Envisaged Impact on the Economies of African Countries and the Nepad Programme of Development of the Agreements reached at the World Trade Organisation Meeting between the G8 Countries and Developing Countries on reduced Subsidies in Agriculture Sector of Development Countries

NATIONAL ASSEMBLY

FOR ORAL REPLY

QUESTION NUMBER: 4

DATE: 19 AUGUST 2004

Mr B A D Martins (ANC) to ask the Deputy President:

What is the envisaged impact on the economies of African countries and the Nepad programme of development of the agreements reached at the World Trade Organisation meeting between the G8 countries and developing countries on reduced subsidies in the agriculture sector of development countries? N521E

REPLY

Honourable Members will be aware that our farmers in Africa struggle to compete in global markets because of enduring protectionism and trade-distorting domestic support in rich nations. Together, the European Union and the United States support their farmers to the value of $300 billion a year. Clearly, this has a significant constraint on the growth of our economies.

The framework agreed to in Geneva between the G8 and the developing countries is therefore very significant because it commits rich nations to substantially reduce trade-distorting domestic support, eliminate all forms of export subsidies and reduce tariffs by a date yet to be fixed. Least developed countries will have full access to all special and differential treatment provisions agreed to, and are not required to undertake reduction commitments.

Members should, however, be cautioned that the immediate impact of the Geneva agreement on African economies and NEPAD will be limited. While we welcome the political will demonstrated to seriously begin addressing the issue of agriculture, we should, however, realize that what has happened is merely to conclude talks on modalities and how to negotiate in future. The challenge for all WTO members is thus to maintain this momentum as we now enter more detailed negotiations.

Moreover, the agreement as it stands has loopholes and exclusions that could end up undermining the benefits of the Doha Round. For instance, rich nations have an escape clause to protect some "sensitive" products as do poor nations for "special" products. These are challenges that we, in consultation and partnership with our colleagues in Africa and the G20, will seek to address so as to ensure that the criterion of development remains at the core of the Doha Round.

On the whole, however, the agreements should have a positive impact on the economies of African countries and the NEPAD programme of development.