TWN Info Service on WTO and Trade Issues (Oct04/7)

7 October 2004

Third World Nework



The first series of informal and formal meetings on agriculture since the July Package was adopted on 1 August started at the WTO on 6 October, with several groupings of members giving their views on how the overall negotiations on agriculture should proceed.

The informal 6 October meeting was on general approach to the future negotiations.  On 7 October there will be discussions on a list of topics selected by the Chair of the Agriculture negotiations.  There will then be a formal session on 8 October.

Below is a TWN report by Goh Chien Yen on the first day of the agriculture meetings.

With best wishes

Martin Khor







TWN Report by Goh Chien Yen, Geneva, 7 October 2004


The WTO is having its first series of meetings on agriculture since the adoption of the July Framework on 1 August 2004.  An informal special session on agriculture is being held on 6 and 7 October which will be followed by a formal session on 8 Oct

During the informal meeting on 6 October, the WTO Members made general comments on Annex A on agriculture of the July Framework,  and on how the work should proceed, and they will respond to a list of “technical issues” provided by the Chairman of the agriculture negotiations (Tim Groser of New Zealand)  on 7 October.


On Process

The Chair acknowledged that members had various views on the working process. Nonetheless he told members that there is recognition of the need to start somewhere and that a clearer working method will evolve over time.  In this regard, the chair informed the members that he would take the lead and asked to be given some flexibilities in moving the work forward.

Several delegations took the opportunity to highlight some of their concerns with how the negotiations will be conducted. Switzerland, speaking on behalf of the G10 underscored the need for the process to be transparent. They pointed out that this is all the more crucial since the negotiations are now in the phase where specific commitments are being discussed. “It is of utmost importance that Members share the same  sense of ownership with the outcome of the negotiations. And it is inconceivable that this new sense of ownership can be created through a process like the one that led up to the July Framework where a handful of Members played a disproportionate role in the negotiations.”

Indonesia speaking on behalf of the G33 also made the same argument that “it is essential that future negotiations ensure the participation of all WTO members.”

Kenya and several other members mentioned the need for a clear schedule of meetings and issues to be discussed to be established well in advance for the negotiations. Kenya pointed out that it would be very difficult for small delegations to respond and participate effectively in the negotiations, if notice of the meetings and the issues to be discussed are given in installments. There must be a clearer timetable of meetings and the issues that will be discussed over the next few months.

The chairperson said that he would strike a balance between keeping the agenda flexible and giving delegations advance warning. The chairperson said he would have to strike a balance between organizing the talks flexibly and setting up a structure that allows delegations to prepare in advance for the topics to be discussed.

The EU suggested that in order to speed up work, some working groups could meet in between the negotiating sessions. However Egypt reminded members that small delegations should not be over-stretched.


Views of members on the agenda and various issues

There was extensive discussion on the agenda and how work on the various issues should proceed.  Ambassdor Sun of China presented a rather detailed statement on behalf of the G20.  It stressed that  “all issues included in the framework must be dealt with” and it is “not a matter of addressing some issues initially to the detriment of others.”  There can be no hands-off technical list as this would reflect certain preferences and impose a biased approach to negotiations.  “Everything must be tackled in parallel; even the toughest issues must be the object of an exchange of ideas, presentation of proposals, data and the elaboration of studies....There can be no left-overs otherwise we run the risk of of a déjà vu scenario, where time constraints impede desired results due to no time left to tackle the core issues in agriculture such as the blue box and sensitivities.”

Republic of Korea proposed that it would be better to deal with less controversial subjects first in order to start creating “building blocks”.

However, the G20 said that if any order is required for the practical organization of the work, “it should proceed from the general to the specific, from the rule to possible exceptions, and not the other way round...The fundamental point is that a list of tasks cannot be drafted without reference to the central issues in the negotiations.”

In this respect, the G20 proposed that the work should focus on “issues that relate to the most trade distorting policies in all three pillars of the negotiations.”

In relation to domestic support, according to the G20 the “operational concept to be taken up in this pillar” as established in the framework are “cuts, disciplines and monitoring.”

Regarding cuts, the G20 pointed out that “the concepts of overall cut,...the banded approach for overall and AMS cuts and the notion of product specific cuts were developed .”

The concept of overall cut contained in Annex A of the framework should be given a concrete meaning, the G20 argued. In this regard, the G20 emphasized that  “both the starting and ending point of the cut should be technically and politically credible.”

The G20 also challenged the appropriateness of the Chairman’s decision to focus on the issue of de minimis support of developing country members for the informal special session. They highlighted the fact that “95% of the total domestic support provided to agriculture globally go to farmers in OECD countries, while the amount of resources provided by developing countries mainly through de minimis is infinitely smaller than that of developed countries. Why then should we start discussions on de minimis of developing countries?”

With regards to export competition, the G20 said that discussion in this pillar “revolved around the issues of credible end date, parallelism and monitoring.”

The G20 said negotiations on the schedule for eliminating export subsidies remains open.  However, it argued, it is important to have a “standstill observed in this pillar, so as to safeguard the reform process from backtracking.” They said “pending the complete elimination of export subsidies, the introduction of any new programs or the grant of export subsidies for products that no longer benefit from them would be contrary to the spirit of reform.”

On the market access pillar, the G20 emphasised that “the tariff reduction formula is the core element for the attainment of the mandated objective of substantial improvement in market access.” At the same time, the G20 underscored that “the Framework contains key elements to that effect such as the need to take into account different tariff structures, the need to ensure food security and livelihood concerns of developing countries’ rural populations and the concept of proportionality.”

The G20 then proposed that the work in the upcoming months should be to “develop technical elements that will make it easier to arrive at the formula” after which “work on the elements that qualify the reduction formula” can begin, while recognizing that “the design of the tariff reduction formula will involve important political elements.”

On the issue of Special Products (SPs), Indonesia, speaking on behalf of the Group of 33, stated that it “believes that paragraph 41 (of Annex A of the July Framework) has the potential to provide much needed policy space for developing countries, to implement enabling policies to protect and improve food security, rural development and rural livelihood. It is also the hope of the G33 that SPs can contribute to safeguarding developing countries farmers from the imbalances in agriculture trade”.

In this connection, the G33 “is of the view that the call to provide more flexible treatment in paragraph 41 of Annex A, must be translated to mean that there will be no tariff reduction or TRQ expansion for SPs. Moreover, the selection method for SPs which needs to be further specified must ensure that developing countries are provided with the flexibilities that will enable them to select the products which are deemed to be most important to their development needs”, Indonesia added.

On the issue of Special Safeguard Measures “the G33 believes this is also of critical importance to protecting the development needs of developing countries. We welcome the call in paragraph 42, which states that SSM will be established for developing countries. The G33 holds the view that SSM must be the mechanism that can effectively safeguard developing country markets against import surges. Furthermore SSM must also be inherent to the Agreement on Agriculture available to all developing countries,” Indonesia submitted.

To this end, said the G33, “the priority is to start work on the mechanisms of this safeguard and underscored that the need to “ensure that SSM that will be established is simple to use, effective and transparent, avoiding cumbersome implementation method of the previous safeguard mechanism.

Nigeria speaking on behalf of the African Group stressed the urgency of the cotton issue and called for the sub-committee on cotton to set up quickly and said that the group would submit proposals on this. The Chair agreed and welcomed the ideas from the African Group. He added that he would need help in setting up the committee. Benin emphasized that it had agreed in June to discuss cotton in the agriculture talks on the understanding that the outcome would be substantial. Benin and the Africans submitted that the sub-committee should discuss both the development and trade aspects of the cotton issue.

Other the subjects countries mentioned as needing technical work were:

geographical indications(EU), tropical products and crops grown as replacements for illicit narcotics (Colombia, Ecuador), and preferences.  Jamaica said that it remains unconvinced that developing countries could benefit unless the issue of preference erosion is also dealt with.

Several members including the G20 were of the view that the work should aim at finalizing modalities in agriculture for adoption at the Hong Kong Ministerial Conference in December 2005.  For the G20, “It is not a question of setting stringent datelines, but working with a foreseeable negotiating horizon.” Australia said that preparing modalities for adoption at the ministerial would be the working hypothesis.

The EU observed that December 2005 is not as far away as might appear and said members will have to get down to work straight away. Members who referred to the ministerial conference also recognized that setting unrealistic deadlines would cause problems. Kenya said a good deal should not be sacrificed simply in order to meet deadlines

The special session will continue informally on the 7 Oct to consider the technical issues listed by the Chairman. They are:

·        Identify technical issues for the review and clarification of the Green Box

·        Discuss the technical issues, including definitions relating to the following elements of paragraph 18 - export credits, export credit guarantees or insurance programs; trade distorting practices with respect to exporting STEs (State Trading Enterprises) and food aid practices.

·        Discussion on the conversion of non ad valorem tariffs  for the purposes of the tiered formula for market access

·        Establishment of SSM.