Wide gap on agriculture for Seattle draft

by Chakravarthi Raghavan

Geneva, 29 Sep 99 -- Considerable divisions, as a trade official put it, in approach, framework and content was evident Tuesday in the informal General Council (GC) discussions on mandated negotiations in agriculture, and the way this is to be included in a Ministerial draft Declaration for Seattle.

In opening the discussions, GC chair, Amb. Ali Mchumo, sought the views of delegations on: the use of Art.20 of the Agreement on Agriculture (AoA) which mandates further negotiations on the continuance of the reform programme; the reform programme to be negotiated to cover further reduction commitments, plus some review of rules and disciplines; coverage of all agricultural products; inclusion of the special and differential (S&D) treatment to developing countries; and specifying the stages and time-table for the negotiations.

It was a four-way split of interests: views of the Cairns Group and the United States; those of Europe, Norway, Switzerland and Japan; the views of net-food importing developing countries (NFIDCs); and that of other developing countries with large rural populations and their needs of rural employment, food security, and leeway for development of agriculture.

The Cairns group views were presented in a paper by Australia, the socalled leader of the group, which coincide with those of the United States which is not a Cairns group member but has policies orchestrated by Cairns group too. In addition to the formal proposals that have been put forward in the General Council, India also put forward Tuesday two papers, one on implementation issues of the AoA and the other on Food Security.

The Australian paper sets out the objective for the negotiations, the issue of S&D (both in terms of improved market access to developing countries, and their own commitments and concessions and technical assistance), the scope of negotiations in terms of substantial reductions in support and protection on exports, market access and domestic support and strengthened and more operationally effective rules and disciplines. Australia also sought "benchmarks" - setting out time-schedules for various stages of negotiations, and completing them by end 2002.

The US said in terms of objectives, there should be substantial reduction in tariffs, export subsidies and domestic support.

The US also wanted negotiations to ensure that trade in bio- technology (genetically modified, GM), products is conducted on a "rational basis" - presumably meaning not bowing to consumer demands and concerns, and rules to ensure importers cannot restrict or ban GM products.

As for S&D, in US view developing countries would benefit like others from a "market-oriented agriculture."

EU, Norway, Hungary, Czech republic, Switzerland and Japan argued that negotiations must be confined to what is strictly mandated (in AoA), and the declaration should say no more than what is in Art.20 (about continuance of reform process). Being more specific would involve negotiations before Seattle, instead of afterwards, and time was running short. In the view of importing countries protecting agriculture, Art.20 of AoA was a balanced negotiated package, and any further negotiations should be left till after Seattle.

The (core non-Cairns group) developing countries who spoke said developing countries had to be treated differently, and given greater flexibility. The present system was biased against them, setting much lower limits on "trade-distorting" subsidies they could use for rural employment, poverty alleviation and raising agricultural productivity. The export subsidies of the rich countries harm developing country exports, which in addition faced high import barriers.

In a paper on the AoA issues, in the context of the mandated negotiations in the Geneva Ministerial Declaration, India raised a number of implementation and other concerns that it has been voicing, and made a number of proposals:

* defining concrete and operational proposals for S&D, taking into account experience of developing countries in adapting the present reform process, their differing levels of economic development, role of agriculture in their economies with a large rural population, need for food security and dealing with vulnerability of agriculture sector in developing countries;

* the total of all domestic support in developed countries - in green, blue or amber boxes (fully permitted, actionable, and prohibited) should not exceed an appropriate proportion of total value of agricultural production, and with developing countries getting additional flexibility;

* if in calculation of AMS (aggregate measure of support), domestic support prices are lower than external reference prices (in order to ensure access of poor households for basic foodstuffs), and this results in negative product specific support, members should be allowed to increase non-product specific support by an equivalent amount; suitable measures should be adopted to take account of high levels of inflation while making domestic support notifications;

* tariff rate quotas (TRQs) should be abolished forthwith; if they are to be continued for a short transition period, their administration should be clearly laid down to provide trading opportunities to all members in an equitable manner, and discriminatory and non-transparent TRQ allotments should be disciplined;

* programmes responsive to requirements of developing countries, including any or all measures aimed at ensuring food security, particularly in the context of large agrarian economies, should be included in the 'green' box;

* a time-bound and comprehensive elimination of all export subsidies provided by developed countries, and such subsidies allowed only as an S & D provision for developing countries;

* any tariff reducing proposal or formula used during negotiations should provide certain flexibility to predominantly agrarian countries so that they could protect livelihood of rural populations from a surge in imports.

In a separate proposal on food security, India suggested:

* support for maintaining enhanced domestic production for domestic consumption in food-insecure countries (identified on basis of percentage of population dependent on agriculture for livelihood and number and percentage of undernourished population etc) should be entirely exempt from provisions of the AoA;

* developing countries with predominantly rural agrarian economies should be given greater flexibility to enable them to address non-trade concerns such as food security and rural employment; such support should be exempt from AMS; * greater flexibility to developing countries in areas of import restraint and domestic subsidy for support of subsistence and small-scale farming - with Articles 3 and 4 of the AoA being suitably amended; and

* developing countries with predominantly rural agrarian economies being allowed to use appropriate border measures and safeguard mechanisms as an S&D provision so as to minimise deleterious effect of possible surges of import on food security and rural employment.

In various other comments, relating to the EC view of need for "comprehensive negotiations" and the "mandate" in the AoA, a number of Cairns group members said that for further negotiations under Art. 20, they can't be asked to pay a further price of liberalisation. Any comprehensive negotiations should therefore involve going much beyond the AoA and Art 20 in liberalising agricultural trade.

Brazil said that agriculture was a 'make-or-break' issue in the ministerial. It was not possible to negotiate without clarity on what was being negotiated. Brazil also raised the issues of special safeguards and tariff rate quotas. Any 'single undertaking' would mean that everything had to be decided and concluded at the same time.

Indonesia, a Cairns group member, stressed the issues of S&D and non-trade concerns like food security. (SUNS4519)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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