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Agricultural compromise text is ‘fig leaf’ for Cairns

by Chakravarthi Raghavan

Geneva, 5 Oct 2001 - The Chairman of the WTO General Council, Mr. Stuart Harbinson of Hong Kong China last evening appears to have given to some 20 or so key delegations a text on the ‘agricultural mandate’ to be incorporated into the Harbinson draft for a Doha Ministerial Declaration, which though not so named, calls for a ‘creeping, comprehensive’ round of trade negotiations at the WTO.

Harbinson would appear to have ‘dictated’ the text or proposals to the delegations, but did not provide any text on paper, and suggested that it was not his own, but a text that he was testing out on various delegations.

The text he read out and taken down by the delegations present would in fact appear to be something evolved in talks ‘brokered’ by the United States, and involving the Cairns Group and the EC.

The text dictated by Harbinson, elaborating the para 11 of his draft ministerial declaration which had mainly ‘headlines’ for the elements under agriculture, said:

“1. We recognize the work already undertaken in negotiations initiated in early 2000 under Article 20 of the Agreement on Agriculture, including the large number of negotiating proposals submitted on behalf of a total of 121 Members.

“2. We recall the long-term objective agreed to in the mid-term review of the Uruguay Round to establish a fair and market-oriented trading system through a program of fundamental reform with specific commitments in order to correct and prevent restrictions and distortions in the agricultural markets. We confirm our commitment to this program.

“3. Building on the work carried out until today, we commit ourselves to comprehensive negotiations aimed at: i) substantial improvements in market access; ii) reductions of with a view to phasing out all forms of export subsidies; and iii) substantial reduction in trade-distorting domestic subsidies

“4. We commit ourselves to ensuring that special and differential treatment of developing countries shall be an integral part of all elements of the negotiations and that specific concerns of developing countries shall be effectively address.

“5. We confirm that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture.

“6. Modalities for further commitments, including provision of special and differential treatment, shall be established not later than [..... ]. Based on thee modalities, participants shall submit their comprehensive draft schedules no later than [....] The negotiations, including with respect to rules and disciplines and related texts, shall be concluded as part and at the date of conclusion of the negotiating agenda as a whole (# para 36 of the draft declaration).

“7. The question of the negotiating body will be addressed as a horizontal issue (# para 37 of the draft declaration)

In some oral, immediate reactions, the members of the Cairns Group, questioned the use of the term “phase-out” of export subsidies in the text read out to them, arguing that it was much weaker than calling for the elimination of such forms of protectionism.

For the EC ambassador to WTO, Carlo Trojan, said the Harbinson’s approach to export subsidies is unacceptable.

Though thus, both Cairns group members (both its developed country members like Australia, and the developing country members from Mercosur and Latin America) and the European Communities in their initial reactions said they still had problems, but this seemed to be more a case of shadow-boxing for public appearance, but a text which both would swallow (in return for the Cairns group supporting the new comprehensive round of negotiations including on the new issues).

For the moment, Japan and South Korea are raising objections, but the two may still fall in line.

The Harbinson-Moore approach seems to be to follow the same tactics that were adopted during the Uruguay Round - at Punta del Este, Montreal and Geneva (mid-term reviews), the abortive Brussels ministerial, and the post-Brussels ‘Dunkel text’ and the Blair House accords between the US and EC - which ultimately resulted in no substantial marketing opening benefits to the Cairns group developing country members, and ultimately found them facing not only the subsidised exports of the EU, but also the subsidised exports of the US (though called as matching export credits etc).

While some of the Cairns Group members professed to see some improvement in the Harbinson draft, over the positions of the EU so far, in refusing to accept any mandate calling for end to export subsidies, a careful scrutiny of the text (against the background of the Punta del Este text, the April 1989 Uruguay Round, mid-term review text on agriculture, the Dunkel draft final act text of December 1991, and the final text of the Agriculture Agreement (after the US-EC deals under the Blair House accord) suggest that these are mostly cosmetic.

In their final effects, they will turn out to be like stones thrown on water - sending out a lot of ripples and splashes, that will all dissipate.

The ‘skilfully’ drafted part in reality does not commit anyone in the foreseeable future to end their export subsidies in agriculture, but uses a choice of words to suggest this is what is being done.

It may perhaps enable some of the Cairns Group countries, in particular the Latin American members of the group, a kind of fig-leaf to claim back home - before their enterprises, parliaments and public - that in return for support to the EU for launching negotiations on investment and competition policy, and opening their markets for foreign suppliers for government procurement, they had gained a commitment to ending export subsidies.

Harbinson has called in heads of delegations to meet him on Sunday, where he is expected to convey to them his ‘proposals’, after the bilateral and other consultations he is having, on the parts of the draft declaration dealing with ‘implementation’ and ‘trips and health’.

Harbinson’s summing up statement, at the end of the statements and views of delegations at the informal General Council Tuesday and Wednesday on the draft ministerial declaration, where he said he would continue with bilateral and other consultations before putting forward a revised text, left the impression with most developing countries that he plans to concentrate on the areas of his text where he has mere given ‘reference points,’ and not any serious compromise talks on the areas where there is a sharp and polarised division - as in the new issues, Singapore and Geneva, including investment, competition policy.

Outside observers saw the text as one that would provide some kind of a ‘fig leaf’ for the developing country Cairns Group members, particularly from Latin America, to throw their support (or rather withdraw their objections) to the US-EC drive for a new round with new issues and some general negotiating objectives, ala Punta del Este 1986.

The one discernible tactic in the proposals is the aim at isolating and cowing down those resisting the ‘creeping agenda for a comprehensive round of negotiations’.

Without naming India, and a few others, who have taken a strong stand against the new issues and various other parts of the draft, and blaming one or two for not willing to ‘buy’ the “generous package” on implementation (though none of the developing countries in fact have supported it), the US and the EC in the General Council informal meetings have indulged in some ‘outbursts’, and warning these countries that they would bear a heavy responsibility if they did not change (and the Doha meeting ends in failure or is unable to launch the new round).

They, as also the WTO officials, have been spreading the view that if developing countries don’t accept the package on offer now on implementation, they would miss the bus for ever.

And as in the past, considerable amount of confusion and misinformation is being spread through the media, and backchat and background briefings of delegations to suggest that only one or two countries are opposing comprehensive negotiations.

That the majors (US and the EC), and their allies, engage in such tactics is part of the ‘international game’. However, other inter-governmental institutions, including those promoting developing country interests, appear to be doing the same - and they must succeed in alienating even the developing countries supporting them, without winning industrial country support. – SUNS4982

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

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