Developing Countries Demand Better Deal On Trade; New EU Farm Offer Said Coming

EVIAN, France--Leaders of developing nations took advantage June 1 of their first-ever participation in a Group of Eight summit to reiterate demands that the world's richest nations make greater efforts to ensure that trade liberalization benefits the world's poorest nations. Brazilian President Luis Inacio Lula da Silva--one of a dozen developing country leaders invited to participate in the first day of the June 1-3 summit--led the charge, telling G-8 leaders that trade subsidies in rich countries are preventing poor countries from using export-led growth to develop their economies.

"I am worried about ... resistance to removing billionaire subsidies, principally against agriculture," Lula said in a post-meeting press conference. "If developing countries don't make progress, it will be impossible for the industrialized countries to sell good to these markets, so it is really in the G-8 countries' interest that we make progress too," Lula said.

French President Jacques Chirac dedicated Day One of the three-day summit to a series of development-oriented talks between the G8--Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom, and the United States--and a group of key developing nations led by Brazil, China, India, Nigeria, and South Africa.

The developing countries presented a united front, insisting that the G-8 must take greater efforts to ensure a positive outcome from the current round of trade liberalization talks taking place under the World Trade Organization umbrella.

Developing country leaders demanded that the G-8 take a principal role in meeting objectives of the WTO round's Doha Development Agenda, which aims to create direct linkages between trade liberalization and development.

G-8 heads of state said the message was received loud and clear.

Chirac, who planned the agenda of the three-day summit largely around development issues, told reporters June 1 that he believed the G-8 was moving "in the right direction" on North-South trade issues.

"It is not just a question of farm subsidies at issue here," Chirac said June 1, noting that countries must also make progress on preferential market access and food aid, which he described as a "highly contestable means of using foreign aid to sidestep" the agriculture subsidies debate.

Chirac, Prodi Plan Cancun Farm Offer

Both Chirac and European Commission President Romano Prodi predicted that the European Union would arrive at the World Trade Organization's September ministerial meeting in Cancun, Mexico, with a new farm trade proposal. Prodi told reporters June 1 that "real reforms" to the EU's Common Agriculture Policy would be offered as part of the Doha Round, and insisted that Europe would do all it could to ensure a successful outcome from the "decisive" Cancun meeting.

Aside from the large outreach meeting with developing countries, the G-8 leaders also discussed a joint action plan with heads of state representing the New Economic Partnership for Africa's Development (NEPAD).

The NEPAD initiative-- launched by African leaders during an Africa-wide summit meeting in July 2001--aims to use increased trade and investment as a key driver of African development.

G-8 Hypocrisy Scored

Senegalese President Abdoulaye Wade told G-8 leaders that Africa's investment needs dwarf current investment commitments, and later reiterated Lula's demand for greater trade opportunities. Wade pointed out the "hypocrisy" of G-8 leaders who preach an agenda of trade liberalization and market access for poor countries while continuing to subsidize their farm sectors.

Chirac answered this accusation June 2, noting that boosting trade and investment was "the only response we can have to Africa's slide," and insisting that "rich countries are ready to assume their responsibilities."

In a NEPAD Implementation Report presented and then approved by the G-8 summit, heads of state reiterated prior commitments to the objective of duty-free, quota-free market access for products originating in the world's least-developed countries, most of which are in Africa.

They also reiterated their commitment to improve the effectiveness and ease of use of their respective trade preference programs, instructing trade officials to "explore how to implement this objective in practice."

Recognizing that commodity market and weather-related shocks pose a critical challenge for the world's poorest countries, particularly in Africa, the G-8 leaders reaffirmed their support for ongoing World Bank efforts to create effective, market-based mechanisms to help mitigate weather and commodity-based shocks to these countries' economies.

Trade Among Non-OECD Countries Stressed

While Lula and his fellow heads of state pressed the G-8 for greater trade liberalization, they also affirmed their own capacity for action. "There's a much bigger world out there than just Europe and the United States," Lula said, pointing out that Brazil's cumulative trade with China was just as important as its relationship with the larger powers. "Developing countries need to strengthen ties among themselves," Lula said. "As developing countries, we have many things in common, so we don't have to wait for the G-8 to take our own actions on trade and development," he said.

The EU's Prodi seconded this idea during his June 1 press conference, noting that while trade between rich and poor countries was "important," it was also crucial that developing countries boost "regional and sub-regional trade."

"Latin American trade, African trade, and trade within the Maghreb [Saharan] region" are as important to future development as trade with the G-8, Prodi said.

Further information on North-South trade discussions during the Group of Eight summit, as well as copies of the "Implementation Report by Africa Personal Representatives to Leaders of the G8 Africa Action Plan," is available at: http://www.g8.fr.

By Lawrence J. Speer

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