New Zealand needs to change tack on Doha trade talks

The breakdown of trade talks between India, Brazil, the EU and US was a result of a non-transparent and exclusive process and the failure of the richest countries to table offers that would give reality to the notion of this being a “Development Round” of trade talks, said international agency Oxfam today.

The EU and US have attempted to blame Brazil and India for the breakdown in negotiations between the group of four major trading powers (EU, US, Brazil and India). However, this is disingenuous, given the rich countries’ refusal to sufficiently reduce their harmful agricultural subsidies, cut restrictive import tariffs, or guarantee developing countries the necessary flexibility to promote rural livelihoods, food security and industrial development, said Oxfam.

Barry Coates, Executive Director of Oxfam New Zealand said: “The EU and US have been offering minimal concessions on agriculture, while demanding drastic cuts in the tariff ceilings for industrial goods in the economies of developing countries. It is to their credit that Brazil and India withstood the pressure and did not retreat from their agreed positions or turn their back on other developing countries.”

Oxfam said it was wrong to see the breakdown of the G4 meeting as a collapse of the trade talks overall. It should signal an overdue return to the multilateral process in Geneva, with all members involved in negotiations, greater transparency and a focus on content rather than deadlines. Finger pointing at Brazil and India overlooked the fact that there are more than 100 members of the WTO who were not involved but who also had concerns.

Coates: “A development deal will only be done when the major trading powers – namely the EU and US – decide they are serious about making the rules of trade fairer to the developing world. Up until now they have allowed short-term self-interest to rule the day.”

Responding to press reports suggesting that the US might be willing to cap its trade-distorting domestic farm support at US$17 billion (NZ$22.2 billion) Oxfam said this was not enough, as it would require no real reduction in current spending. This would allow the US to increase its subsidies from the level of US$11 billion (NZ$14.4 billion) estimated for last year.

Similarly, the reported EU offer to halve tariffs on some products would be far less meaningful than it sounds if sensitive products, where developing countries stand to gain, remain heavily protected and other trade barriers are not dealt with.

The breakdown of these talks were not just about agriculture but also the linkage to industrial market access.

Coates: “New Zealand has been backing the current EU and US proposals, which would mean developing countries make much greater sacrifices – cutting their tariffs by up to 70% while rich countries cut by only 20-30%. This would be a hypocritical imposition that would severely impede future industrial development in the developing world. The most serious impacts of these demands would fall on the smaller and poorer nations that are not Least Developed Countries, like Pacific neighbours Tonga, Fiji and Papua New Guinea.

“New Zealand’s primary aim should be to get a multilateral deal that meets the primary aim of the Doha Development Round – to reform the deeply unfair agriculture systems in the richest countries. New Zealand should not be siding with the EU and US against developing countries by demanding deep cuts in their tariffs,” said Coates.

“Under current proposals the US would not even be required to cut current subsidy spending, and dumping would continue unabated. Meanwhile, poor countries who could gain significantly from greater opportunities to export to Europe would see the door remain closed for products where they have a competitive advantage. New Zealand exporters are also disadvantaged by these unfair rules. These are the reforms that the New Zealand trade officials should be seeking,” he added.

Coates: “Failure to get a multilateral deal would mean that New Zealand loses the opportunity to reform harmful agriculture policies used by the rich countries. This can only be achieved through an agreement in the WTO, not through the current ‘spaghetti bowl’ of bilateral and regional trade deals. New Zealand should not throw away this opportunity through misguided trade officials preaching the supposed doctrine of free trade to the poor countries.”

“However, a deal that simply bent to accommodate the political realities of the most powerful countries, without delivering meaningful reform, would be a disaster that could leave some of the poorest countries and most vulnerable people worse off.”

Article type: 
Press release