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12.08.2005

Is It Clear?

Next week, the World Trade Organization will hold its big meeting in Hong Kong to discuss an agreement that was supposed to free up trade in farm products and manufactured goods around the world. Liberalizing farm trade helps poor countries; liberalizing trade in manufactured goods and services helps rich countries.

That's why it's no surprise that for the past 50 years, the world trading system has done a whole lot of the latter - helping the industrialized nations - without doing so much to help poorer countries. This trade pact had its beginnings in Doha, Qatar, in 2001, when the rich were reeling from Sept. 11 and talking about getting more of the world onto the global economic prosperity ladder; it was supposed to fix that distorted system.

Given that grand design, it is pathetic to see how this pact has been stalled by the intransigence of the European Union, which has allowed itself to become hostage to France's refusal to take its farmers off the government dole. In the past few weeks, the finger-pointing and posturing have reached new extremes. The British actor Colin Firth, of "Bridget Jones's Diary" fame, even presented the European Union's trade commissioner, Peter Mandelson, with a petition asking that the rich world make trade rules work for the poor; the petition was said to have 10 million signatures. And Tony Blair, running on the fumes of his expiring E.U. presidency, hatched a proposal to help revive the trade talks, but it was quickly slapped down by France et al.

Yesterday, Brazil's president, Luiz InĂ¡cio Lula da Silva, called President Bush to propose a meeting of world leaders in January to take up the issue.

That's not a bad idea because at the rate things are going, the big meeting in Hong Kong will be a bust. And that's just sad, particularly because this is the year when the big industrialized countries promised to finally do something about making poverty history. Helping poor countries is not just about debt relief and aid. It also means ending the trade-distorting giveaways that rich countries have sustained for years to coddle special interests, particularly farmers.

The developed world funnels nearly $1 billion a day in subsidies to its farmers, encouraging overproduction. That drives down prices and leaves farmers in poor nations unable to compete with subsidized products, even within their own countries. In recent years, farmers from America, Europe and Japan have dumped products on world markets at prices that do not begin to cover their cost of production. Europe's system is particularly odious; the United States' farm subsidies are only a third of Europe's. What's more, tariffs in agricultural products are obscenely high, in another attempt to keep the farm products of poor countries out of the supermarkets of Paris, Frankfurt and Chicago.

It's past time to fix this broken system, and make trade rules work for the world's poor.

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