EU/US Proposal On WTO A Step Backwards

For Immediate Release
18 August 2003

EU/US Proposal On WTO A Step Backwards, Says Fonterra

The draft text on agriculture announced by the EU and US as part of the continuing WTO negotiations is a major step backwards for the WTO Doha Round, according to Fonterra Chairman Henry van der Heyden.

"We are disappointed and concerned at the direction the talks have taken", said Mr van der Heyden.

"The good news is that the major players - the US and EU - are finally engaging in real discussion. But there is a real risk that in playing to their own priorities they leave the rest of the world out in the cold.

"We cannot forget that the EU in particular accounts for the overwhelming bulk of export subsidies - which is the single largest distorting element in of world dairy trade, causing harm to developing and developed dairy producers," said Mr van der Heyden.

"It is impossible to meet the agreed Doha goal of substantive reform of world trade without agreeing - whatever the final date may be - on the elimination of export subsidies.

"But rather than proposing how to reach this goal, the text agreed between the US and EU steps back from the Doha commitment. It proposes elimination of export subsidies only for undefined products of particular interest to developing countries. For all remaining products the aim is simply reduction in export subsidies, with no commitment to either figures or a timeframe.

"On the other key issue of market access, the paper is vague, complex and hedged about with exceptions - to the point where it is hard to assess what if anything it means."

Mr van der Heyden emphasised that for any agreement to succeed it will need to meet the interests of all participants in the Round - including the Cairns Group and developing countries - not just the two primary subsidisers.

"I worry that the rest of us are standing around watching while the US and EU stitch up a deal that suits them. The deal on the table right now is simply not good enough."

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