Food Subsidies Could Stall WTO Deal

Menelik Alemu, Ethiopia’s ambassador in Geneva, and Geremew Ayalew, chair of a national technical committee for WTO at the Ministry of Trade (MoT), in Bali, Indonesia, on Wednesday, December 4, 2013. Currently negotiating Ethiopia’s entry to the world’s police on trade rules, Menelik is scheduled to address the Ninth Ministerial Summit of the WTO, where many delegates say a deal is within reach, on Thursday afternoon. (Pictured, above)

Ethiopia sees itself joining the WTO in 2015, and the proposed deal this week, known as the “Bali Package” is crucial to least developed countries such as Ethiopia, for it is to agree on agricultural subsidies, trade facilitation and support to least developed countries. A disagreement from one single country could stall a consensus among the 159 member countries. India, in particular, is seen as a major force that could halt talks at the multilateral trade talk platform this week, due to its strong position against banning agricultural subsidies to its farmers.

Some of its citizens were vocal inside the Nusa Dua Conference facility this morning, protesting the ongoing meeting and demanding it to stop the talks.

USA; Hands Off Our Food!” decried one of their placards.

But it is delegates from the least developed countries who are opposed to agricultural subsidies. In fact, the United States (100 billion dollars), the European Union (80 billion euro) and India are major countries blamed for such subsidies deemed to have distorted exports of primary goods from poor countries.

Yet, most delegates from developing economies and least developed countries are fearful of a draft agreement on trade facilitation. A deal, if reached, would force them to lift entry barriers to trade. Praised by its proponents for its potential to add an estimated one trillion dollars to the world economy, trade facilitation allows the free flow of good and merchandises among member countries, with countries required to change their systems that impede free flow of trade.

“It is about reforms,” said Yonov Frederick Agah, deputy director of the WTO, speaking to journalists here in Bali. “And reform, in any circumstances, is always controversial. There are countries that want to do certain things, but they want to do it in their own sequence, time and money.”

Time and money is indeed what countries such as Ethiopia, which is one of the 25 countries still in the accession process, lack in their bid to join an organisation that was formed in 1995, and is created to treat the rich and the powerful equal to the poor and the weak. The weak are however in a constant look out for support in the form of enhanced capacity to negotiate better deals.

The European Union (EU) claims the moral high ground in its support to least developed countries.

“We are already the biggest donor in respect to aid for trade and trade facilitation,” Karel de Gucht, EU Trade Commissioner, said in an exclusive interview with Indonesia’s daily, The Jakarta Post. “We are going to continue this and we have earmarked 400 million euro for that purpose, for five years.”

It is not clear if part of this money goes to a newly established funding facility under Enhanced Integration Framework (EIF), which is chaired by Ethiopia’s Ambassador to Switzerland, Menelik Alemu. In addition to helping Ethiopian trade negotiators enhance their skills in trade talks, with an outlay that may eventually grow to three million dollars, close to 300,000 dollars is immediately available to finance programmes that support small scale farmers and those active in the hospitality industry, Geremew Ayalew, chair of a national technical committee for WTO at the Ministry of Trade (MoT), told Fortune.

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