labels: economy - general, world trade organisation
G-8 offers subsidy cuts to salvage trade talks news
18 July 2006
Mumbai: Group of Eight, the world's top eight industrial nations meeting in St Petersburg, softened their stance on farm subsidies in a bid to revive the failed WTO negotiations. Leaders of the world's leading industrialised powers also conferred with the leaders of Brazil, China, India, Mexico and South Africa in an effort to remove the deadlock and spur momentum of negotiations ahead of the Doha Round.

"I am convinced that now is the time for us to make a political decision, whatever it might be," reports quoted Brazilian President Luiz Ignacio Lula da Silva as saying after a meeting with US President George W Bush. "We cannot leave it in the hands of our negotiators only. They already have done immense work, but now it seems to me that they don't have any hidden card in their pockets anymore. Now we're the ones that have to take our cards from the pockets," he added.

European Union Commission president Jose Manuel Barosso, however, sounded evasive when he said, "We gave a mandate to our respective negotiators to come to an agreement on modalities within one month."

The G-8 directive does not affect Russia since it is not a member of the World Trade Organisation.

"The Doha Round should deliver real cuts in tariffs, effective cuts in subsidies and real new trade flows," a summit issued at the G-8 said, adding, "we commit ourselves to substantial improvement for market access in trade in both agriculture and industrial products and expanding opportunities in trade in services."

A WTO meeting in Geneva ended early this month without an agreement on how to cut duties on farm and industrial goods as the rich nations, mainly the US, stuck to their position and refused to yield on farm subsidy cuts.

Trade talks have been deadlocked for months as neither the European Union nor the US, or the G20 group of developing nations will agree on tariff cuts.

Negotiators, both at Geneva and at the G-8 summit, failed to broker a deal for Russia to join the WTO. The European leaders also failed to persuade the Russians to ratify an energy charter committing them to providing a stable supply of gas and oil.

Heads of government of the US, the UK, France, Japan, Canada, Italy, Russia and Germany who have given themselves a month's time to salvage an agreement on world trade, said they are "fully committed to the development dimension of ongoing WTO talks."

"In agriculture we are committed to substantially reducing trade-distorting domestic support and to the parallel elimination by the end of 2013 of all forms of export subsidies as well as establishment of effective disciplines on all export measures with equivalent effect as agreed in Hong Kong...We urge all parties to work with utmost urgency for conclusion of the round by 2006-end to strengthen multilateral trading system," the statement added.

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G-8 offers subsidy cuts to salvage trade talks