WTO talks stall over farm tariffs

WORLD TRADE talks came to halt last week (w/e Mar 25) when negotiators touched on the crucial issue of agriculture.

Talks broke down following a complex discussion on harmonising the rules on tariffs in Europe and Japan in line with developing countries.
 
The Independent reports that this set-back now jeopardises the chances of the countries involved reaching an agreement by the unofficial Aug 1 deadline.

It was hoped that a consensus could be presented to the full meeting of ministers of all 148 member countries in December.

The current negotiations involve a group of 20 countries, including the large and growing economies of China and Brazil, which are keen to ensure any reduction in tariffs gain them greater access to foreign markets.

According to the paper, Tom Grocer chair of the agriculture negotiations, warned in February that a formula needed to be agreed “within weeks” if talks were to remain on track.

Should negotiators fail to reach an agreement before then, the chance of consensus being reached before the end of 2006 would be greatly reduced.

Agriculture remains the most contentious of all topics.

The latest problem arises over how to convert tariffs from a fixed monetary value, such as $1 an item, to the ad-valorem system, an agreed formula that express the tariff as a percentage of the products value.

The conversion formula is considered crucial as the products regarded as having the highest tariffs face the sharpest cuts in duty.

Currently the vast majority of ad-valorem tariffs are used by the European Union, Japan, Norway, Switzerland and Bulgaria.