Emad Mekay

HONG KONG, Dec 14 2005 (IPS) — The second day of global talks to liberalise trade among nearly 150 nations devolved into a row between the United States and Europe over U.S. food aid to poor nations, amid European accusations that Washington’s programme is a farm subsidy disguised in a humanitarian cloak.

The original priorities of the Sixth Ministerial Meeting of the World Trade Organisation (WTO), which runs through Sunday, were to address the contentious issue of the hefty agricultural subsidies handed out by rich nations, and to further lift barriers to the trade in goods and services.

But as the talks look increasingly unlikely to end in a multilateral deal, the EU and the U.S. appear visibly anxious to avoid being blamed for the failure. Both have been pointing fingers at each other and raising side issues.

“We came here to talk about the core issues. We do not want to be distracted by marginal issues,” a senior U.S. administration official told IPS, referring to the food aid spat. “So far we’ve been distracted.”

Another senior U.S. official who spoke to reporters Wednesday rebuked the European Union for raising concerns over U.S. food aid practices at what is essentially a trade liberalisation meeting.

“I wish that the Europeans would move away from that position for themselves, from a humanitarian and developmental perspective,” he said, adding that food aid discussions were out of place.

“We shouldn’t be fooling around with protocols in a venue where there aren’t technical expertsàat the table discussing what the consequences would be if we went along with these changes that the EU has proposed,” the official said.

EU Trade Commissioner Peter Mandelson had been turning up the rhetorical heat on Washington since before the start of the Hong Kong meetings on Tuesday. He has called on the United States to deal with its “fake food aid” and change what he called “trade distorting” practices.

A statement from the European Union issued here noted that at least 60 percent of the 2.6 billion dollars of food aid the U.S. donated in 2003 was actually spent in the United States.

The food was procured on the U.S. market and transported by U.S. companies, thereby benefiting U.S. agribusiness and shipping companies rather helping local producers in needy nations.

Officials from the 25-nation EU bloc have publicly faulted their trading partner across the Atlantic for using food aid donations as “a commercial tool to dispose of surpluses” and capture market share in foreign countries. Dumping of surpluses under the cover of food aid is an abuse of WTO regulations, they say.

The United States is the world’s largest donor of food aid.

The EU has further proposed that the United States transfer its food aid to a “cash only” programme that would allow free and direct food procurement by the poor nations themselves.

The European demands prompted an angry reaction from U.S. trade diplomats here, with U.S. Trade Representative Rob Portman saying that the Europeans had an “obsession” with the food aid issue.

The U.S. delegation re-released a fact sheet that argued that U.S. food aid averaged less than two percent of all U.S. agricultural exports, a negligible sum, most of which went to nations classified as Least Developed Countries.

But the European demands are not without fans inside the United States itself. Last week, the George W. Bush administration acknowledged that U.S. food shipments to Afghanistan had undercut the market for locally grown wheat on the eve of a bumper harvest.. Wheat rotted in the fields and the next year, farmers turned to opium poppies instead.

That episode, among others, triggered calls in the U.S. administration for a change in how Washington runs its food aid programmes.

The head of the U.S. Agency for International Development (USAID), Andrew S. Natsios, who will leave his job next month, has proposed making 300 million dollars worth of U.S. food aid, about 25 percent of the budget, available as cash that could be used to buy food in developing countries.

However, that proposal was quickly put to rest by a powerful Congressional coalition that has backed funding for these programmes for the past 50 years. Influential U.S. senators who initially supported the plan backpedaled under pressure from agricultural lobbies, the U.S. shipping industry, and some humanitarian non-governmental organisations.

At the Hong Kong conference, NGOs like World Vision and Catholic Relief Services distributed a report protesting both the European proposal and the quickly buried U.S. reform plan.

“These proposals would sharply threaten the worldwide availability of food assistance,” they claimed in a statement.

Other NGOs, including Oxfam and the Oakland Institute, have supported a change in the make-up of U.S. food aid programmes.

A report by the Oakland Institute released in October said that a shift in food aid policies to help build up local agricultural infrastructure and support small-scale farmers would be far more effective in combating poverty and helping developing nations..

The U.S.-EU debate here has also drawn input from some food aid recipient nations. African countries said Wednesday they prefer a mix of the European proposal and the status quo, and asked that some assistance be made in cash.

Cash would be more efficient in non-emergency situations, as food could be procured at cheaper prices, they said.

“We started negotiating our position here in Hong Kong and by the time we close this discussion this week we’ll know where we are exactly on the food aid,” Ugandan Trade Minister Daudi Migereko told IPS.

But while the food issue could be of benefit to some nations, other observers point out that the Europeans intentions may not be entirely noble, and they may be using the issue as a pretext to keep their own subsidies.

“The EU should not us food aid as an excuse to extend export subsidies,” said Phil Bloomer, a trade expert with Oxfam International.