TWN Info Service on WTO Issues (June04/7)

15 June 2004

Third World Network


At a press conference on 12 June, Ministers of the Group of 20 developing countries defended their market access proposal, which is in the form of elements for a framework.

According to them, this was a better approach than the blended formula that the US and EU had put forward and which is contained in the Debrez text in Cancun.

The G20 held a Ministerial meeting in Sao Paulo on 12 June on the eve of UNCTAD XI.

Below is a report of the press conference.  In another report, we will summarise the G20 Ministerial Communique and the presentations by the Brazilian and Indian Ministers at the meeting.


With best wishes

Martin Khor




TWN Report by Martin Khor, Sao Paulo 12 June 2004

Leaders of the Group of 20, at a press conference after their Ministerial meeting today, stressed that their proposal on market access at the WTO agriculture negotiations was more appropriate than the United States-European Union proposal which they said contained “fatal flaws.”

They were responding to questions raised as to whether the G20’s proposal, which contained key elements on market access, was an adequate response to the “formula” that the US-EU had put forward.

“Regarding comments that there is a formula proposal, and now there are elements, I must say that formulas are abstract if they don’t have underlying elements supporting them,” said Brazilian Foreign Affairs Minister Celso Amorim.

He added that the G20 proposal spelt out elements which contained both rules and exceptions, for example the principles of progressivity and bands for tariff cuts, and exceptions, even for some developed countries.  But the “blended formula” proposed by the EU and US was the rule (without exceptions).

He also said there was a false idea about the blended formula as it has never really been a formula per se, just a presentation for doing nothing. 

The G20’s approach was “to try to have an agreement on essential elements that is in our interests and the interests of others too.”  This approach includes high cuts for high rates, and recognition of the need for differentiated treatment for developing countries, especially those with large rural populations.  “These elements can help us reach a formula.”

“What we have done in market access is to offer the elements, and we can build on them for an architecture to be put in  place.”

He added that many other countries too agree that “if there is no agreement on thye basic elements, then you can’t have a formula.” 

[Earlier, at the G20 meeting, Amorim had said the G20 proposal demonsrtaed to WTO members the “fatal flaws” of the blended approach.]

The explanation by Amorim and other G90 Ministers came in the wake of reports that the major developed countries are criticizing the G20 market access paper for being too general and not precise enough, unlike the EU-US proposal which contains the “blended formula” for tariff cuts.

At the Group of 5 meeting on Sunday (involving US, EU, Brazil, India and Australia) the US in particular is expected to criticize the G20 paper and to suggest that the G20 should come up with a formula.

At the press conference, other G20 Ministers also defended the G20 market access paper whilst criticizing the blended approach.

The Argentinian Foreign Minister said that the blended formula did not generate meaningful market opening.  So, at this stage, “we shouldn’t have new formulas, but we should put forward concepts to make our views heard.”

He said the G20 proposal has clear-cut principles, including an approach to tariff reduction, and the concepts of flexibility and less than full reciprocity.

“We should first discuss and agree to concepts, then only discuss formulas.”

He called for “parallelism” in all three pillars, including market access, and not just in export competition.

Indian Commerce Minister Kamal Nath said:  “I have been asked all about market access today but not on domestic support and export subsidy.  All three are integrated and do not stand alone.  The G20 paper on market access addresses India’s concerns like food security and livelihoods.

“Agriculture is a way of life in India and these concerns have been brought out in the G20 paper.  At the same time we want to see domestic support and export subsidy move at the same pace as market access.  As Minister Amorim has said, the G20 is a rare group of divergenmt countries with cohesive interests to move forward to a framework agreement and the G20 will work on a paper on domestic support and export subsidy too.”

Nath also said the G20 paper, which contains the elements of proportionality, less than full reciprocity, special and differential treatment, substantial progress in domestic support,  harmonises India’s concerns with those of others, and the paper was acceptable to India.

Amorim said the only actual advance since Cancun is the possibility to do away with export subsidies.  But the offer in the Lamy-Fischler letter had to be consolidated as it was predicated on some conditions, which should not be a pretext for not moving forward.

He said for the first time the elimination of export subsidy is being discussed by the EU.  But they want full parallelism in export credit, food aid and state-owned enterprises.  In the meeting of the G5 the following day, he said, Brazil would agree that there should be parallelism but the meeting would have to discuss how to establish what is the subsidy element of these other aspects.

“We’ve made progress on export subsidy, but we have to discuss what the EUY and US mean by parallelism so that this won’t be used as an excuse not to move.”

As for domestic support, “we haven’t moved significantly,” said Amorim.  He said there should be reduction of total support, affecting the blue, amber boxes and de minimis, and a capping of the blue box.  “There should not be an excuse to move subsidies from the amber to the blue box.”

Amorim said the cotton case that Brazil brought against the US in the WTO  shows that the cotton subsidy is not compatible with the WTO.   “We cannot have substitution of one subsidy by another.  The criteria must be clearly defined.”

The Nigeria Commerce Minister said the G20 has survived as the members are committed to be united and the group has pioneered to being the issues to light.  “All of us are developing countries, some are weak and vulnerable with two thirds the population in rural areas, it is implorant we work together.”

The South Africa Trade Minister said the cooperation between the G20 and the G90 is important as developing countries, broadly speaking, have a common agenda.  But the developing world is diverse, with different capacities.  The G20 constitutes itself as a flag bearer but recognizes different categories of countries, and thus the G20 takes on issues that are important for the G90 countries, such as S and D.