Saturday, December 17 2005 16:26 Hrs (IST) - World Time -

Hong Kong: The WTO today (Dec 17,2005) came out with the draft Ministerial text that proposes to end farm export subsidies either by 2010 or by 2013, but left many other contentious issues undecided, reflecting modest progress in breaking the impasse.

Though the 44-page draft text made some forward movement on ending export subsidies, it remained silent on the end date for finalisation of full modalities of the agreement.

The text gives two dates for ending export subsidies, one being 2010 and the other being five years after the implementation of the agreement, which starts in 2008. This clause will give developed countries time till 2013 to eliminate export subsidies.

The initial draft is likely to undergo some more changes as the heads of delegations and negotiators from 149 member countries meet later and during green room discussions. The final Ministerial declaration will be announced tomorrow (Dec 18,2005).

On the other contentious issue of phasing out trade distorting domestic support, the text proposes three bands for developed countries for reduction, while exempting developing countries from any commitment.

India's concerns on Special Products and Special Safeguard Mechanisms have been somewhat reflected in the draft but there was not much specificity, officials said.

The text provided some relief to developing countries, as it has prevented developed countries from shifting subsidies from one box to another to continue them in a different form.

The draft text also suggests eliminating cotton subsidies by next year, a key demand of poor West African countries.

The draft said that the date for eliminating export subsidies would be confirmed only after completing all the modalities for implementation.

On Non-Agriculture Market Access, the draft makes it clear that tariff cuts for industrial goods will be based on Swiss formula though it did not mention a specific formula or the coefficient that would be used for reductions.

Reductions in industrial tariffs has been a key demand of rich countries like the US and the European Union, while poor and developing countries like India have been opposing steep reductions to protect their domestic industries.

The text, released on the penultimate day of the Ministerial, also shows progress in arriving at an agreement for granting duty-free and quota-free market access to Least Developed Countries.

However, some provisions are still in brackets implying that talks had not been completed on them.

On services negotiations, the text points out that little headway has been made so far and makes it clear that plurilateral negotiations cannot be launched in services.

Meanwhile, civil society groups have denounced the draft text, saying it was 'full of peanuts and full of time tables'.

Leading international NGO Green Peace said the text was a long way from equity and sustainability.

Action Aid said, "After four years of promises is this the best WTO can offer? It is clear that negotiations are on wrong track, with poor countries concerns shunted to the sidelines."