EU must reform agro politics for fair trade : Sutton
The Borneo Post - Friday 06 June 2003 

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KUALA LUMPUR: The European Union must reform their farm policies of giving out heavy subsidies as it distorts trade via dumping which jeopardises agricultural economies, New Zealand's Minister for Trade Negotiations and Agriculture, Jim Sutton (pictured right), said here yesterday.

He said that major industrialised economies heavily subsidised their domestic agriculture and produced surpluses at low costs which they could not possibly consume themselves.
"Then, they dump the surpluses into other markets at prices well below the cost of production which destroys the opportunity for other agricultural economies to progress through export trade," he told Bernama in an interview.

"So, if you're a small farmer in a developed country with surplus agri produce, you can't sell them at a fair price as the market is flooded with cheap, heavily-subsidised food from industrial giants," he said.
"It's a very destructive thing," said Sutton, who had arrived here on Wednesday leading a six-member delegation for a three-day working visit.

He had earlier attended the Asia Pacific Economic Cooperation (APEC) Ministers Responsible for Trade (MRT) Meeting in Khon Kaen which had also touched on agricultural issues.
While here, he met Minister of International Trade and Industry, Datuk Seri Rafidah Aziz.

Sutton said that agricultural economies of both developed and developing countries were insisting that agriculture be part of the World Trade Organization (WTO)'s negotiations in Cancun, Mexico, in September.

"The top priority (in the negotiations at Cancun) should be the elimination of export subsidies which do the most damage and have the least benefit for anybody," he said.

Sutton said agriculture had not featured prominently in the WTO and was only included for the first time in the last round in Uruguay under the General Agreement on Tariffs and Trade (GATT), the predecessor to WTO.
"This time, everybody recognises that agriculture must be the centre of this new round and there has to be a big move (for agriculture) to catch up in fair trading rules that apply to industrial manufactured goods," he said.

The negotiations in Cancun are part of the WTO Doha round of trade negotiations, which began in 2001 and were due to be concluded by the end of 2005.

Although trade ministers held talks in Geneva at end-May to avoid a log-jam at the WTO talks in Cancun, they failed to meet the deadline for trade reform such as tariff cuts in agriculture and industrial goods in Geneva.

A draft plan was presented in Geneva for across-the-board cuts in tariffs, which aimed to satisfy the demands of both the rich and developing countries among the WTO's 145 member states.

Sutton said he was hopeful that the chair of the market access negotiating group in the WTO would reach a deal on the blueprint of the modalities which set out the framework for further detailed negotiations. "We want to see significant increases in access to markets and meaningful reduction in trade distorting domestic subsidies.

"But that does not mean to say we expect developing countries to stop subsidising their farmers, but we think they should subsidise in ways that do not distort trade and destroy the opportunity for other countries to earn a living in agriculture," he said.
Sutton said he was optimistic that the negotiations on trade reform in Cancun would provide a win-win situation for both developed and developing countries. - Bernama