latest Dec18 2005

It was apparent by 1980 that the systems of support which the EU and the United States had established to stabilise their agricultural industries were bound to produce excess output which might initially serve as aid to developing countries but which would soon start to destroy existing producers in the 3rd World and prevent other countries from competing.

After years of failure to reach any agreement, the WTO has at last come up with an accord intended to help the world's poorest countries. Key export subsidies are to be removed, domestic subsidies that distort the market are to be phased out.

However, as usual, the United States is taking a position that differs from Europe. The EU's reform programme is slowly transforming subsidies for the production of commodities into subsidies to protect the environment, food security, rural development and animal welfare. This entails promoting quality over quantity, a process which will automatically reduce exports that dump on the developing countries. The US is heading in the opposite direction.

It seems that the the Bush administration is unwilling to take any action that does not favour its ability to trade through economy of scale, being the biggest currency block and the most efficient large land manager. Similarly, the US approach to Kyoto seems to be "Keep the US rich and on top, when push comes to shove we will solve the global warming problem by technology anyway, even if it comes to sucking the greenhouse gases back out of the atmosphere, and we will develop the technology and save the world, so stop beefing. Nobody else is going to take the responsibility, least of all those Europeans who will not even enforce UN resolutions they have passed, so cut the hypocrisy please. The whole world is going to cause the problem, the US will be the nation to solve it if it is solvable".

All this would not get up people's noses so much if the administration gave some indication that it actually understood what it was doing and possessed some adequate verbal diplomatic skills. It's not enough to be intelligent as the world's leading nation, you have to be seen to be intelligent. Their reply would no doubt be "Talk is cheap". However, in my view, it is not necessary to appear quite so out of touch and incompetent as the Bush family, or to appear to do the right things for the wrong reasons and the wrong things for the right reasons.

[ For instance: the latest security flap concerning the institutions and buildings targetted by Al-qaida is not to be laughed at just because the computer files they now have access to were started in the year 2000. Plans go back further than that, and execution usually comes after years of planning. Furthermore, with the current freedom of information regime in the US, they were obliged to reveal that they now had hard and detailed evidence of such plans and to show some (though obviously not all) of the measures taken to counter them. On the other hand, the way it has been handled makes it look as if they were unaware of the probability of such plans until they actually found them. What we seem to be looking at here, as has already been pointed out by the Congressional Committee examining the intelligence failures relating to the whole Iraq operation, is a massive failure of imagination. The US administration seems to be unable to imagine the world through other eyes, and it reflects a large part of American culture in this respect. ]

DECEMBER 15 2005
I have written nothing here since August 2004 because the efforts of those concerned have not merited comment. Peter Mandleson has steered the best course he could given the behaviour of all the Europeans, the Americans, Chinese, Indians and others he has had to deal with. He has represented Europe as well as he could. He dealt with the Chinese import problem in stages which looked messy but could not have been handled differently. Now, as we wait for some results from the Hong Kong meeting on World Trade and those in Hong Kong have their eyes on Brussels to see if the EU budget negotiations presage further reform of the Commaon Agricultural Policy, it is evident that globalisation has brought up problems that one day will be solved only by the arbitration of a 'world government'. At the moment we don't have that, so the economic stresses will be resolved in the same way the planet solves its geological stresses - by occasional local earthquakes, after which emergency action is taken.

WTO talks stagger on after protests, deal elusive

  Saturday December 17, 09:22 PM

HONG KONG (Reuters) - Bleary-eyed negotiators on Sunday struggled to end feuding and keep a global trade deal alive as riot police rounded up the last of hundreds of anti-globalisation protesters after violent clashes.

As talks among the World Trade Organisation's (WTO) nearly 150 members staggered into a sixth and final day, diplomats said the European Union looked ready to accept a date for ending farm export subsidies, a key developing country demand.

But it was uncertain this would be enough to overcome deep divisions that stretch from how quickly the United States will dismantle cotton subsidies that African producers say are ruining them to special measures to help the WTO's poorest states.

"The problems we have faced all week continue, in agriculture, industrial goods, cotton," said WTO spokesman Keith Rockwell during last ditch talks that began late on Saturday.

Without a deal in Hong Kong, the free trade round could collapse, plunging even the future of the world trade body into doubt.

On Saturday, Hong Kong police fought running street battles and fired volleys of tear gas to repel hundreds of mainly South Korean protesters trying to force their way into the convention centre where the trade ministers were meeting.

The South Koreans, mainly farmers who say the WTO is driving them out of business, staged a final sit-down protest before police moved in and arrested them.

Eighty-two people were injured in the fighting, including 12 police officers, the government said. It was the worst violence in Hong Kong since protests following China's bloody crackdown on democracy protesters in Tiananmen Square in Beijing in 1989.

But the fighting was less intense than the "Battle of Seattle" in 1999 when protesters succeeded in delaying the start of a WTO ministerial conference that had initially been intended to launch a new round of trade negotiations.

The current round was finally started in Doha in late 2001 in a bid to calm a jittery world economy after the September 11 attacks on New York and Washington.


Inside the harbour-side convention centre, negotiators were wrangling over a draft text put together by WTO chief Pascal Lamy and conference chairman John Tsang, Hong Kong's commerce secretary.

Trade diplomats said the EU would agree to eliminate farm export subsidies in 2013, five years after any new trade treaty would take effect, but only if developing countries showed more willingness to open industrial goods' and services' markets.

Those subsidies are currently worth about 2.7 billion euros a year, a small part of the EU's annual spending of more than 40 billion euros ($47.9 billion) on agriculture.

Ending the payouts in 2013 would coincide with the end of the current budget period for the EU's Common Agricultural Policy, potentially making it easier for the cuts to be made.

The Doha round was sold to developing countries as a way to speed their economic growth.

But a plan to give poor nations free access to the markets of the world's biggest economies has run into problems because the United States is worried about textile imports from fast-growing Bangladesh and Cambodia in the programme.

A senior U.S. lawmaker warned the draft WTO text would not pass Congress in its current form because it did not break the impasse on agriculture and requires more concessions from rich countries, with few new commitments from the developing world.

"I seriously doubt that any agreement with this imbalance will be acceptable to the U.S. Congress," Senate Finance Committee Chairman Charles Grassley, whose committee has jurisdiction over trade legislation, said in a statement in Washington.

But poorer states have also warned that they could block any deal if their demands on duty-free access are not met.

"LDCs have reached a tipping point ... Let me confirm that it is easy to walk away from something that will leave us no better off than we were before," Zambian Trade Minister Dipak Patel said.

($1=.8355 Euro)

(Additional reporting by Doug Palmer)

AND ON SUNDAY THEY WRAP IT UP. Although critics will say it is disappointing it is very important to understand that these negotiations are fundamental to avoiding the conflicts that have marked the 20th century. The EU is reforming its Common Agricultural Policy, continually, internally and nationally. The funding of agriculture is being moved from encouraging surplus production to sustaining the environment. A date now has been set for the general reduction of subsidies (2013) by the developed countries. There are great complications due to the emergence of China in various areas of trade and these things cannot be solved overnight. Wider negotiations will have to be undertaken and this agreement also points the way to how these can be managed in all areas of trade and services. That this meeting has been held and completed in a civil atmosphere of understanding is itself a considerable success. If you doubt that, read more history. We were dealing here with 149 nations, each of which had a chance to be heard. Gobalization is a process akin to procreation and not without pain. The aim is to manage this through negotiation and cooperation. So, what we call the DOHA ROUND continues, but I do think the US could moderate its (evident) private opinion that since, without its support the international community would fall apart, it should dictate the pace of change.

Sunday December 18, 02:29 PM

HONG KONG (Reuters) - The World Trade Organisation's member states approved a modest package of market-opening steps on Sunday, keeping alive the long-running Doha Round of talks to free global commerce.

"It is so agreed," said Hong Kong Trade Secretary John Tsang as, with the rap of his gavel, he confirmed acceptance by all 149 members of a declaration hammered out after six days of fractious talks.

The agreement sets an end-date of 2013 for farm export subsidies, offers export help to the world's poorest countries and brings some relief to struggling African cotton producers.