EU-US relations set to stifle world trade talks

Date: 10/04/03

By David Cronin

TRANSATLANTIC divisions on agriculture could have major repercussions for the success of the Doha round of world trade talks, a senior economist has warned.

A World Trade Organization (WTO) plan to secure an outline agreement on liberalising markets in farm produce by 31 March was derailed, largely due to entrenched differences between the European Union and the United States over subsidies.

Uri Dadush, director of the World Bank's development prospects group, said he was "worried not so much because a deadline has been missed" but because America and the EU are "apart on very difficult issues".

"The gaps are huge and the hard give-and-take has hardly started," he told European Voice.

Washington-based Dadush was speaking in Brussels at the launch of a new World Bank report on the financing of development.

It concluded that a robust economic performance by China stimulated a growth rate of 6.7% for the whole East Asia region in 2002 but economies in Latin America and the Caribbean suffered major setbacks due to the banking collapse in Argentina and turbulence in Venezuela.

The report states that growth "languished" in much of Africa and the Middle East last year, while world trade "grew by a meagre 3%".

Dadush also backed criticisms voiced by Romano Prodi about the budget which the Bush administration is proposing for the war in Iraq.

The European Commission president has pointed out that the €70 billion which the White House wants Congress to release for its war chest is some €20 billion more than the rich world spends on development aid for poor countries per annum.

"Budgetary priorities are very difficult to appreciate from a development perspective," said Dadush.

Meanwhile, the European Parliament is due to call today (10 April) for EU funding to help coffee growers in poor countries cushion the blow from recent falls in commodity prices (for example, the amount being paid for imports of robusta coffee in New York are the lowest in relative terms for 100 years).

A resolution tabled by a cross-party group of MEPs urges that part of an estimated €11 billion allocated to the European Development Fund, which remained unspent at the end of last year, should be used for that purpose.

The World Bank and the International Coffee Organization are due to host an international conference on falling prices in London on 19 May.

"The EU has a critical voice in the global debate about commodities and in particular the crisis facing more than 50 coffee dependent countries," said Jo Leadbeater, head of EU advocacy with relief agency Oxfam.

"The 25 million families who are bearing the brunt of this crisis are counting on the EU to use its political clout and leadership to formulate new solutions and set an agenda for global action."

Transatlantic divisions on agriculture could have major repercussions for the success of the Doha round of world trade talks, a senior economist has warned.