Geneva, Aug. 1 (Reuters): Rich and poor nations struck a crucial deal on Sunday to relaunch global trade talks and slash billions of dollars in farm subsidies, open industrial markets and boost global growth.
The accord, which restores the World Trade Organisation’s (WTO) credibility by putting its troubled Doha Round back on track, was hailed as “historic” by exhausted negotiators. But commentators and analysts said the deal was only a small first step and that many of the toughest decisions on lowering barriers to international commerce were still to be taken.
After five days of wrangling, the WTO’s 147 member-states drew up a framework laying down the guidelines for the round, which has been in trouble since the collapse of talks almost a year ago in Cancun, Mexico, when no deal on subsidies was found.
“This is a historic moment for this organisation,” WTO chief Supachai Panitchpakdi said. The hard-won deal on a series of contentious trade issues, from farm reform to the launch of negotiations on a new customs code, puts the Doha Round firmly back on track, officials said. Failure could have delayed further trade liberalisation for years.
Rich nations welcomed the deal, which would commit them once the round is completed to rein in the huge subsidies they lavish on farmers and give developed nations better access to their farm markets.
“The Doha Round is back on track. The results are good for the EU and good for developing countries,” EU Trade Commissioner Pascal Lamy told reporters. He added that the round might be completed by the end of next year.
The Doha Round was launched in late 2001 and was supposed to have been completed by the end of 2004, but trade officials long ago abandoned that deadline.
US trade representative Robert Zoellick said the accord was ”crucial step for global trade”. “There's a lot of work yet to be done. But today’s framework is a milestone,” he said.
After an all-night negotiating marathon, key WTO members, including the US, EU, Brazil and Japan, agreed to the elimination of export subsidies at a date yet to be set.
Agreement in the sensitive field of agriculture opened the way to outline accords in industrial goods trade, services and measures to boost the stake of poorer developing countries in the world trade.
The World Bank says the round could help lift more than half a billion people out of poverty and trigger growth by injecting billions of dollars into the world economy.
African countries, who won some concessions from the United States on cotton, long seen as a prime example of the pain rich nation subsidies can inflict on poor producers, said they could live with the accord.
But the pact was fiercely attacked by some activist groups, with the Focus on the Global South calling it a “catastrophe for the poor.”