Service on WTO and Trade Issues (Dec09/01)
responds to developed countries’ demands on agriculture
Geneva, 26 Nov (Kanaga Raja) -- The G20 developing-country grouping in the World Trade Organization (WTO) has voiced its position on a number of substantive issues for developed countries in the agriculture negotiations.
These positions included the stipulation of an ambitious result in cotton, tariff capping being an essential element of the agriculture negotiations, and firm opposition to the creation of new tariff rate quotas.
They also made clear that the December 2008 draft modalities text is the basis for the negotiations and represents the end-game in terms of the landing zones of ambition. While there could be marginal adjustments, it will be assessed in the context of the overall balance. They also opposed any selective reopening of any particular area of the modalities package.
The G20's views and positions were highlighted in a room document (JOB09/174) dated 20 November 2009.
According to trade officials, the document has been circulated and may come up for discussion among the membership in the week of 7 December.
The document also comes just before the seventh Ministerial Conference gets underway on 30 November. The G20 is holding a gathering of its Ministers on 29 November. It will also be meeting with the coordinators of the other developing-country groups on the same day.
In its document, the G20 said that it has addressed the current discussions on substantive issues in the Chair's consultations guided by two central principles:
(a) The December 2008 draft modalities are the basis for negotiations and represent the end-game in terms of the landing zones of ambition. Requests for marginal adjustments to those landing zones of ambition in the package will be assessed in the context of the overall balance of trade-offs, taking into consideration that Agriculture is the engine of the Round; and
(b) The draft modalities embody a delicate balance after eight years of negotiations. Any request for selectively reopening a particular area of the modalities package will necessarily affect that general equilibrium, which members should not disturb.
Turning to specific issues, the G20 highlighted the product-specific disciplines, namely, in the Blue Box, as well as the issue of cotton.
On the Blue Box head-room (paragraph 42, draft modalities text), the G20 said that this is clearly an issue of ambition, as it is paragraph 23 for AMS product-specific discipline.
[Paragraph 42 states: "For the United States, the limits to the value of support that may be provided to specific products under paragraph 35(b) above shall be [(110) (120)] per cent of the average product-specific amounts that would result from applying proportionately the legislated maximum permissible expenditure under the 2002 Farm Bill for specific products at an individual product level to the overall Blue Box limit of 2.5 per cent of the average total value of agricultural production during the 1995-2000 period. These product-specific limits shall be expressed in monetary terms at an individual product level, annexed in that format to these modalities and shall be bound in Part IV of that Member's Schedule."
[Paragraph 23 states: "For the United States only, the product-specific AMS limits specified in their Schedule shall be the resultant of applying proportionately the average product-specific AMS in the 1995-2004 period to the average product-specific total AMS support for the Uruguay Round implementation period (1995-2000) as notified to the Committee on Agriculture. These shall be tabulated by individual product in the Annex to these modalities referred to in the paragraph above."
[The preceding paragraph states: "The product-specific AMS limits specified in the Schedules of all developed country Members other than the United States shall be the average of the product-specific AMS during the Uruguay Round implementation period (1995-2000) as notified to the Committee on Agriculture. These shall be tabulated by individual product for each Member in an Annex to these modalities."]
G20 said that specific flexibilities for developed countries and those
specific paragraphs with flexibilities for the
The Group stressed that it has manifested on several occasions in the past that those country-specific demands for flexibilities in paragraph 23 and 42 are excessive and do not seem to be justified on technical grounds.
Nonetheless, the G20 said that it is prepared to work on the basis of TN/AG/W/4/Rev. 4 (December 2008 draft modalities text) for the product-specific disciplines under the assumption that the principles mentioned above are observed.
the issue of cotton, the G20 said that it has consistently supported
the demands of the Cotton-4 (
As expressed at the Twelfth Consultative Mechanism on Cotton (23/10/2009), the G20 said that it is particularly concerned that current substantive negotiations on cotton "seem to be deadlocked and even backtracking in recent consultations."
"There cannot be a final result for the DDA (Doha Development Agenda) negotiations without addressing Cotton ambitiously, specifically, expeditiously, in accordance with the Mandate," it stressed.
With regards to the issue of the extra number of sensitive products for developed countries, the G20 said that it has followed with concern the last discussion on requests for extra flexibility for specific developed countries in the guise of additional number of Sensitive Product entitlements.
The G20 said that it has proposed (in JOB08/125) a clear-cut solution for the number and treatment of Sensitive Products: (i) a general rule entitlement of up to 4 per cent of tariff lines as Sensitive Products; and (ii) country-specific exception up to an additional 2 per cent of tariff lines as Sensitive, provided that for each additional 1 per cent of tariff lines an additional 1 per cent of domestic consumption beyond what is generally provided for is achieved for all Sensitive Products.
It added that this clear-cut solution would avoid discussions on Paragraph 75 of TN/AG/W/4/Rev. 4, which ultimately could even further deteriorate the level of ambition in market access.
[Paragraph 75 states: "Where a Member is entitled to, and chooses to exercise its entitlement to have a higher number of Sensitive Products pursuant to paragraph 71 above, the relevant amounts specified in paragraph 74 shall be maintained for the defined percentage of products applicable to all developed country Members. For the additional 2 per cent available to those Members under paragraph 71, the Member concerned shall have an obligation to ensure that, whichever deviation is selected, an additional 0.5 per cent of domestic consumption beyond what is generally provided for is achieved for those products."
[Paragraph 74 states: "For developed country Members, tariff quotas derived from the provisions in paragraph 71 above and paragraphs 75-77 below shall result in new access opportunities equivalent to no less than 4 per cent of domestic consumption expressed in terms of physical units where the two-thirds deviation is used. Where the one-third deviation is used, the new access opportunities shall be no less than one per cent less than that percentage of domestic consumption. Where the one-half deviation is used, the new access opportunities shall be no less than 0.5 per cent less than that percentage of domestic consumption."
[Paragraph 71 states: "Each developed country Member shall have the right to designate up to 4 per cent of tariff lines as "Sensitive Products". Where such Members have more than 30 per cent of their tariff lines in the top band, they may increase the number of Sensitive Products by two per cent, subject also to the conditions outlined in paragraph 75 below. Where application of this methodology would impose a disproportionate constraint in absolute number of tariff lines because tariff concessions are scheduled at the 6-digit level, the Member concerned may increase its entitlement by that amount also."]
The G20 said that it is only prepared to work on the basis of TN/AG/W/4/Rev. 4 for an extra-number of Sensitive Product entitlements beyond the 4 per cent default number expressed in Paragraph 71 provided the overall balance and landing zones are maintained.
On the issue of new TRQ creation (Paragraph 83 of the draft modalities text), the G20 reiterated its firm opposition to the creation of new TRQs.
[Paragraph 83 states: "Either:
[No tariff line may be declared sensitive and subject to a tariff quota for Sensitive Products unless that tariff line was already subject to a pre-Doha tariff quota.
[Members are entitled to declare sensitive any tariff line, irrespective of whether that tariff line was already subject to a pre-Doha tariff quota."]
The Group recalled the systemic and commercial implications of such decisions, adding that it would represent a step backwards in terms of reform in Agriculture, widening the existing gap between rules in Agriculture and NAMA (non-agricultural market access).
The G20 strongly reaffirmed its preference for tariff cuts as the means to guarantee market access.
The G20 said that it is prepared to work on the basis of TN/AG/W/4/Rev. 4 and TN/AG/W/6 (on tariff quota creation in relation to sensitive products). But the final decision on the alternatives contained in paragraph 83 is ultimately political and will also depend on the overall balance of the negotiations.
The G20 said that it will need the following conditions to be fulfilled:
(a) Transparency - enhanced transparency provisions in an Annex to the modalities, where developed Members, TRQ volumes and tariff lines are clearly specified;
(b) Entitlement - new TRQs to a maximum of 1 per cent of tariff lines should be within the numerical limits defined in paragraph 71;
( c) Compensation should be significantly higher than the default payments for the maximum deviation expressed in the modalities text in accordance with TN/AG/W/6;
(d) All new TRQs must be MFN;
(e) In-quota duties must be zero;
(f) All new TRQ administration should be transparent and allow for equal opportunities amongst exporters; and
(g) In case of tariff quota under-fill, an automatic carry-over mechanism should be applied.
On the issue of tariff capping, the G20 said that it has historically expressed that tariff capping for all products, as an integral part of the tiered formula, is an essential element of the Agriculture negotiations.
It stressed that Paragraph 24 of the Hong Kong Declaration recognizes the need for balanced and proportionate results between agriculture and NAMA to be achieved through a comparatively high level of ambition in market access.
Contrary to TN/AG/W/4/Rev. 4, the G20 noted, paragraph 6 of document TN/AG/W/3 incorporated a tariff capping in the Tiered Formula in Agriculture both for developed and developing countries. This treatment was comparable with the Swiss Formula in NAMA, which implies a capping for all countries.
[Paragraph 6 of TN/AG/W/3 states: "If, after the application of the tiered formula, a bound duty should be greater than [75-100] per cent, it shall be reduced to that level. [Non-ad valorem bound duties shall be reduced by the amount required to bring the ad valorem equivalent to this maximum level]. For developing country Members, the maximum bound duty shall be  per cent.]"]
TN/AG/W/4/Rev. 4 options for the capping are still not satisfactory for the group, said the G20, adding that it represents additional layers of flexibilities for developed countries (as expressed in the capping exceptions for Sensitive Products contained in paragraph 76, the square bracketed text and its alternative formulation in TN/AG/W/5.)
On the issue of tariff simplification, the G20 said that it is looking for a solution that addresses in a balanced way the issue of tariff simplification both in its systemic and commercial features. The result must avoid the so-called "dirty simplification", in which the ad valorem tariff result is higher than the current specific and complex tariffs. +