Geneva, 06/12/2001 (Agence Europe) - In Geneva on Tuesday the European Union unveiled its proposal banning the use of food aid for commercial purposes which will be discussed in the negotiations at the World Trade Organisation (WTO) that will continue until March 2003. The idea itself is nothing new - it dates from before Seattle even - but the EU has now put forward a concrete proposal incorporating the entire range of ways to meet this objective to the almost total satisfaction of the WTO member states (144 countries with the future adhesion of China and Taiwan) with the exception of the United States and Japan.
According to the European proposal, it would no longer be possible to provide food aid in the form of credits but rather in the form of donations in order to avoid increasing poor countries' debts. It would have to meet the needs of well defined groups of vulnerable people and should no longer be used as a kind of disguised export subsidy. The proposal also bans any links with other commercial exports - this is already laid down in an international agreement on food aid, but is not respected at the moment. The idea is to make the rule binding under the WTO. The EU is also recommending that food aid be supplied in the form of products bought locally or in the region in order to ensure they meet the needs of the beneficiaries and do not put local farming under pressure. According to Commissioner Nielson's services (which deal with development and humanitarian aid) more than 30% of the food aid provided by the EU is already sourced from local markets. The EU is proposing that food donations only be authorised as emergency food aid following requests by international organisations. In all other cases, food aid should be sourced on the spot.
The US and Japanese negotiators in Geneva warned about the potential delays that such a proposal might cause in getting aid to the people needing it. The EU delegation responded by presenting journalists tables using UN figures that clearly demonstrated that US aid rises when wheat prices are at their lowest on the world markets, and then falls back when the wheat price goes back up. The EU also pointed out that the United States have never attempted to hide the fact that they expect commercial payoffs when they provide aid. It is even frequently used as an argument in the US Congress to convince it to support aid projects. The annual volume of US aid is in the order of $2.3 billion, compared with EUR 1.3 billion provided by the European Union (around EUR 500 million in food aid proper and EUR 800 million as humanitarian aid).