NZ set to benefit from deal on trade

Hong Kong - A deal to end farm export subsidies by 2013 holds out hope that New Zealand producers have finally got something concrete from the world trade talks.

A draft declaration has proposed April 30 next year as the deadline for reaching a full draft deal on the Doha Round of talks that lasted four years.

The round, which could inject billions of dollars into the global economy and lift millions out of poverty, must be concluded by the end of next year.

New Zealand special agriculture trade envoy Alistair Polson said that removing export subsidies by 2013 would boost dairy farm returns.

Trade Negotiations Minister Jim Sutton hailed the talks as good news for developing countries although he conceded it would be some time before New Zealand farmers got a significant dividend.

But for the least-developed countries there will be duty-free and quota-free access to all developed country markets.

Last night the declaration said trade ministers had instructed their negotiators to ensure a high level of ambition as they struck a balance between agriculture and industrial market access.
The New Zealand delegation was optimistic that this could ultimately result in a positive outcome for farmers in this country.

Mr Sutton said that irrespective of how the rest of the Doha Round played out, the deal for the poorest countries was on a promise.

It would provide good reasons to conclude the round over the next 12 months.

Mr Polson said New Zealand farmers would be frustrated that there had been no progress on further opening market access, which was kept off the agenda in Hong Kong.

He doubted the WTO's ability to make much progress on this score as the Doha Round was now running out of negotiating time to reach an overall agreement by next December.

As WTO negotiators worked to get a deal that would live up to the promise of the Doha development round, angry demonstrators fought a pitched battle against police in the heart of Wan Chai, Hong Kong's prime bar district.

Mr Sutton said there was not a lot of progress in the key area of New Zealand's concern - the further freeing-up of global farm markets.

"But we didn't expect to do a deal on market access and domestic subsidies because the European Union is politically not in a position right now to put anything on the table."

The compromise text, proposed after six days and almost as many nights of hard bargaining between rich and poor nations, must be approved by the full 149-state WTO membership.

"We agree to ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013," the draft declaration said.

An accord on when to end export subsidies would remove one of the main obstacles to progress in the free trade talks, even if the compromise fell short of the 2010 date that agricultural goods' exporters had been seeking.

The draft also proposed eliminating export subsidies on cotton next year - a sensitive issue for the United States.

The Hong Kong ministerial meeting had initially been scheduled to sign off on a Doha draft, but differences were so great between states going into the conference that the WTO opted to lower the bar and seek a more modest pact.

For least developed countries, the text offered duty-free and quota-free access on at least 97 per cent of all their goods by 2008, falling short of their demand for 99.9 per cent.

It left open the possibility of dismantling rich nation cotton subsidies, a key African demand, at a faster pace than would eventually be agreed for all farm goods under a final deal.

The draft was hammered out after negotiators talked through the night, wrapping up discussions at 9am.

"It's a fairly chaotic process," said Mr Sutton. No one knew all the answers to what had happened yet.