TWN Info Service on WTO and Trade Issues (Nov05/12)

19 Nov 2005

Agriculture is the engine of the negotiations, stresses G20

In the aftermath of the failed Ministerial talks in London and Geneva on 7-9 November, some of the key WTO members made statements and held media conferences to explain their side of the story.

On 9 November, the G20 made a statement and also held a press conference in Geneva, which was addressed by the Brazilian Foreign Minister Celso Amorim and the Argentina Ambassador.

Below is a report of this G20 response. It was published in the SUNS on 10 November.

With best wishes
Martin Khor

Agriculture is the engine of the negotiations, stresses G20

By Kanaga Raja, Geneva, 9 Nov 2005

Agriculture lies at the centre of the Doha Round and is the engine of the negotiations, the Group of 20 developing countries stressed on 9 November in a Ministerial press statement.

In what appeared to be a response to the efforts of the US and EC to link high expectations of theirs in Non-Agricultural Market Access and Services with minimal movement in agriculture, the G20 Ministerial press statement said: "Additional movement in agriculture, in line with the Doha mandate and the July Framework, would find a response in terms of proportionate contributions in other areas of the negotiations.

"Reaffirming that agriculture remains the main focus of the G20, the Group considers it to be contrary to the Doha Mandate to expect that linkages with other negotiating fronts could lead to unbalanced results for developing countries in the negotiations."

The G20 statement was released just as a mini-ministerial 'Green Room' meeting of some 28 countries was held Tuesday and Wednesday at the WTO, which was convened by the WTO Director-General Pascal Lamy in his capacity as Chair of the TNC in an attempt to provide some political momentum for the preparatory process for the Hong Kong meeting.

The Geneva meetings were preceded by a mini-ministerial meeting in London Monday involving the EU, the US, India and Brazil.

The G20 developing countries had several ministers and vice-ministers present in Geneva Tuesday and Wednesday where they had their meetings.

The G20 statement said that its members share a firm commitment to special and differential treatment to developing Members to preserve their food and livelihood security and fully take into account rural development needs.

"We are at a crucial moment in the Doha Round. A month from the Hong Kong Ministerial Conference, we face huge gaps in negotiating positions. More disturbingly, signs of movement on the part of developed countries - mainly responsible for trade distortions and protection - have been scarce and insufficient."

The G20 said that it had presented proposals in all three pillars of the agricultural negotiations. They conform strictly to the Doha Mandate and the July Framework and represent a genuine middle ground. They remain on the table.

The October 28 proposal by the European Union falls short of responding to the G20 proposals. It provides for only marginal improvement in market access, the G20 said, adding that in order to be meaningful, the average cut for developed countries should be, at least, 54% as proposed by the G20.

In domestic support, the G20 said, "we similarly see that the US proposal falls short of responding to G20 proposals." There must be "real cuts" in all forms of trade-distorting domestic support and effective new disciplines.

On export competition, the G20 statement said, "the credible end date is still missing in the proposals presented so far. The G20 has proposed that all forms of export subsidies should be eliminated no later than 2010."

Furthermore, the developed members' proposals have not incorporated adequately Special and Differential Treatment (SDT) for developing countries.

The G20 reaffirmed that SDT is an integral part of all areas of the negotiations. In particular, Special Products and Special Safeguard Mechanism must be addressed with a view to a successful outcome in Hong Kong. It is also essential to obtain concrete results on cotton in the context of the 6th Ministerial conference, and address issues related to LDCs and recently acceded members.

The challenge faced by all Members in the short time left up to Hong Kong is to work with realistic expectations without lowering the level of ambition of the Round, the G20 said.

At a press briefing Wednesday, speaking momentarily only for Brazil, Foreign Minister Celso Amorim said that during the mini-ministerial meeting in London, Brazil did give some signals of things that were within the realm of possibilities, provided that there was real progress in agriculture. But that just fell on deaf ears, he said.

One of the major partners said that the signals were a positive gesture, but the other major partner did not react at all. It just reiterated the proposal it made before, which Amorim said, is totally unacceptable for the majority of developing countries.

In this respect, he pointed to the numerical targets in services and the kind of cuts in industrial tariffs that would imply a cut of 75% for Brazil, at the same time as Brazil would be getting a 39% cut in agriculture.

"At this stage, we are in a very difficult situation," Amorim said.

The G20 wants a round that is meaningful in that it goes a long way to eliminating or substantially reducing the most distorting element in world trade, which is agricultural subsidies and other barriers to trade.

"What we can't accept is an imbalanced result. We can't accept that more will be done by developing countries, in relation to industrial goods where we have been working for 50 years, than is being done by developed countries in agriculture which has been lagging behind all these years."

In response to a question, Amorim said that during the meetings, the US Trade Representative had indicated that the G20 proposal on market access in agriculture was a good proposal. On the other hand, Amorim said, the EU proposal on market access is much below the G20's expectations and is much below what is needed to have substantial improvements in market access.

The US proposal on domestic support while still leaving some 'water', has some constraints that will limit what is possible for the US to do up to a point. Amorim mentioned the additional criteria in the Blue Box and the concept of overall support where there may be some 'water', but on the Amber Box there is a real cut. "It's a mixed bag," he said.

While both the EU and the US need to move in agriculture, the EU move in particular is insufficient and below the expectations of everyone else.

"Realistically, what is being asked in terms of services and NAMA, is not to be obtained. Its just to create difficulties so that we can't move on agriculture," Amorim said.

Ambassador Alfredo Chiaradia of Argentina said that the G20 was in a way frustrated at this juncture, as the G20 and the international community were expecting full modalities for Hong Kong.

With respect to why members have gotten into this situation, Chiaradia reiterated the G20 statement that said that expecting linkages with other negotiating fronts could lead to unbalanced results for developing countries.

He explained that the last proposal from the EU on 28 October, while being constructive in terms of market access in agriculture, came with such difficult strings attached that it made it impossible to fly.

He said that the EU proposal crossed four 'red lines': First, was differentiation among the developing countries, which is a very contested concept in the WTO; Second, was the violation of special and differential treatment and the concept of less than full reciprocity (for example, 100% capping of tariffs for developed countries in agriculture and a cap of 15% in NAMA for developing countries); Third, was in reference to paragraph 49 of the July 2004 framework on issues of interest but not agreed such as geographical indications and export taxes; Fourth, was numerical targets in services.

"When you have all these elements tied to agriculture, it invalidated the whole thing. Unfortunately, it was clear from the indications by the EU that that was the bottom line," he said.

"You can't speak of a bottom line in those terms and speak about ambition at the same time. They don't fit," Chiaradia added. +