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December 19, 2005

World Trade Ministers Agree to Drop Ag Subsidies by 2013

HONG KONG, China, December 19, 2005 (ENS) - Ministers from the World Trade Organization’s 149 member governments approved a declaration that requires elimination of agricultural export subsidies by 2013, a date acceptable to the European Union (EU), which accounts for about 90 percent of such spending. The United States and developing countries had pressed for a 2010 deadline.

The declaration makes clear that the agreed date is conditional. Loopholes have to be plugged to avoid hidden export subsidies in credit, food aid and the sales of exporting state enterprises.

Despite the long hours and hard work, "it was worth it," World Trade Organization (WTO) Director-General Pascal Lamy told a press conference late Sunday evening at the Hong Kong Convention Center after a five day meeting. "We have managed to put the Round back on track after a period of hibernation."

"There has been a rebalancing in favor of developing countries, whose interests have now been placed at the heart of our negotiations as we provided for in 2001 when we launched this round," Lamy said.

World Trade Organization Director-General Pascal Lamy (left) and Hong Kong’s Secretary of Commerce, Industry and Technology John Tsang who chaired the conference, celebrate the ministerial agreement at the closing ceremony. (Photo courtesy WTO)
"And more importantly, we have built the political energy necessary to advance technically during 2006, and believe me, there will be plenty to do next year," said the director general. "We now have enough fuel in the tank to cruise at the right negotiating altitude now."
The Doha negotiations have stalled almost since they were launched in 2001, with an impasse over politically difficult agriculture issues blocking most other progress. The Doha round is scheduled to conclude by the end of 2006, a deadline for the United States, which has trade negotiating authority from Congress only until July 2007.

With the 44 page document now agreed, members face intense pressure in the new year to complete "full modalities" in agriculture and non-agricultural market access by the new deadline they have set themselves, April 30, 2006.

For cotton the elimination of export subsidies is accelerated to the end of 2006. In addition, cotton exports from least-developed countries will be allowed into developed countries without duty or quotas from the start of the period for implementing the new agriculture agreement.

Ministers have also agreed to aim to cut trade-distorting domestic subsidies on cotton by more than would normally apply under the new agreement, and to do so more quickly.

The declaration was agreed after several days of meetings late into the night, the last two continuing into the early hours of the morning.

Hong Kong’s Secretary of Commerce, Industry and Technology John Tsang who chaired the conference, said in the early hours this morning, "It’s been a hard day’s night. And I’ve been working like a dog," quoting John Lennon and Paul McCartney.

Tsang summed up the outcome, saying, "We have secured an end date for all export subsidies in agriculture, even if it is not in a form to everybody’s liking. We have an agreement on cotton. We have a very solid duty-free, quota-free access for the 32 least-developed country members. In agriculture and NAMA [non-agricultural market access], we have fleshed out a significant framework for full modalities."

"And in services, we now have an agreed text that points positively to the way forward," Tsang said.

U.S. Trade Representative Rob Portman said at a closing press conference just after midnight this morning, "After a needed rest, we need to immediately focus our energy and commitment on advancing the work that has begun here in Hong Kong."

"This conference made it clear that there is a consensus among countries rich and poor, North and South, large and small, that more open trade is the road to more prosperity," Portman said. "This is an important consensus because there are tough decisions to be made."

U.S. Trade Representative Rob Portman (Photo courtesy U.S. Embassy in Beijing)
On an issue especially important to West Africa, the declaration requires elimination of export subsidies on cotton in 2006. The U.S. delegation worked intensively with negotiators from Burkina Faso, Benin, Mali, Chad and Senegal, countries that had threatened to block any Doha agreement without satisfactory resolution of the cotton issue.
The declaration would provide for duty free, quota free access to cotton from the poorest least developed countries, but only once implementation starts on any final agreement reached in the Doha negotiations.

It states as an objective that any negotiated cuts in domestic support spending for cotton farmers in countries that have such programs would have to go deeper and be implemented faster than any other domestic agricultural subsidy cuts.

The U.S. Congress has been expected to repeal U.S. cotton export subsidies, possibly within days, to comply with an adverse WTO dispute settlement panel ruling.

"We all want to reduce subsidies and eventually eliminate subsides" in agricultural goods, Portman said. "That's our proposal, and the only question was whether we'd do it in the context of the agriculture negotiations or pull cotton out separately, and our view was the most effective way to get it done is to keep it with the rest of agriculture."

The declaration requires the provision of duty free and quota free market access for at least 97 percent of products from the 32 least developed countries "by 2008 or no later than the start of the implementation period" of any negotiated agreement.

The United States had pressed for exceptions to duty free, quota free status for specific products that already trade competitively on the global market.

Portman said at the press conference the United States has not decided which products it might exclude from duty free, quota free treatment, but he suggested that sugar is one possibility. Earlier in the week he suggested other possible exclusions, including certain competitive textile products from Bangladesh and Cambodia.

"I am happy that 2013 is in this paper as the phaseout date for export subsidies," said EU Agriculture Commissioner Mariann Fischer Boel on Sunday. "The rest of the text on the phaseout is not a Christmas gift for us. However, what matters is that we will define later what the word "substantial" means, in terms of how much we have to reduce export subsidies before 2013."

The European Union delegation emerges Sunday after all night negotiations. (Photo courtesy WTO)
"We will not accept that it is so high that it disrupts our markets and makes new reforms necessary," said Boel, who will oversee implementation of reforms to the EU Common Agricultural Policy in 2007.
EU Trade Commissioner Peter Mandelson said, "Today Europe has gone further in its existing commitment to eliminate its export subsidies by setting a clear end date in 2013. I said we came to Hong Kong to do business and this shows we meant it. We have demanded, and received, equivalent commitments from others for similar subsidy reform. This is a genuine advance for the agriculture negotiation and for the development goals of the Doha Round."

"Europe made it happen and we are pleased to have done so," Mandelson said. "We rejected the demand for a 2010 final date for what it is: a political gesture that would see Europe withdraw from global export markets faster than is economically sustainable. We have insisted on equal reform from others because effective reform means that all export subsidies are eliminated, not just Europe's. That is what can be achieved in a multilateral negotiation."

"In a week of disappointments this is no small prize. It is not enough to make this meeting a true success. But it is enough to save it from failure," said Mandelson.

In the informal heads of delegations meeting, almost all of ministers described the agreement as not fully meeting their expectations, but most urged fellow WTO members to accept it as a good basis for making progress in the negotiations.

Most delegations praised the "bottom-up" approach, under which inputs came directly from members rather than from above, as contributing to the success of the conference.

Many delegations welcomed the agreement on 2013 as deadline for eliminating of agriculture export subsidies although most of them said they would have preferred an earlier date. Some delegations commended the "statemanship" of the EU and the US in achieving agreement.

Many delegations thanked Hong Kong for providing excellent facilities, good organization and a secure environment for the negotiations. They said future Ministerial Conferences would find it difficult to top Hong Kong’s record.

Pain and Resistance in the Streets

In the streets of Hong Kong, all was not peaceful and secure. On Saturday, 70 people were injured and more than 500 arrested, when Hong Kong police interrupted a massive march organized by the Via Campesina, the international farmers' movement, to express its position with regard to the WTO agenda.

Most of the people arrested were South Korean farmers and activists.

About 180 protesters were released this morning, but Korean activists are still being held. The first bus of 150 Korean women who are released has left the courthouse. Some of the women say they and other detainees were brutalized by police and subjected to inhumane treatment.

Some 700 to 800 protesters, primarily Korean and Southeast Asian nationals, are still detained. Seventy-two imprisoned activists have declared a hunger strike inside the Kwuntong Jail.

Fifty activists and lawyers are visiting the more than 200 protesters who are still detained at the San Uk Ling Immigration Centre. Although more than 200 are inside, the names of only 40 are known.

Marchers display a banner made by the La Via Campesina delegation, Korean Women Peasant Association, KWPA and Korean Peasant League, and KPL with migrant workers. (Photo courtesy Via Campesina)
The protesters said that during their march on Saturday thousands of troops violently repressed them and surrounded the group of farmers who had managed to arrive at the entrance of the Convention Center where the WTO Ministerial Meeting was taking place.
Hong Kong’s Chief Executive Donald Tsang blamed the demonstrators who he said had resorted to violence. "We are a tolerant society," Tsang said, "but we cannot and will not tolerate violence as a means to advance the agenda of any group."

Tsang commended the Hong Kong Police for "its measured and appropriate response to the violence created by some protesters."

But Josie Riffaud of Via Campesina's International Coordinating Committee said, "The farmer movement, which is not part of the spheres of the WTO nor is consulted by it, has no other means of making its voice heard and expressing its desperation, at the imminent extermination of its way of life, that is resulting from decisions taken in meetings like this one."

As part of the Peoples' Camp on Food Sovereignty events in Hong Kong, the 1st International Rural Peoples Tribunal was held to protest the WTO Ministerial Conference. Witnesses at the Tribunal accused the World Trade Organization of mass deaths, destruction of natural resources, destruction of the agriculture of developing countries, causing dislocation, hunger and poverty, trampling on workers' and women's rights, and undermining food sovereignty.

Union leader P. Chennaiah spoke for the Coalition of Agricultural Workers International representing agricultural workers, peasants, small farmers, dalits and fisherfolk. He told the tribunal that Indian farmers are committing suicide by the thousands because of the adverse effects on their agriculture and livelihoods brought about by the globalization policies implemented in India.

High yield variety crops, and genetically modified plants and organisms which carry with them high production costs, and pose dangers to health, are being introduced to the detriment of the whole population, especially the peasantry, Chennaiah said.

Korean activists jump into the sea near the Convention Center to demonstrate the seriousness of their plight. (Photo courtesy Via Campesina)
He said the peasants, landless laborers, women, and especially the Dalits, or outcasts, who resist these policies are routinely subjected to harassment.
Witnesses said the WTO has made the peasant families lose their farmland, after which they must work abroad as migrant laborers.

Witnesses included Shanti, a member of the Dalit Women’s Forum in South India, who told the tribunal how women farmers have been forced to shift from planting food crops to export crops such as flowers, because of WTO related policies. Flower cultivation exposes them to high amounts of chemical pesticides, placing them in danger from poisonings, ill health and death.

The tribunal, organized by the Asian Peasant Coalition and the Peasant Movement of the Philippines, ended with a march in downtown Hong Kong leading to the HK Convention Center where the WTO meeting was in its third day.

The farmers then symbolically crushed the WTO and U.S. imperialist domination by kicking, pushing down, and poking at a mascot of U.S. President George Bush with flagsticks. Pesticide Action Network Asia-Pacific Executive Director Sarojeni Rengam, one of the tribunal’s prosecutors, led the program in the protest action held at Victoria Bay in front of the Convention Center, together with peasant, worker and women leaders from the Philippines, India, Malaysia and other countries. The event ended with the burning of the U.S. flag.

On Thursday, a group of Korean farmers performed a full-body bow every three steps, bowing the distance from Victoria Park to outside the Convention Centre, in the hope that their need for fair treatment would be recognized. Their action brought some onlookers to tears.

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