WTO Breaks Agriculture Log-Jam

by Ulrika Lomas, for LawAndTax-News.com, Brussels

10 May 2005

It was a good week for the WTO, with ministers reaching a compromise on calculating agricultural tariffs in Paris, and Pascal Lamy (ex EU Trade Commissioner) emerging as the favoured candidate to be next head of the Organisation.

The EU Commission welcomed the tariffs agreement as a significant breakthrough, since the issue had been blocking the Doha Round of WTO talks. "I am very pleased with this result," said EU trade commissioner Peter Mandelson. "Although it still has to be formally confirmed in Geneva, our proposal has now been accepted by the countries who have the greatest stake in the agriculture negotiations," he added.

"I am delighted that our initiative was able to unblock what had become a very sensitive debate," said EU agriculture commissioner Marian Fischer Boel.

The US, the EU, Brazil, Australia and India all agreed on the deal, along with the 18 other nations present including Switzerland and Japan. The deal will need to be approved by all 148 WTO member states.

Mandelson said that it should now be possible to make rapid and substantial progress on the Doha Round, which covers a broad range of areas including services and manufactured goods. The hold-up on agriculture had caused many to doubt whether the Doha Round could be successful.

The dispute had revolved around rules for the conversion of flat-rate duties, often expressed in euros per ton of imported goods, into percentage tariffs based on the value of goods. EU negotiators had sought to keep the percentages low for critical, sensitive farm products; guidelines already agreed upon will subject higher tariffs to bigger cuts.

In a parallel development, Pascal Lamy, long-time EU front-man in a series of prickly trade disputes between the EU, the US and other nations, was said to be gaining general support as next head of the WTO. Last time around, the body was unable to agree on a single leader, and the six year term was split between current D-G Dr. Supachai Panitchpakdi, and New Zealand's Mike Moore. It is widely thought that this has disadvantaged the WTO, which works on long timescales. While Mike Moore was powerful and effective, Supachai Panitchpakdi has been less of a force in the world. Pascal Lamy will have great credibility and no-one could have more relevant experience.

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