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TWN Info Service on WTO and Trade Issues (June06/20)

22 June 2006


ACP submits wide-ranging paper on agriculture modalities


On the eve of the issuance of a draft modalities paper on agriculture, the ACP Group has submitted a paper updating its position on various issues in agriculture market-access modalities.

The Group emphasized that the modalities should be all-inclusive and should include all issues of interest to ACP.

On the tiered formula for tariff reduction, the ACP proposed a formula in which developing countries would have four thresholds of over 150%; 100-150%; 50-100% and 0-50%. There would be liner cuts of 30, 25, 20 and 15 per cent respectively for tariffs within these thresholds. The overall average cut for developing countries would be a maximum of 24%.

Below is a report on the ACP proposal.


With best wishes
Martin Khor
TWN

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ACP submits wide-ranging paper on agriculture modalities

By Martin Khor (TWN):  Geneva, 20 June 2006


On the eve of the issuance of a draft modalities paper on agriculture by the Chair of the WTO's agriculture negotiations, the ACP Group has submitted a paper updating its position on various issues in agriculture modalities.

The ACP Group's paper, dated 19 June (JOB(06)/195) is in the form of comments on the reference paper of the Chair (Crawford Falconer) on possible modalities on market access.

The Group emphasized that the modalities to be agreed upon in Agriculture, should be all-inclusive and should include all issues of interest to ACP. Indeed, only a fair, equitable and balanced outcome, which has fully operationalized S&D elements will be conducive to an acceptable outcome, it said.

On the tiered formula for tariff reduction, the Group responded to the Chair's comments regarding the "comfort zone" for Members by stating that "for the ACP, this zone is clearly very "south" of the G-20 position, in fact closer to the ACP position, which addresses our concerns both from the domestic and preferential access perspectives."

The ACP expects that its position (reflected in its market access paper of

28 October 2005) be fully taken into account in defining the middle ground.

In that paper, the ACP proposed a formula in which developing countries would have four thresholds of over 150%; 100-150%; 50-100% and 0-50%. There would be liner cuts of 30, 25, 20 and 15 per cent respectively for tariffs within these thresholds. The overall average cut for developing countries would be a maximum of 24%.

The ACP's October 2005 paper also has proposed thresholds and cuts for developed countries, with an overall average reduction of 36%.

In its 19 June 2006 paper, the ACP said other elements it wants to be taken into consideration in the modalities on tariff reduction formula include:

-- The issue of proportionality, which should be achieved by guaranteeing that the overall outcome of tariff reduction commitments by developing countries is lower than that required from developed countries;

-- The specific situation of developing country Members with either high ceilings or homogeneous low bindings; and

-- Possible approaches to address the concerns of developing country Members with tariff ceilings and homogenous low bindings, include:

(a) These Members will be subject to the overall average reduction only, keeping in mind the need for a fair and equitable outcome and their capacity to contribute to the reform process.

(b) They will distribute their tariff lines across the lower tiers of the formula on the basis of their own assessment of sensitivities.

( c) Irrespective of the thresholds for the tiers to be agreed, they will not be expected to undertake the level of cuts required in the highest tiers.

On the proposal for a tariff cap, the ACP said the concept of tariff capping is prejudicial to development concerns of the ACP. It suggested that there be no tariff capping by asking for the deletion of para B5 of the Reference paper which suggested the levels in which tariff caps should be placed.

On sensitive products, the ACP said the designation of preferential products as sensitive products by the preference-granting countries would to some extent contribute to addressing the problems of preference erosion. The ACP therefore requested that this issue be fully taken into account when designating sensitive products. It added that any TRQ expansion should not be to the detriment of their existing preferential TRQs.

The ACP paper also supported the proposal for Members to engage with commodity dependent producing country Members to ensure that satisfactory solutions are found to the problems of these Members, and that provision for suitable procedures for negotiations on the elimination of non-tariff-measures affecting trade in commodities be made.

On Special Products & Special Safeguard Mechanism, the ACP reiterated the great importance it attaches to provisions on SPs and SSM and fully supported the comments of the G-33 on paragraphs 17-26 of the Chairman's reference paper.

On Preference Erosion, the ACP said the language contained in para 30 is a useful basis for discussion. It proposed the following language to replace the existing para 30:

"30. In recognition of the importance of long-standing preferences, preference erosion associated with the products and markets listed in [Annex G] shall be addressed by the preference-granting Member:

(a) applying a lesser reduction of [ ] percent of the appropriate reduction under the tiered formula; and

(b) wherever relevant, any bound in-quota duty shall be eliminated taking into account the interests of preference receiving countries; and

( c) implementing the tariff reduction over an additional period of [ ] years [with the first year of the implementation deferred by [ ] years]; and

(d) to the extend technically feasible, maintaining the preference margin; and

(e) providing improved market access opportunities for non-preference-receiving products which are also of vital export interest to preference receiving Members, to the extent possible.

31. Preference receiving Members shall also be provided with targeted technical assistance, including additional financial and capacity building assistance, to help address supply-side constraints and to promote the diversification of existing production in the territories of preference receiving Members".

The ACP also said it is currently finalizing its list of products relating to long-standing preferences, which will be submitted shortly. It is proposed that the ACP list replaces the current Annex H of the Chairman's reference paper.

The ACP also fully supported the LDC position on paras. 35 and 36 of the Chairman's consolidated reference paper.

On cotton, the ACP said the developed countries together with the developing countries that are in a position to do so shall give duty and quota free access for cotton exports from least developed countries (LDCs).

The developing countries that are not in a position to give duty and quota free access for cotton exports from LDCs undertake to facilitate their imports of cotton from the LDCs.

The ACP also proposed that the developed countries also undertake to grant duty and quota free access for cotton exports from the developing countries. These commitments shall be fully applicable as of the conclusion of the negotiations.

 


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