February 14, 2003

For Immediate Release:

Contact: Sophia Murphy, 612-203-5648, smurphy@iatp.org

Shefali Sharma, in Geneva, 41 22 789 0724, ssharma@iatp.org

Minneapolis/Geneva - In a blow to developing countries and farmers around the world, the new draft World Trade Organization (WTO) agriculture trade rules totally ignore a number of proposals designed to protect farmers from unfair trade practices, according to the Institute for Agriculture and Trade Policy (IATP). The new text, drafted by WTO staff Stuart Harbinson, was distributed to WTO member governments prior to a Mini Ministerial gathering in Tokyo beginning today - designed to spark negotiations.

The Harbinson text does not contain any of the main proposals advanced by developing countries to address agricultural dumping - the export of farm products at prices below the cost of production. Agricultural dumping is the single most damaging trade practice for developing countries - destroying livelihoods, and increasing food insecurity. Export dumping also hurts U.S. farmers by lowering market prices on nearly all crops.

"This is not an acceptable framework for multilateral trade rules for agriculture," said IATP's Trade Program Director Sophia Murphy. "To reach agreement, the Harbinson text has made dramatic compromises from among radically different positions - trying to keep the EU and U.S. happy. Measures to either address the causes of dumping or, at a minimum, to protect developing countries from the problem have been dropped altogether."

The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

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Export Subsidies: The proposals on export subsidies are much stronger than the European Union was expecting, or is likely to accept. The proposal is to eliminate them altogether over ten years. There are very strong proposals to tighten food aid use, which if accepted would force significant reform of the much criticized use of food aid as a tool to dump unwanted commodity stocks at the expense of producers in the poorest countries - a practice the U.S. is often accused of. However, developing countries had made proposals to give themselves some protection against the continued use of subsidies for the next decade – arguing that until subsidies are eliminated, they should be able to use tariffs to keep out the unfair competition. None of these survived into the current draft rules.

Tariffs: The proposals on tariffs go to the heart of where there is common ground between the US and the European Union: getting access to developing country markets. The proposals are dramatic, with no exceptions (although some lighter cuts) even for crops judged to be critical for livelihoods and food security in the world’s poorest countries. Developing countries had made strong proposals along two lines, related to tariffs. One was to insist that market access should only be granted for products that were sold without subsidy at prices that reflected production costs. Second, was to request some further protection where development needs made the liberalization of a given agricultural sector too risky for domestic social or economic reasons. Neither of these concerns is reflected in the proposals put out this week by Chairman Harbinson.

Food Security: In the midst of trade negotiations sold to the world as the Doha Development Round, the lack of substance behind the proposed rules to accommodate developing countries’ food security needs is shocking. Developing countries are allowed to list crops as important for food security and livelihood reasons, and to limit the tariff cuts that need to be made on those crops. This is expected to be a grueling negotiating process where countries will have to fight for the number of crops they are allowed for exemptions. Meanwhile, the other proposed provisions will require budgetary outlays from countries who lack the resources to put domestic support programs into place. A broader understanding of the contribution that agriculture makes to development is entirely missing.

The draft Agriculture text comes after a year of little progress at the WTO on a number of negotiations important to developing countries. The lack of progress on critical development issues such as the treaty covering intellectual property (TRIPs), Health, Special and Differential Treatment and grievances of imbalances in existing agreements continue to dismay developing countries.

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