jseal
08-01-2004, 02:05 PM
The World Trade Organization (WTO) has negotiated a compromise between rich and poor countries. This resurrects the "Doha round" of trade negotiations, which failed because rich and poor countries could not reach agreement on agriculture.
Last year, in Cancun, Mexico, a group of poor countries refused to sign a proposed agreement which they felt favored the richer nations. The poor countries accused the rich nations of subsidizing their farmers, who then exported their produce at below market prices. Europe's Common Agricultural Policy (which consumes almost half the EU's annual budget) was the principle culprit, but American subsidies, particularly to its cotton producers, received heavy criticism in Cancun.
In Geneva, the WTO negotiated cuts to the export subsidies wealthy countries give their farmers. The US, the EU, Brazil and Japan, agreed to eliminate export subsidies in the near future, to limit other subsidies and to lower tariffs. In return, import barriers in poorer nations will be reduced for industrial goods.
As there is a presidential election in November, failure to get an agreement now could have left negotiations in limbo for at least a year. It is important that any new agreement be complete before 2007, when the current fast-track legislation expires.
A final deal could add $520 billion to the world economy by 2015, if both rich and poor countries reduce their trade barriers. While all the countries which participate would benefit, most of the benefit would go to poorer countries.
Last year, in Cancun, Mexico, a group of poor countries refused to sign a proposed agreement which they felt favored the richer nations. The poor countries accused the rich nations of subsidizing their farmers, who then exported their produce at below market prices. Europe's Common Agricultural Policy (which consumes almost half the EU's annual budget) was the principle culprit, but American subsidies, particularly to its cotton producers, received heavy criticism in Cancun.
In Geneva, the WTO negotiated cuts to the export subsidies wealthy countries give their farmers. The US, the EU, Brazil and Japan, agreed to eliminate export subsidies in the near future, to limit other subsidies and to lower tariffs. In return, import barriers in poorer nations will be reduced for industrial goods.
As there is a presidential election in November, failure to get an agreement now could have left negotiations in limbo for at least a year. It is important that any new agreement be complete before 2007, when the current fast-track legislation expires.
A final deal could add $520 billion to the world economy by 2015, if both rich and poor countries reduce their trade barriers. While all the countries which participate would benefit, most of the benefit would go to poorer countries.