URUGUAY TO CHALLENGE US RICE SUBSIDIES

On 26 July, the government of Uruguay confirmed that it had taken the political decision to challenge US rice subsidies in the WTO. Although it is yet to file a formal complaint at the WTO, the government indicated that it had accepted a petition from domestic rice farmers claiming that the US is illegally subsidising its rice growers with direct payments, countercyclical payments and marketing loans. Uruguayan rice producer groups claim that US subsidies depress international rice prices and make it impossible for farmers elsewhere to compete fairly on the global market.

Uruguayan WTO Ambassador Guillerme Valles Galmes said that no timeline had been established for filing the complaint. As per WTO rules, his government would first have to seek consultations with the US.

Trade observers have noted that the decision comes at a time when the Doha Round agriculture negotiations -- which could potentially lead to disciplines on such subsidies -- are proceeding slowly. Valles Galmes has denied that it is an attempt to inject momentum into the faltering talks. Nonetheless, Pedro Camargo Neto, the Brazilian lawyer and former senior government official who engineered his country's successful cotton and sugar disputes against the US and the EU respectively, said that the timing of this potential WTO dispute could help spur progress in the negotiations, since the US has not moved on the issue of domestic agricultural subsidies.

Brazil, the traditional destination for the bulk of Uruguayan rice exports, has become increasingly self-sufficient in rice production, driving the smaller country to seek out new markets.

Not surprisingly, US rice growers did not welcome Uruguay's announcement, warning that a reduction in government payments would eventually lead to "higher food prices at the grocery store."

The US is the third largest rice producer in the world and Uruguay the seventh.

ICTSD Reporting; "Uruguay to Take Rice Case to WTO," Latimes.com 28 July 2005; "US faces fresh challenge on farm subsidies," Financial Times 28 July 2005; "Uruguay to file case against US rice subsidies at WTO" Yahoo Singapore Finance 27 July 2005; "Taking Brazil's Lead, Uruguay Prepares WTO Complaint Against U.S. Rice Subsidies," WTO Reporter, 26 July 2005.

DATA CITED AS BIOTECH CASE DELAYED AGAIN

The WTO panel considering the complaint brought by the US, Canada and Argentina against what they allege is a de facto EU moratorium on granting approval to new genetically modified organisms (GMOs) has once again postponed its ruling on the controversial case. The panel's chair, Christian Haberli, announced in a letter to the parties on 28 July that it would not deliver its preliminary report to the parties until early October. This additional delay means that the final ruling will not be available to WTO Members until the end of December 2005, more than two years after the panel was created.

Although the letter did not explicitly state the reasons for the delay, sources suggested that the reasons cited when the report was last pushed back -- the enormous volume of material to be considered, the complex nature of the product applications that have been challenged, and new issues raised by parties and the experts commenting on the case -- were once again to blame for the postponement (see BRIDGES Weekly, 1 June 2005, http://www.ictsd.org/weekly/05-06-01/wtoinbrief.htm). The final ruling will, according to the timeline presented in the statement, be delivered at approximately the same time as the WTO's December Ministerial Conference in Hong Kong, which could give a high profile to the panel's decision on the legality of EU GMO regulations.

Greenpeace activists in Geneva on 28 July warned that the decision could potentially impact consumers' right "to say 'no' to genetically modified (GM) food." "Governments must not let the WTO overrule public opinion, environmental concerns, national or international laws," said Daniel Mittler, the environmental group's trade policy advisor.

ICTSD Reporting; "Flooded With Data, WTO Panel Delays EU GMO Moratorium Ruling Until End '05," WTO REPORTER, 28 July 2005; "The right of consumers to say 'no' to genetically modified (GM) food," GREENPEACE PRESS RELEASE, 28 July 2005.

GC: INCOMING D-G LAMY ANNOUNCES TEAM OF FOUR DEPUTIES

Incoming WTO Director-General Pascal Lamy made his first formal appearance in his new role at a 29 July meeting of the General Council. The Frenchman, who will formally start his new job on 1 September, asked Members for their help in bringing the Doha Round negotiations to a successful close.

At the gathering, Lamy named his team of four Deputy Directors-General: Chilean WTO Ambassador Alejandro Jara, Rwandan WTO Ambassador Valentine Sendanyoye-Rugwabiza, Harsha Vardhana Singh of India, and current Deputy Director-General Rufus Yerxa of the US. Singh is a former advisor to the Office of the WTO Director-General and currently a senior official with India's telecom regulatory authority. They will start their terms of office on 1 October.

Ambassador Jara is currently the chair of the Doha Round services negotiations. His potential successors in this capacity are said to include Tony Miller, head of Hong Kong's WTO delegation, and Ambassador Fernando de Mateo of Mexico.

Lamy met informally with trade ministers including India's Kamal Nath and the EU's Peter Mandelson during the week of WTO meetings that finished on 29 July. During the General Council meeting, he also announced that Arancha Gonzales, his spokesperson in his former role as EU Trade Commissioner, would serve as his chef de cabinet.

The General Council meeting also formally approved Hong Kong Commerce Secretary John Tsang as Chair of the Ministerial Conference in December, and confirmed that New Zealand's new WTO Ambassador, Crawford Falconer, would replace his compatriot Tim Groser as Chair of the WTO agriculture negotiations.

ICTSD reporting; "Lamy announces his four Deputy Directors-General," WTO PRESS RELEASE, 29 July 2005; "Impatience Up on Stalled WTO Trade Talks," ASSOCIATED PRESS, 28 July 2005; "Hong Kong Commerce Secretary elected chair of the Sixth Ministerial Conference," WTO NEWS, 29 July 2005.