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WTO Confab Ends Without Agreement

TOKYO — The new round of tariff-cutting negotiations under the World Trade Organization is now up in the air as its ministerial conference here failed to produce an agreement after three days of heated debate.<br><br>The central issue at the...

TOKYO — The new round of tariff-cutting negotiations under the World Trade Organization is now up in the air as its ministerial conference here failed to produce an agreement after three days of heated debate.

The central issue at the just-ended session was agricultural products. The ministers from 22 countries and regions participating in the Tokyo meeting failed to narrow a huge gap over the controversial farm trade.

Many participants are skeptical about whether or not agreement can be reached before the self-imposed deadline of March 31. But Japanese Foreign Minister Yoriko Kawaguchi played down the difference of views among participating nations.

“There was a wide and huge diversity of views, which was expected from the beginning,” Kawaguchi said, noting that the Harbinson paper, a preliminary draft proposal on farm trade drawn up by Stuart Harbinson, chairman of the WTO Agricultural Negotiations Committee, was “very successful in the sense that it motivated discussions and helped crystalize our thoughts.”

The ministers, however, reconfirmed their intention to accelerate negotiations on other issues, such as market access to nonagricultural goods and services.

The Harbinson draft, which became the focal point of controversy, called for minimum cuts of between 25 and 45 percent and average reductions of 40 and 60 percent on all farm tariffs over five years; an increase in import quotas to 10 percent of consumption; a 60 percent reduction in trade-distorting domestic subsidies, and a phaseout of export subsidies within nine years.

U.S. Trade Representative Robert Zoellick urged Japan to open up its market to agricultural imports which, he said, would benefit Japan’s manufacturers and service industries, as well as boost its economy. But his proposal was cold-shouldered by Japanese Minister of Agriculture and Forestry Tadamori Oshima, who said Zoellick’s comment missed the point.

Oshima said he has no intention of selling off Japanese farmers in exchange for tariff reductions on industrial and other products.

Reportedly, Japan opposes the Harbinson draft, which proposes a minimum 45 percent cut in its 490 percent tariff on rice and an increase in the 7.2 percent “minimum access” mandatory rice import quota.

European Union members were cold to the Harbinson paper which, they said, was simply a first draft to provoke discussions.

Harbinson said he expects to present his second draft in early March, after hearing members’ views in talks in Geneva at the end of February, according to Asahi Shimbun, a leading Japanese newspaper.

Another major issue was developing countries’ access to affordable medicines, which received favorable responses from members. The U.S. is willing to “work with others for a multilateral solution within the WTO,” Zoellick said.

Meanwhile, the Japanese and Malaysian governments agreed to start working-level talks to study the possibility of concluding a bilateral free-trade agreement. The agreement was reached by Japanese Minister of Economy, Trade and Industry Takeo Hiranuma, and Malaysian International Trade and Industry Minister Rafidah Aziz. The first meeting of the working group on Japan-Malaysia FTA could be held as early as March, according to Japanese officials.