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WTO Prepares for Meeting In Cancun

posted on September 5, 2003

Farm subsidies will be at the core of Word Trade Organization talks in Cancun, Mexico, next week. But there will be no shortage of agendas. The U.S. says it will seek more sales opportunities for its farm goods. Britain's trade minister promises to put the interests of poor countries first. And developing countries working together are sure to press the United States and European Union on everything from farm trade reform to pharmaceutical access.

It's a sticky business. Part of the problem with negotiating WTO agreements is that consent must be unanimous. That's a tall order with 143 nations involved. Even so, trade ministers are on their way to Mexico to give it a try. John Nichols provides this preview.


WTO Prepares for Meeting In Cancun

Near the end of World War II, leaders from 44 nations gathered in Bretton Woods, New Hampshire to discuss ways of stabilizing world currencies. The talks ultimately led to the establishment of the World Bank, the International Monetary Fund and the precursor of the World Trade Organization, an accord known as the General Agreement on Tariffs and Trade or GATT.

Established on the premise that more trade would boost the global economy, GATT served as a forum for countries to reduce tariffs on imports.

In 1995, GATT expanded the scope of its oversight, set up shop in Geneva, Switzerland and changed its name to the World Trade Organization, or WTO. Today, the WTO is the only international organization overseeing trade in several areas including: goods such as automobiles; services like banking; and intellectual property including patent rights. The WTO also serves as a forum for settling trade disputes.

Robert Zoellick: "One thing's for sure, we don't have any leverage if we're not sitting at the negotiating table pushing people to open up their markets..."

As the Bush Administration's chief trade negotiator, Robert Zoellick is the man who will represent the United States interests in Cancun. He claims a major portion of his mission is the expansion of American agricultural markets abroad.

Robert Zoellick: "Last year we exported about 53 billion dollars of our agriculture produce, this year maybe up to 56 billion dollars. So, if you have an economy like the United States that is already a mature economy, the growth potential really is abroad."

Exporting countries, including the United States, want other member nations to make significant cuts in subsidies and import tariffs. But importers, including the European Union and Japan, have been reluctant to cut their price supports, claiming they need to protect their domestic producers.

Pascal Lamy is the European Union Trade Commissioner.

Pascal Lamy: "We know where we have to converge for Cancun to fly."

The U.S. and the European Union initiated their own private talks hoping to come to terms on some of the biggest issues in agricultural trade. In August, the two "superpowers" of trade announced they had reached an agreement to reduce subsidies and tariffs. The agreement, while vague on specifics, represents a considerable effort by both parties to bridge a significant gap between American and European positions prior to next week's gathering in Cancun.

Robert Zoellick: "About one in three acres in America is planted for export. Our barriers are relatively low so the question is, can we lower other people's barriers to help get more exports? And also deal with some of the large subsidy problems around the world, particularly with the European Union and Japan."

Developing nations, which now make up the majority of WTO members, are pressing hardest for global cuts in farm subsidies and tariffs that make their products less competitive in other markets.

Demonstrators: "Hey hey, ho ho, we don't want no GMO..."

Another thorny issue between the U.S. and the European Union centers on the E.U.'s self-imposed five-year moratorium on approval of biotech imports. The U.S. claims the moratorium is illegal and has petitioned the WTO to form a settlement panel to resolve the trade dispute.

While the U.S. and the E.U. appear to have made progress on curtailing subsidies, other reforms with other nations may be elusive.

The U.S. has long advocated capping tariffs at reasonably low levels. But Japan and the European Union favor percentage-based, across-the-board cuts that could leave high tariffs in place. Japan, for example, currently imposes tariffs on rice imports that are in the neighborhood of 500%.

Robert Zoellick: "Japan is mainly there to try to protect very high rice tariffs and some limitations on things like beef where we've opened that market somewhat but the Japanese remain very grudgingly. So, the nature of a negotiation is give and take on all sides. The goal is to try to get these negotiations done by 2005. So, the point here would be, can we narrow the differences?"

Since any agreement reached by the U.S., Japan or the European Union would have to be approved by the other 143 members of the WTO, it appears likely the negotiations will continue. For Market to Market, I'm John Nichols.


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