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World: Rich and Poor Clash Over Farm Aid

Europe and the United States Have Been Accused of Trying to Break up a Powerful New Alliance of Poor States Bent on Rewriting Global Trade Rules

BBC
September 12th, 2003

The Group of 21 (G21), which includes China, India and Brazil, has threatened the traditional dominance of rich countries during world trade talks in Cancun, Mexico.

The G21 is demanding the complete abolition of subsidies paid by rich countries to their farmers which, they say, locks the developing world out of international markets.

But aid agency Action Aid has accused the US delegation at Cancun of attempting to alternately cajole and bully poor nations into leaving the G21 - an accusation the Americans have denied.

The charity claims US Trade Representative Robert Zoellick attempted to bribe some countries into dropping out of the group with trade incentives.

It said Costa Rica, El Salvador and Guatemala had been offered increased trade quotas if they quit the alliance.

A spokesman for the US delegation said: "This is an outrageous accusation that is groundless."

The EU and the US have promised to reform the subsidies, but their initial suggestions have been criticised for not going far enough.

In other developments:

The WTO has agreed to admit Nepal and Cambodia as new members. They are the first countries classified as least developed to join the trade body since it was founded in 1995.

The street protests which marked the first day of the meeting, including the suicide of a South Korean farmer on Wednesday, have died down.

A Greenpeace protester from Mexico disrupted a US press briefing, leading the WTO to ban all non-governmental organisations from attending future news conferences.

With the issue of farm subsidies still at a stand-off, a group of 16 developing countries are teaming up to oppose the launch of new negotiations on investment and competition rules.

Farming row

The row over farming subsidies has dominated the meetings so far, and there is likely to be little progress on other issues until an agreement has been reached.

The G21 say the rich world needs to keep the promises it made two years ago to cut tariffs.

The EU and US say poorer countries must agree to broader legal and commercial reforms in return for any concessions on farming.

Rich countries give their farmers $320bn in handouts, more than six times the amount they give to poor countries as aid.

So far, the G21 was standing firm, and new members were expected to join in the next few days, Action Aid said.

The big question now was whether the alliance could remain united, or whether "the US would pick countries off one by one," a spokeswoman told BBC News Online.

The G21 could shift the power at the 146-nation WTO talks towards the poor world for the first time, she added.

But the danger for developing nations is that if they hold out for a better deal the five-day talks will end in failure, and they will be stuck with current trade agreements for several more years.

With the 2004 US presidential election looming, the US is likely to find it hard to improve on what it sees as a generous offer that has already drawn political flak.

'Not a threat'

Delegates from both the EU and US attempted to undermine the G21 on Thursday by writing it off as a marriage of convenience.

"It's really unclear to us what is the unifying principle there among those countries," said Deputy US Trade Representative Peter Allgeier.

"On the one hand, you've got some of those countries that were among the most ambitious countries for agricultural reform.

"Then it goes across the spectrum... to countries that have not been advocates of reform," he told reporters.

Another senior US official questioned what Brazil had in common with fellow G21 member India, which shelters behind some of the world's highest tariff walls and is reluctant to open its markets.

The EU, which spends about $100bn on propping up its own farmers, said it was unconcerned by G21 pressure.

"We do not see the G21 as some kind of a threat," said EU spokeswoman Arancha Gonzalez.

"It is a temporary alliance which wants to push the joint interests of its members together."





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