G8 to agree to open trade, boost farm aid: draft text

WASHINGTON (Reuters) - Leaders from the Group of Eight industrialized nations will agree to fight trade protectionism and mobilize billions over the next three years to boost agricultural investment in developing countries, according to a draft communique obtained by Reuters on Monday.

The G8 summit will convene in L'Aquila, Italy, on Wednesday through Friday in talks that will focus on food security, aid, climate change, trade and the world economy.

The draft did not include a figure for how much funding the G8 would commit for agriculture because it is still under discussion, although development sources said it could be between $10 billion and $15 billion.

The G8 includes the United States, Britain, France, Germany, Italy, Japan, Canada and Russia.

According to the draft communique, leaders will agree that sustained and predictable funding, and increased targeted investments are urgently needed to enhance world food production.

"The tendency of decreasing ODA (official development assistance) and national financing to agriculture must be reversed," the draft said.

"We will aim at substantially increasing aid to agriculture and food security, including through multi-year resource commitments," it added.

They will also urge countries to remove food export restrictions or extraordinary taxes, especially for food bought for humanitarian purposes. They also called on countries to give advance notice before imposing any restrictions.

FIGHTING HUNGER AT ITS ROOTS

The focus on global food security has been proposed by the Obama administration following a food crisis last year in which prices for key commodities rose to record highs, increasing hunger and malnutrition around the world.

While commodity prices have since decreased from their 2008 peak, they remain volatile and high in historical terms.

Higher commodity prices also highlighted the chronic underinvestment in agriculture in developing countries as donors have increasingly turned their attention to fighting diseases like HIV/AIDS.

The G8 leaders will also commit to tackle increasing trade protectionism and to aim for "an ambitious, comprehensive and balanced" conclusion of the Doha trade round, according to the draft text, which did not include a date for finishing the Doha negotiations.

The G8 is expected to say that open trade flows and efficient markets could a play a positive role in aiding food security.

"Markets must remain open, protectionism rejected and factors potentially affecting commodity price volatility, including speculation, monitored and analyzed further," the draft communique said.

"We are therefore committed to reduce trade distortions and refrain from raising new barriers to trade and investment and from implementing WTO-inconsistent measures to stimulate exports," the draft said.

Protectionism has increased as countries have introduced measured to restrict trade in the face of an unprecedented economic downturn.

The World Bank identified the United States, Brazil, Argentina, India, Russia, France, Britain, Germany and Italy as among countries that have erected trade barriers since a meeting of the Group of 20 in April.

(Editing by Jan Paschal)