WTO Doha Round Struggling Over Agricultural Tariffs

by Mary Swire, Tax-News.com, Hong Kong

19 February 2003

It's become clear that the 'Doha' round of WTO negotiations is in danger of being wrecked on agricultural rocks, and the ministers' meeting which took place in Tokyo last weekend doesn't seem to have done much to improve the situation.

Stuart Harbinson, chairman of the WTO farm negotiations, had proposed a package including tariff reductions of an average 60% over five years, cuts in agricultural subsidies and increased import quotas.

22 of the WTO's 145 nations were represented at the 3-day talks, but failed to reach anything resembling an agreement. "There are very deep differences represented on this table," US Trade Representative Robert Zoellick said after the meetings. The talks' Chairman, Japanese Foreign Minister Yoriko Kawaguchi, attempted to put a positive gloss on the event: "We came to clearer perceptions regarding issues to be discussed," she said. "Harbinson's paper served as a catalyst. Everyone's positions became crystallized."

EU officials said Harbinson's paper was just a first draft. "It was there to provoke reaction and it did provoke reaction," said EU Trade Commissioner Pascal Lamy.

Faced with a September deadline in Cancun, Mexico, the Doha process seems to be facing heavy odds. The United States has proposed a 25% cap on agricultural tariffs for developed nations, although the Bush administration's imposition of additional farm and steel tariffs last year has weakened its credibility. For the US, the Harbinson proposals don't go far enough; but for the EU, Japan and India, all with substantial agricultural subsidies or tariffs (nearly 500% in the case of Japanese rice), they go too far.

Zoellick criticized Japanese officials for their caution when the nation had much to gain from opening markets as an exporter of manufactured goods. "They are sacrificing Japan's strengths on the altar of rice," he said.

It's a peculiarity of agricultural protectionism, which owes its origins to a straightforward political calculation, that at least in the EU and the US, farmers now make up only a minute proportion of voters. It's easier to understand countries like India and China, which have substantial numbers of subsistence farmers. But what can induce Japan or Germany, both highly industrialised countries with absolutely no economic need to protect their agricultural production, to sabotage the entire WTO process, so crucial to the development of poorer countries, for the sake of a few grains of carbohydrate? Is it that politicians are economically illiterate? Or do they just not care?

Recommended