"It's good news for the world economy, it's good news for developing countries and it is very good news for Europe because we have always prioritised WTO and multilateral rules- based trade openings as a major objective of EU trade policy," said the European Union's trade commissioner, Pascal Lamy, before the final vote.
Talks had been extended into Saturday after WTO negotiators failed to reach a previous deadline of midnight on Friday.
Developed countries have recognised that agricultural trade with a heavy subsidy component is not free trade.
But even with the latest agreement, the details will still have to be hammered out, and that could take at least another couple of years, says the BBC's John Moylan in Geneva.
"Developed countries have recognised that agricultural trade with a heavy subsidy component is not free trade," said Indian Trade Minister Kamal Nath.
A small group of African countries also claimed a major breakthrough on their key agricultural product of cotton, said our reporter.
After hours of talks, key WTO nations, including the US, the EU, Brazil and Japan, agreed to eliminate export subsidies at a date to be set, to limit other subsidies and lower tariff barriers.
In return, wealthier nations, among them the EU's members, are insisting on better access to markets in developing nations.
The US FTA could suddenly become a good deal less important. Australia's real trade needs are access for primary products and that's precisely what the FTA does not give. On the other hand, if the WTO process suddenly comes alive the FTA looks a lot less like a safe harbour and a lot more like a Free Tampa agreement.
Iron Mark will be making a terrible error if he ratifies the FTA. Rightly or wrongly it will be seen as another small target exercise, but one that permanently trades off cultural sovereignty and the PBS in return for SFA. The FTA is less generous on cultural matters than the Canada/US agreement. The FTa also ties us into a US economy that sooner or later has to start contracting.
From superpower to dinosaur: America's destiny
To stabilise its debt at this level by 2013, US imports from the rest of the world will have to decline by $US90 billion to $US375 billion in today's dollars, depending on various assumptions about future US exports and the value of the American dollar.
The report argues that "it is not possible to construct a plausible scenario in which the US can even sustain s its current levels of imports. Measured in real terms, the extraordinary growth in US imports over the past 12 years clearly will not be repeated".
What this means is that if Australia is banking on expanding its exports to make up for the concessions it has made in areas such as intellectual property rights, rules governing investment and government procurement, it will have to be at the expense of other exporters to the US, such as Canada, Japan and China.
While the Centre for Economic and Policy Research doesn't single out Australia, it states that "for most countries, the costs of such concessions can be expected to exceed any gain they might anticipate from increased access to a shrinking US market for their exports".
The contraction in US imports is unlikely to be smooth or without great cost to the world, especially those tied to the US through free trade agreements.
The Bush Administration has turned Bill Clinton's $US5.6 billion surplus into an unsustainable deficit - before counting the $150 billion a year cost of its unsuccessful occupation of Iraq. And there is a mulish determination to avoid developing an Iraq exit strategy, higher taxes and the other policies necessary to avoid another global recession that could see the US transformed from superpower to dinosaur.
Trade policy really needs to have a hard edge. It does not need to be built on the nebulous desire of the Man of Steel to make himself one with the Great Dubya.
Update
Kick AAS has (as usual) done the hard work of ploughing through the WTO Draft General Council Decision of 31 July 2004, and says:
Great! But hang, on, there is no date set. Does that mean it could take 20, 30 or 50 years? Agreeing to end subsidies without a date is a bit like rich nations deploring subsidies in general (because they offend free trade) but doing nothing about it in practice (ie the situation before these talks started). It is the same problem with the end of cotton subsidies over which African nations claimed a late victory. The end has been agreed but with no date attached. It�s as bit like writing a will with the amount of the legacy left blank.
W are told Augustine of Hippo used to pray: 'Lord, make me chaste, but not yet.
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