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Developing Countries Take
Early Initiative

By C. Rammanohar Reddy

The Hindu,
11 September, 2003

CANCUN SEPT. 10. On the eve of the formal opening of the World Trade Organisation's ministerial conference, a 20-member coalition of developing countries led by India, Brazil, China, South Africa and Argentina, has taken centre stage with its distinctive proposals for reform of global trade in agriculture.

Well before the negotiations begin here on breaking the deadlock on agriculture in the Doha round of trade talks, the coalition took the unusual step yesterday of issuing a ministerial communiqué in which it called for "a substantial contribution" from the developed countries (the European Union and the United States) towards the reduction of agricultural subsidies since it is these countries which are "fundamentally responsible" for global distortions in global production and trade.

At a press conference on Tuesday evening, where the Trade and Commerce Ministers from the five major members and one small country, Costa Rica, were present, the coalition said that its proposals offered the WTO a chance to show that it really cared about the developing countries. Arun Jaitley, the Union Commerce Minister, described the formation of the group as "a historic moment" in the WTO.

It is apparent that the alliance, formed last month in an angry reaction to the E.U.-U.S. proposals that would keep their subsidies largely in tact, has taken the early initiative in setting the agenda for negotiations at Cancun. What has attracted attention is that unlike many defensive demands by the developing countries, the coalition's proposals on agriculture call for reform but it would be a reform in which the rich countries bear the larger burden, and one in which there is a differentiated responsibility among the developing countries. It is also clear that the coalition, by spreading its support across Asia, Africa and South America and by including countries with varying interests in agriculture, is seeking to minimise the possibility of the E.U. and the U.S. breaking the alliance, as usually happens in the tense final hours of WTO conferences.

On Tuesday, the coalition announced that its membership had increased to 21 with Egypt, a large importer of food, deciding to join the alliance.

Other countries at the WTO are sitting up and taking notice of the coalition. Rich country members of the Cairns group of agricultural exporters, such as Australia and New Zealand, not usually known for their sensitivity towards the developing countries, called the emergence of the group "a striking development" in the talks on agriculture. The E.U. and the U.S. are naturally dismissive. Pascal Lamy, the European Commissioner for Trade, cast doubts on the future of "a marriage" between farm exporters like South Africa and countries like India which have an interest in protecting domestic agriculture. Robert Zoellick, the U.S. Trade Representative, at a press conference later in the day, chose to describe the developing country proposals as "one of many" that have been made on farm subsidies.

But the E.U. and the U.S., aware that they have made all developing countries angry, are following different strategies to recover lost ground. A first response has come from the U.S. on cotton. Poor countries such as Chad, Mali, Burkina Faso and Benin, for whom cotton is the main source of export income, have been complaining that annual subsidies of more than $3 billion to U.S. cotton farmers are pushing down international prices and destroying domestic agriculture.

The U.S. now says that the solution lies in an integrated overhaul of trade in cotton, man-made fibres and textiles so that global demand and prices are propped up to the benefit of West Africa. Such an approach would, of course, divert attention from the scale of U.S. cotton subsidies.