Breakthrough in WTO Doha deal

TRADE MINISTERS meeting in Paris have made an important breakthrough in opening up agricultural markets, adding fresh impetus to the ongoing Doha Development Round of world trade talks.

Those talks, which are aimed at reducing world poverty by boosting trade, are due to be wrapped up in Hong Kong at the end of this year.

But they have been held up for a number of months while WTO members have fought over how to harmonise import tariffs prior to agreeing the level of future cuts.

Meeting in Paris this week (w/e May 6), representatives from 30 countries agreed a new system to convert existing tariffs into so-called “ad valorem equivalents”.

Currently import tariffs are set in € or $. For example, the EU import tariff for boneless forequarters of beef is €2.21/kg (150p/kg).

In future, this will be expressed as a percentage of the product price, and will then be slotted into a new formula (yet to be negotiated) to determine the level of cuts.

Part of the dispute in recent weeks revolved around what price level to use for each product line.

The EU had wanted a higher price, so that the % of tariff was actually lower and therefore had to be cut less.

Other countries, for example Brazil and Australia, had called for a lower set of prices.

The deal reached in Paris this week was a compromise between the two.

EU agriculture commissioner Mariann Fischer Boel cited the deal as “proof of our willingness to move the negotiations forward”.

Australian trade minister Mark Vaile said: “It provides a strong base for us to work on reducing tariffs and facilitating increased trade flows for Australian agricultural exports.”

The next step will be for the WTO to issue a new draft paper outlining a formula for cutting the new ad valorem tariffs, as well as export subsidies and domestic farm supports.

This will be presented to trade ministers in China in July and is intended to form the basis of a final deal targeted for the meeting of all 147 WTO members in Hong Kong in December.