Issue 3 - American Palm Oil Council

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Markets The WTO talks need a clear road map forward – and soon DOHA DEVELOPMENT AGENDA The world trade talks known as the Doha Development Agenda began nearly five years ago, aimed at helping the poorer countries to benefit from trade liberalisation with the reduction of tariff and non-tariff barriers and poverty eradication. But the goodwill and political will that helped launch the Doha Round in the Qatari capital amidst much fanfare in the aftermath of Sept 11, 2001 seem to be fading. In Doha in November 2001, rich countries pledged to give something more than money: the opportunity for poor countries to sell their goods and earn their way out of poverty. The focus was on fair trade and a more level-playing field for the developing world, including advocating big cuts on farm subsidies by the industrialised nations. In agriculture, developing countries are required to cut tariffs by 24% while developed countries are to reduce these by 36%. Thus, the Doha Round was tasked with the mandate of reforming the world trading system by putting together a broad negotiating framework on world trade liberalisation. Meeting in Geneva at the end of June 2006, international trade negotiators failed once again to conclude the Doha Development Round. This two-year stalemate is the result of the major players – particularly the EU, US, and G-20 – persistently treating the negotiations as a zero-sum game, only making a concession in exchange for one from the other sides. Wrangling and the blame game on who is not prepared to make concessions have been the order of the negotiations. GLOBAL OILS & FATS BUSINESS MAGAZINE •VOL.3 ISSUE 3, 2006 27
Markets There is growing awareness that subsidies are not only immoral, but also illegal. They increase poverty in developing countries, encourage inefficiency among producers in developed nations and punish consumers worldwide. EU and US farm subsidies The US maintained that the Europeans are highly protective of their farmers and that the European Union (EU) needs to do much more to reduce the subsidies which Washington says are twice those in the US. (The US now spends about $20 billion (RM74 billion) annually on tradedistorting farm subsidies. However, Washington has offered to cut its WTO allowance for the main farm programme by 60% to US$7.6 billion, but trade rivals argue the reduction leaves real spending unaffected.) With no player willing to take the first step, the talks remain deadlocked. Regrettably, this inconsiderate approach to trade negotiations overlooks two important considerations. First, many ‘painful’ concessions are, in reality, beneficial policy measures that should be undertaken whether or not concessions are extracted from the other parties. Second, negotiators have lost sight of the big picture, namely that all parties stand to benefit from an agreement, even if concessions are not equally balanced. A bigger factor in the collapse might have been the decision in 2001 to label the negotiations a ‘development round’, which raised expectations that could not be delivered. Protectionism and employment The Doha Round is the best opportunity there is to reduce and eventually eliminate agricultural subsidies and to open markets for agro-products. These steps are essential to increase wealth and create jobs through international trade, particularly in developing world. There is growing awareness that subsidies are not only immoral, but also illegal. Decisions by WTO over the past few years, in response to complaints from Australia, Brazil and India among others, have endorsed the view that subsidies profoundly distort international trade. They increase poverty in developing countries, encourage inefficiency among producers in developed nations and punish consumers worldwide. Trade in agricultural goods has never been the subject of a serious liberalisation effort. Trade in industrial goods, by contrast, was the main goal of previous rounds under the General Agreement on Tariffs and Trade. As a result, protection of industrial products was significantly reduced everywhere, while protection of the agricultural sector was barely scratched. Eliminating agricultural subsidies and opening markets in rich countries will affect no more than 2% of their labour force. This is nothing compared to the 30-35% of workers who hold industrial jobs in developing countries, whose markets for imported industrial goods are being targeted by richer nations. Agriculture protectionism depresses living conditions worldwide to the benefit of a handful of privileged farmers in rich countries. More balanced international trade relations will have a multiplying effect on developing countries, where a significant part of the population makes a living from agriculture. 28 GLOBAL OILS & FATS BUSINESS MAGAZINE • VOL.3 ISSUE 3, 2006
Page 1 and 2: KDN No: PP 10311/9/2006 • VOL.3 I
Page 3 and 4: CONTENTS C O N T E N T S 27 30 41 4
Page 5 and 6: Cover Story Two factors driving bio
Page 7 and 8: Cover Story Even if CPO is not used
Page 9 and 10: Bio-fuels The Malaysian industry is
Page 11 and 12: Bio-fuels Commercialisation of bio-
Page 13 and 14: Environment Trade in carbon credits
Page 15 and 16: Environment of domestic GHG reducti
Page 17 and 18: Markets Investors are flocking to t
Page 19 and 20: Markets import duty structure for b
Page 21 and 22: Markets The edible oil industry wil
Page 23 and 24: Markets Market Outlook 2006-2010 Th
Page 25: Markets Its seed and oil output may
Page 29 and 30: Market Analysis Instead of posting
Page 31 and 32: Market Analysis Malaysian Palm Oil
Page 33 and 34: Market Foreseeing a price drop if t
Page 35 and 36: Nutrition TFA-free items on Wendy's
Page 37: Trade Update Summary of the Malaysi
Page 40 and 41: Food Technology The chemistry of oi
Page 42 and 43: Physical properties Many of the foo
Page 44 and 45: It can be said that any refined oil
Page 46: Global Oils & Fats Business, a quar

Issue 3 - American Palm Oil Council

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