Rich Nations Refuse to Let Go of Subsidies as WTO Talks Near

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AGRICULTURE

What's It All About?

Brazil calls it the "motor", the traditional way for poor countries to start developing. It is also a symbol for rich countries. The EU spends 40 per cent of its budget on an industry that employs 2 per cent of the workforce. And, in 2002, the US approved a bill that gives farmers $175bn over 10 years.

What Poor Countries Want

An end to the $300bn a year of subsidies that pays every cow in the rich world $2 a day. Also, sharp cuts in tariffs so they can sell into rich markets. They want to see action against bugbears such as low tariffs on leather but high ones on shoes, penalising those who try to add value.

What Rich Countries Want

They have to offer to cut farm support but will meet internal opposition if they go too far. The EU has offered 70 per cent cuts in subsidies and 40 per cent cuts in tariffs. The US has offered to reduce subsidies by 80 per cent.

What Is Likely to Happen?

The EU cannot go further without antagonising the French. This could be a real deal blocker unless poorer countries and vocal opponents, such as Brazil, are prepared to sign up to some face-saving language for all parties.">t r u t h o u t - Rich Nations Refuse to Let Go of Subsidies as WTO Talks Near: "AGRICULTURE

What's It All About?

Brazil calls it the 'motor', the traditional way for poor countries to start developing. It is also a symbol for rich countries. The EU spends 40 per cent of its budget on an industry that employs 2 per cent of the workforce. And, in 2002, the US approved a bill that gives farmers $175bn over 10 years.

What Poor Countries Want

An end to the $300bn a year of subsidies that pays every cow in the rich world $2 a day. Also, sharp cuts in tariffs so they can sell into rich markets. They want to see action against bugbears such as low tariffs on leather but high ones on shoes, penalising those who try to add value.

What Rich Countries Want

They have to offer to cut farm support but will meet internal opposition if they go too far. The EU has offered 70 per cent cuts in subsidies and 40 per cent cuts in tariffs. The US has offered to reduce subsidies by 80 per cent.

What Is Likely to Happen?

The EU cannot go further without antagonising the French. This could be a real deal blocker unless poorer countries and vocal opponents, such as Brazil, are prepared to sign up to some face-saving language for all parties."

INDUSTRIAL TARIFFS

What's It All About?

Countries impose these duties on imports to protect their domestic manufacturing bases. They cover 60 per cent of world trade and liberalisation might benefit rich countries more. Countries have for the first time agreed to follow a formula that cuts the highest tariffs most.

What Poor Countries Want

It comes back to agriculture - if they have to cut their tariffs they want something in exchange. Beneath the surface are some tensions; tariffs between poor countries are high and should be cut. Within Brazil, manufacturers want the government to give way so they can import cheaper parts.

What Rich Countries Want

They want sizeable cuts in tariffs to open developing country markets in exchange for farm subsidy cuts. The EU has proposed a top tariff of 10 per cent for poor countries. The US wants parallel talks to eliminate some tariffs.

What Is Likely to Happen?

Probably little other than warm words at best. The WTO has said that failure to reach an accord would mean lost opportunities for industrial trade of the order of $50bn to $250bn.