the Doha negotiations could inflict serious damage on the WTO. It would almost certainly accelerate the trend toward two-country and regional trade deals such as the North American Free Trade Agreement and the U.S.-Central America Free Trade Agreement, and it could undermine the credibility of the WTO's tribunals in settling trade disputes. The upshot, some fear, would be that small, weak countries would be even more subject to bullying than they already are.
"If the round fails, it will be a disaster for developing countries," Mtesa said.
