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Brazil, China, EU press US to step up in Doha negotiations

US stops development deals to state-owned firms worldwide
Washington (AFP) Sept 29, 2010 - A US government program has stopped granting development contracts to state-owned businesses from around the world in order to ensure fair competition, officials said Wednesday. The decision by the Millennium Challenge Corporation (MCC) was welcomed by Senator Jim Webb, who said it responded to concerns he had raised about US tax dollars funding the expansion of Chinese firms worldwide. The MCC, created by Congress in January in 2004, helps developing countries reduce levels of poverty as long as they meet performance criteria on the rule of law and democratic principles. Patrick Fine, the MCC's vice president for compact operations, told AFP the MCC adopted an amendment revising its procurement guidelines to exclude government-owned firms from competing for MCC-funded contracts.

"It became official yesterday," he said, adding the move is designed to ensure a "level playing field" for commercial firms from all countries. The MCC said it had noticed that a growing number of government-owned commercial enterprises were winning contracts. Webb, who is on a Senate panel on East Asian and Pacific Affairs, welcomed the MCC move. "I commend the MCC's prompt response to the concerns I raised in August, so that US tax dollars will no longer fund Chinese government-owned enterprises," he said in a statement. "These Chinese government-owned companies are designed to carry out that government's economic and political interests, and I do not believe that the US government should be financing such activity," he added.

Fine confirmed Webb's figures that Chinese government-owned firms had secured contracts worth more than 300 million dollars, making such firms the biggest recipient of MCC contracts funded with US tax dollars. Fine added that contracts had also been awarded to one Finnish state-owned firm and one Azerbaijani state-owned enterprires. But he said that 90 percent of the contracts are awarded to private enterprises, including those from the United States, competing through internationally competitive bids. The MCC said it has approved nearly 7.7 billion dollars in contracts that support agriculture, transporation, water supply, access to health and education, enterprise development and anti-corruption initiatives.
by Staff Writers
Geneva (AFP) Sept 29, 2010
Brazil, China and the EU pressed the United States Wednesday to show greater engagement in WTO talks on a global free trade deal amid concerns the world's biggest economy is failing in its leading role.

"Many members have taken note that, in the Doha Round negotiations, particularly over the past two years, the US seems to have stepped back from its due leadership role," said Chinese ambassador Sun Zhenyu, during a review of Washington's trade policies at the World Trade Organization.

While the United States is asking developing countries to make more offers to clinch a deal, it has "failed to indicate how it might improve its own offer on issues of concern to developing countries," said Sun, echoing concerns from Brazil.

The European Union also urged the United States to step up on the issue, "including by making a further contribution of its own" in the negotiations and "by being realistic in what it seeks from others."

"The US has been at the forefront of those who have recognised the value of an open, rules-based international trading order," said John Clarke, who heads the EU delegation in Geneva.

"Recently, however, we see some signs that this commitment and willingness to lead by example may be dwindling. This is of great concern," he told the WTO meeting.

Beyond the Doha talks, Washington also came under fire over various trade policies, with China especially critical of its handling of the economy and the dollar.

"We are very much concerned about how the US would take practical and responsible measures to prevent the dollar glut and maintain the stability of the currency," Sun said.

Washington's agriculture policies were another sore point, with the WTO secretariat calling for cuts in farm subsidies, saying that support for the agriculture sector was so "considerable" that it could affect market prices.

In a report on Washington's policies since 2007, the trade body said that while promoting its exports, the United States should also reduce "distorting measures ... including ... support for agriculture."

The WTO noted that support under the multi-billion-dollar 2008 Farm Act is mostly "linked to prices and or production."

Thanks to this support, "producers of cereals, oilseeds, and cotton are effectively insulated from market prices while sugar and dairy have market price support programmes," the WTO said.

"The large size of the agriculture sector means that the absolute amount of support is considerable, varies from one year to another depending on prices, and can affect world prices," it added.

Brazil also hit out against US farm policies.

"Agriculture accounts for only 0.8 percent of US (economic output) and it employs just 1.4 percent of its labour force," noted Roberto Azevedo, Brazil's envoy to the WTO.

"Nevertheless, this sector displays a considerable arsenal of trade-restrictive and distorting measures."

Azevedo pointed out that most of the subsidies are concentrated on crops such as cotton soybeans and rice.

"When prices drop, those subsidies will be in place again precisely at the moment when they will provoke the largest distortions and most damage to producers elsewhere," he charged.

Washington's farm subsidies are a key sticking point holding up long-stalled Doha negotiations for a new global free trade deal.



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UN environment chief urges recycling of key rare metals
Geneva (AFP) Sept 29, 2010
The UN's environment chief on Wednesday called for a global drive to recycle rare metals that have hit the headlines in a spat between Japan and China, warning that they are crucial for green technologies. Achim Steiner, executive director of the UN Environment Programme, said that demand for "rare earth metals" such as lithium and neodymium - used in batteries for hybrid cars or components ... read more







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