TWN Info Service on WTO and Trade Issues (Sep05/1)

15 Sept 2005


On Tuesday 13 September the WTO resumed its negotiations after its summer vacation with a formal meeting on agriculture negotiations.

This meeting kicked off what is expected to be a very intense phase of negotiations on many issues between now and the Hongkong Ministerial in December.

The meeting was quite brief, ending before lunch. Those who spoke mainly reiterated the views they held before the summer break. The meeting was over by noon. The agriculture talks carried on in smaller groups or bilaterally later in the week, ending on Thursday 15 September.

One developing country Ambassador characterized Tuesday's meeting as a "warming up session", in which members were simply confirming their old positions, while waiting to hear what others had to say.

Casting a shadow over the meeting Tuesday and probably for the rest of the week was the high-level trade meeting between the US and the EU in Washington which is scheduled to discuss how the two majors are to proceed at the WTO, with agriculture being the key issue.

This article was published in the SUNS (South North Development Monitor) on 14 September.

With best wishes
Martin Khor


WTO talks resume with "warming up" meeting on agriculture
By Martin Khor (TWN), 13 September 2005

After its summer break, the WTO on Tuesday 13 September kicked off what is expected to be an intense period of negotiations with a formal meeting of the Committee on Agriculture in Special Session, at which members stated their concerns, without indicating any shift in known positions.

The new Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, had told members that he would give the floor to those who had "genuinely new things" to say.

However, those who spoke mainly reiterated the views they held before the summer break. But not many spoke, and statements were brief, so the morning meeting was over by noon. The agriculture talks will carry on in smaller groups or bilaterally this week. On Thursday morning and Friday afternoon, the meeting will re-convene at plenary level.

One developing country Ambassador characterized Tuesday's meeting as a "warming up session", in which members were simply confirming their old positions, while waiting to hear what others had to say.

Casting a shadow over the meeting Tuesday and probably for the rest of the week was the high-level trade meeting between the US and the EU now taking place in Washington. The meeting, attended by the US Trade Representative Rob Portman and EU Trade Commissioner Peter Mandelson, is scheduled to discuss how the two majors are to proceed at the WTO, with agriculture being the key issue.

Trade diplomats said that they do not expect the US and the EU to take any positions on agriculture at the WTO this week, unless they first reach agreement at their Washington meeting.

At the meeting Tuesday, several members called for the countries with the largest distorting policies to show leadership (referring to the Washington meeting), while stressing at the same time that the talks in Geneva have to be central to the negotiations.

Significantly, the US did not take the floor at the agriculture meeting this morning, and the EU only spoke briefly, without making any substantive point.

While many groupings flagged their different concerns at the meeting, one common theme among many delegations was the need for the negotiations to be more participatory and transparent.

The countries were alluding to the recent negotiations which mainly involved only the "five interested parties" (the US, EU, Brazil, India, and Australia) or an extended FIPS group (that included another eight or nine countries), while the rest of the membership were kept waiting for any outcome.

Several members Tuesday asked that the process be inclusive, transparent and bottom-up. This point had been stressed in the Declaration of the G20 Ministerial Conference held on 9-10 September in Bhurban, Pakistan and was repeated by the G20 in their statement Tuesday, as well as being mentioned by many others.

One diplomat, speaking outside the meeting, said that WTO members were uneasy about the exclusive way the agricultural negotiations had been taking place in the past, and that there would be problems if the majority are simply asked to endorse what a few major players had thrashed out among themselves. "They may find that many countries will not go along unless they have been given time to consider and the right to take part," he said.

According to trade officials, another common theme in the meeting was about the need to combine ambition and flexibility in market access. There were comments for and against the G20's proposals (made in July) that a cap be put on tariffs of both developed and developing countries (with a higher cap for the latter).

The G20 (with Brazil and Pakistan representing them) reported on the highlights of the group's recent Ministerial conference. They said their proposals are genuinely in the middle ground and aimed at creating consensus, and the onus is now on the major subsidizers to respond by agreeing to changes to their policies. This would be a pre-condition for success, they said.

The G20 expressed concern that some members are putting conditions on their willingness to change policies. It said this would be asking others to "pay" by making concessions in exchange for reduction of distortions by the major subsidizers. This, said the G20, would be penalizing poorer countries, which do not have distorting policies.

Pakistan, supported by some other developing countries, said that the text to be sent to ministers in Hong Kong in December should be agreed in good time before the conference so that members have enough time to study it.

China supported the G20 statement and said there is need for the negotiations to accelerate, using the G20 proposals on the table. It reiterated that as this is a development round, the concerns of developing countries should be given priority, including tackling subsidies which are distorting.

The Group of 33, represented by the Philippines, welcomed that the G20 Declaration mentioned its readiness to assist the G33 to develop indicators for developing countries' special products, and for its reiteration of the importance of special products and special safeguard mechanism as elements in the negotiations.

The African Group, represented by Egypt, stressed the importance of resolving the cotton issue as well as the erosion of preferences. It supported the G20 position for being a good compromise between offensive and defensive interests.

Benin, speaking on behalf of four African cotton producing countries, called for a change in the agenda of the Cotton Sub-Committee so that the African Group's proposed modalities, submitted in April, can be discussed more specifically.

The ACP Group, represented by Mauritius, stressed the need to resolve the problems caused to its members by the erosion of preferences.

Barbados, speaking on behalf of small economies, said that these economies need special and differential treatment in all pillars, that special products and special safeguard mechanism are very important and they wanted these issues to be seriously treated. It added that tariffs are the only tool they have to protect their agriculture sector and it is crucial that the tariff-reduction formula is flexible enough to meet the small economies' concerns.

Switzerland, on behalf of the G10 (a group of mainly developed countries with defensive interests in agriculture) stressed that progress in agriculture must go "hand in hand" with progress in other subjects, and it is key that there should also be parallel progress on all three pillars in agriculture and equilibrium between the pillars.

It objected strongly to the G20's proposal that there should be caps on tariffs. It said that different tariff structures have to be taken into account, meaning flexibilities built into the formulas used in each tier. The group said that it can accept a formula that is essentially linear, provided some flexibility is included.

Australia and New Zealand said the Cairns Group is working on the negotiations and called for leadership from major players. New Zealand proposed that this latest phase in the talks should start with the "core formula" for tariff reductions, sensitive products, and key issues in domestic support, particularly the Blue Box. This would include starting to talk about "numbers", New Zealand said.

The Chairperson, Ambassador Crawford Falconer, asked members whether the preparation for "modalities" requires a more comprehensive approach, instead of the "incremental" approach of trying to build up the agreement issue by issue.

He thought "we are obliged to have a fundamental change of gear", not just because of the urgency, but because the task now is to agree on the modalities, not the gradual creation of a first approximation, which had been the task before the summer break. He asked members three questions about how to proceed in order to achieve modalities in Hong Kong:

* Should the "incremental" approach be replaced by a more comprehensive approach that looks at a range of issues at the same time?

* Should this comprehensive approach include starting discussions on the level of ambition (the numbers to go into the formulas), and if so when?

* What are the real linkages and tradeoffs between the pillars and other issues, and when should this be discussed?

Ambassador Falconer said he recognizes there are a range of other subjects outside the pillars, such as special treatment for developing countries. He asked for replies or other responses to his three questions in the Thursday informal meeting.

Falconer added that for the rest of the week he intends to hold bilateral consultations with representatives of the various groups or with individual members. Informal meetings are planned for Thursday morning and Friday afternoon.

He said that while the next series of meetings is scheduled for the week of 17 October, in fact the agriculture Special Session should be seen as being essentially "on call" beyond this week's meeting. Members would need to be ready to meet and consult at short notice.

He warned that if there is no movement before the next scheduled agriculture week (17 October) then the target cannot be achieved.