The Telegraph
Since 1st March, 1999
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West best at divide and rule
- US to double ‘aid for trade’ package for the have-nots but developing nations are not amused

Hong Kong, Dec. 14: The US will more than double its “aid for trade” package for least developed countries to $2.6 billion per year by 2010.

The move follows similar gestures by the European Union and is being seen as a western initiative to cause rifts among developing countries.

US trade representative Robert Portman said the United States is the largest donor of aid-for-trade in the world, having allocated $1.3 billion this year.

“Our spending on trade-related assistance has more than doubled in the last five years,’’ he added.

“However, I must underscore that these funds and the additional money must go hand-in-hand with market access expansion,’’ Portman said.

He left no doubt about the US wanting to leverage its financial muscle to prise open markets in the developing countries. Japan has also announced recently that it would spend $10 billion in three years on the aid-for-trade package.

Experts see this package for least developed countries (LDC) as a spin to the WTO development agenda the G-20 nations are fighting for.

The advanced countries are also trying to position themselves as pro-LDC by pushing for duty-free export for their products. It is being used to counter the tremendous moral pressure built by the G-20 countries, led by India, Brazil, South Africa, Argentina and China, to implement the development agenda for the current round of WTO talks.

The advanced countries have refused to reduce subsidies to their farmers. The subsidies have led to depressed prices of agricultural goods which has affected farmers in developing countries. The gameplan to focus on the LDC package is also seen as a move to deflect attention from this issue.

The G-20 countries are still fighting to get a better deal for the cotton and banana producing countries and this is expected to check the onslaught of advanced countries and a possible erosion of support.

However, there are fears that some African countries may succumb to the western aid-for-trade package despite the fact that they would not get a fair deal for their exports.

On the flip side, there are differences between the US and Europe as well over the farm subsidy issue. The US feels that the issue of agriculture should get priority and farm subsidies should be reduced.

The EU has taken an extreme position on agriculture and has refused to budge as it wants to give precedence to the reduction of tariffs in the industrial sector. But there is a great deal of convergence between them on most issues to draw up a combined strategy.

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