Annan urges developed nations to dramatically reduce agricultural subsidies

United Nations Secretary-General Kofi Annan today appealed to the world’s developed nations to slash their agricultural subsidies, calling it a litmus test for a coherent policy towards developing countries.

“For many years now, developing countries have been encouraged to eliminate subsidies as a basic step in getting their fiscal houses in order, which in turn would help create the necessary conditions for growth,” Mr. Annan said in a message to a special high-level meeting in New York of the UN Economic and Social Council (ECOSOC) with international finance and economy ministers and world trade officials.

“Yet the developed countries persist with agricultural subsidies and tariffs of their own against the exports of developing countries, offsetting or even undoing the benefits of other forms of cooperation with those same countries,” he said in the statement delivered on his behalf by Deputy Secretary-General Louise Frechette.

“I urge developed countries to dramatically reduce agricultural subsidies, without delay,” Mr. Annan said. “This would help the world economy. It would remove domestic and international trade distortions. And it would provide a much-needed boost to the Doha (2001 World Trade Organization) negotiations, signalling to developing countries that they can still hope for the development round they were promised.”

The Secretary-General noted the present difficult international environment, including serious concerns about the economic impact of the conflict in Iraq, particularly on developing countries, the continuing weak recovery from the slowdown of 2001, and the significant rise in unemployment around the world.

“Households and entrepreneurs almost everywhere are concerned about their future and hesitant to make long-term decisions,” he said. “We must all do our part to rebuild global confidence.”

Today’s ECOSOC session with finance ministers returning from the World Bank/International Monetary Fund annual spring meeting in Washington and World Trade Organization representatives is part of the key follow-up role assigned the agency by the Monterrey Consensus, which established a working agreement on development principles between developing and developed countries.

The Consensus was adopted last year by the International Conference on Financing for Development in Monterrey, Mexico, which recognized that development advances are a precondition for world stability and security.

Mr. Annan noted that a major gap in global governance identified by the Monterrey Consensus was that there was no convenient way for the key specialized multilateral institutions in the fields of monetary, financial, trade and development issues to come together and explore ways to work with each other and reinforce each other's actions.

“The United Nations is the natural home for that discussion, and this meeting is an attempt to provide precisely such an opportunity,” he declared.