TWN Info Service on WTO and Trade Issues (Jun15/16)
22 June 2015
Third World Network
 
Agriculture: Rev. 4 text must be basis, insist majority of South nations
Published in SUNS #8044 dated 18 June 2015
 
Geneva, 17 Jun (Kanaga Raja) -- A majority of developing countries, at an informal meeting of the Special Session of the WTO Agriculture Committee on Tuesday (16 June), underlined that the Rev. 4 draft agriculture modalities text should remain the basis for moving forward the negotiations in agriculture.
 
At the session dedicated to the issue of market access, the developing countries also called on those members who are in favour of alternative approaches to come forward and present concrete proposals.
 
[The WTO Director-General's consultations with seven major developed and developing nations, last week and on Monday, appear to have made no headway on the domestic support pillar and, as evidenced in the informal Special Session Tuesday, the membership remained sharply divided between the US, EU and some industrial and developing countries supporting their view on one side, and on the other, the large majority, over 100 developing countries, on all the three pillars of the agriculture talks.
 
[Meanwhile, in an opinion piece Monday in "USA Today", on the issue of the Obama administration getting fast- track trade negotiating authority, the Democratic Minority leader in the US House of Representatives, Mrs. Nancy Pelosi, who had orchestrated the tactics to defeat the move, said that the TPA is dead. "It is clear that the debate on trade authority is probably the last of its kind," she wrote. "The intense debate of the past few weeks has further convinced me that we need a new paradigm."
 
[She then went on to suggest a "new global engagement on trade", perhaps under the auspices of the United Nations or a new organization that would represent public, private and non-profit organizations, and said: "We must give workers more leverage and have more open discussion, with greater transparency and stronger accountability than the World Trade Organization or other trade negotiations." SUNS]
 
According to trade officials, the Chair of the Committee in Special Session, Ambassador John Adank of New Zealand, welcomed the "encouraging" exchanges among members on the issue of agricultural market access.
 
He however reported that members were "still a long way from where we should be" with regard to finalising a work programme for the agriculture negotiations.
 
According to trade officials, most of the interventions focused on the proposed formulae for tariff reduction.
 
Members especially voiced their views on an earlier communication circulated by the Chair in late May in which he cited a growing willingness among members to explore alternative approaches to the tariff negotiations than those set out in the Rev. 4 text.
 
According to trade officials, Ambassador Adank said in the communication that, in addition to proposals and ideas put forward by Argentina, Paraguay and Norway, a range of potential alternatives have been brought to his attention (he did not name the proponents of these proposals), including:
 
* a modified version of the tiered formula set out in the 2008 draft text (option A);
 
* a combination of the tiered formula plus, using the outcome of this as the starting point, a cut in the overall tariff average (option B); and
 
* the tiered formula plus, using the outcome of this as the starting point, an average cut of tariff lines (option C).
 
In his opening remarks at the informal meeting, the Chair said the discussions he has held on these alternative approaches over the past weeks "have not revealed any clear collective preferences."
 
"At the risk of stating the obvious, we are at the stage where members will need to make choices in order to achieve the objectives set out for us by Ministers" of securing a work programme by the end of July for advancing the Doha Round talks, the Chair said.
 
"Discussions now need to move to a more decisive phase," he said, noting that members have consistently drawn attention to the linkages between the market access pillars in agriculture and non-agricultural market access (NAMA) as well as to linkages among the three main agriculture pillars (market access, domestic support and export competition).
 
Ambassador Adank said it was "clear that it won't be possible for any of these issues to be resolved in complete isolation from the others."
 
According to trade officials, the Chair told delegations, "We urgently need to move towards convergence. We've got to know what's possible and what's impossible."
 
Some 40 delegations took the floor at the informal meeting, voicing their views on the state of play in the market access negotiations and on the alternative formulae cited by the Chair in his communication, trade officials said.
 
Brazil, on behalf of the G-20, Indonesia, on behalf of the G-33, and Egypt, for the African Group, and others said that the 2008 Rev. 4 draft text should remain the basis for further discussions.
 
Chile, Colombia, South Africa, Mexico, Philippines, Pakistan, Thailand and Nigeria said that they were not in a position to take a position on the alternative formula approaches, either because they needed to carry out their own simulations first, or needed a better clarification/understanding of what the alternative formulae mean.
 
According to trade officials, India pointed out that all the three options use the tiered formula. Hence it was difficult to digest why the tiered formula is considered not good by some but then it is used in these different approaches. There is need for clarity, India said, on whether "we want to use the tiered formula or not."
 
All ministerial decisions have to be respected, and the tiered formula is part of the ministerial decisions. We have to be conscious that if we are dumping the formula, what are the reasons for doing this. The reasons have to be clear, it said.
 
There is need to clarify what the problems are with the Rev. 4 text, said India. For almost a year, India has been hearing about low ambition, but that till today there are no proposals on the table. It pointed out that in fact Argentina's proposal is the only one that has been circulated formally.
 
India said that the opponents of the tiered formula need to come forward and state why they could not accept this approach.
 
According to trade officials, India asked how S&D will be available for developing countries if the ambition is lowered. What are we lowering it against, it asked. For India, all three pillars of the agriculture negotiations have to move together. Stabilising only one pillar may not succeed. Domestic support is important for leveling the playing field, it added.
 
South Africa had concerns over the uneven application of the re-calibration approach. On the specific proposals, it said that it is too early to make a determination and there is need to run simulations. It is open to explore alternative tiered formulae along the lines of average cut targets but can only decide when there is clarity on domestic support.
 
We need to be clear how S&D provisions will be applied, it said, adding that the proponents of the alternative approaches should put forward proposals with rationale and motivation to allow for interactive engagement. While ambition is being reduced in agriculture, ideas are being advanced in NAMA that suggest that a high level of ambition is back in this area.
 
Brazil noted that many members have said that they are still considering their options, including option A. It said that there is need for technical analysis.
 
On behalf of the G20, Brazil said that an outcome in all three pillars of the agriculture negotiations is essential for an outcome to the Doha Round. The Rev. 4 text remains the basis for our conversations, it added.
 
Indonesia, on behalf of the G-33, said that it is concerned that the approaches members are now looking at won't lead in the direction that many developing countries were looking for in the Doha Round. The promise of doable outcomes continues to elude us, it added.
 
We cannot revisit virtually all aspects of the Rev. 4 text including the stabilised parts of that text to find us in a more complicated position, it said, urging members who favour other alternative approaches to come forward and present concrete proposals and avoid putting members into perplexity.
 
Barbados (for the ACP Group) said that results are needed on all three pillars, and "we can't harvest market access only." Special Products (SP) and Special Safeguard Mechanism (SSM) and treatment of cotton must be integral elements.
 
It called upon members with ideas to circulate their proposals so that they can be discussed and evaluated. Members with ideas need to articulate these ideas and circulate them. There is need for greater clarity on these new ideas. The development dimension must be preserved, it said.
 
Benin, for the Cotton 4, said that it wants duty-free quota-free (DFQF) market access and for this requirement to be maintained. It called for predictable rules of origin. The difficult situation of the LDCs and their constraints should guide the members. It also wants the benefits of the DFQF regime for cotton and cotton products.
 
Egypt, on behalf of the African Group, called for balanced and equitable outcomes on all three pillars. Subsidised exports are distorting African markets and high levels of domestic support are a concern. While it welcomed new approaches, any new approach should ensure substantial improvement in market access for developing countries and which protects small-scale farmers from import surges. Flexible treatment should also be included for SP and the SSM.
 
New approaches on market access should address tariff escalation and tariff peaks and whatever approach is taken should not reduce the margin of preferences that some countries currently enjoy, said Egypt.
 
It said that it cannot accept any dilution of S&D. It encouraged the proponents of alternative approaches to table their proposals. The Rev. 4 text should remain the basis for moving the negotiations forward.
 
Rwanda, for the Least Developed Countries (LDCs), supporting the African Group, said it is unacceptable that the agricultural reforms promised long ago are not forthcoming. It called on members to eliminate trade-distorting subsidies without conditioning this to any other element of the negotiations.
 
According to trade officials, China associated itself with the statements of the G20, G33 and Recently Acceded Members (RAMs).
 
Negotiations are at a critical juncture, it said, adding that it is fully committed to concluding the negotiations but the fundamental principles have to be preserved. Market access in particular should be fully in line with the existing mandate.
 
China underscored that SP and SSM shall be integral parts of the negotiations as mandated in Hong Kong. Under no circumstances should these be abandoned simply because the level of ambition has been lowered. Any re-calibration of the level of ambition should be based on the Rev. 4 text, which is the benchmark. It took note of the alternative approaches mentioned by the Chair.
 
Argentina said that the issues of tariff peaks, tariff caps, tariff escalation amongst others needed to be addressed as part of the market access discussions.
 
According to trade officials, some members said that they cannot accept the tiered formula in the Rev. 4 text.
 
Australia and New Zealand said that because the alternatives being suggested would lower the ambition on market access, the flexibilities should be limited or simplified.
 
Australia, the US, Norway and the EU said that the LDCs and small and vulnerable economies would not be expected to make any market access commitments as part of a final Doha Round.
 
According to trade officials, Norway, Canada, and the European Union said that they did not believe option A would work, with Canada saying that discussions on the tiered approach had "basically been exhausted" and that consensus remained elusive.
 
Australia said that it favoured option B because it was more ambitious. However it said that members it engaged with seemed more supportive of option C, a view also shared by Canada.
 
On flexibilities for developing countries, it is prepared to consider what it can do but that conversation needs to recognise and respect the fact that these options will result in a much lower level of ambition.
 
According to trade officials, both the EU and the US said that re-calibration of expectations was necessary to reach a deal.
 
The EU called for re-calibration because of low expectations for the outcomes in NAMA, services and the domestic support pillar of the agriculture negotiations. The US gave the reason for re-calibration approach as due to the substantial downward revision in the level of market access ambition for the agriculture talks.
 
According to trade officials, the EU said that it preferred the "well-known" approach of option C, which Norway also endorsed as the simple and preferable alternative.
 
The EU said that it wants to deliver three messages: it will consider re-calibration and the level of ambition necessary to reach a deal; it favours the average tariff cut approach; and we need to limit as much as possible the number of additional elements (on top of the average tariff cuts).
 
Re-calibration is necessary if we want to have a deal, it said. The level of market access must be calibrated with NAMA and services. In view of the state of negotiations, it has low expectations on what others can do on NAMA and services. Domestic support and market access are linked, and ambition levels need to move in parallel.
 
In view of the difficulties some members have in accepting reductions, it augurs badly on the outcome in the domestic support negotiations, and this will have an impact on the level of ambition in market access. We cannot expect some to refuse to cut subsidies while expecting more to be delivered on market access, said the EU.
 
Among the three alternative approaches, option A is not viable for it. It supports a simpler formula, and not to go into the more complicated Rev. 4 text formula. It prefers option C.
 
According to trade officials, the US said that it "probably preferred" a simple average cut but was open to all options.
 
The US said that it considers the ideas by the Chair in his report as a sampling of possibilities. It has considered the ideas of others including Argentina, Paraguay and Norway. For the US, and many others, it is increasingly coming to the conclusion that the ambitions in agriculture are being substantially revised downward. That is not its hope and its past expectations have taken a hit.
 
The simple average cut as opposed to the cut in average was probably preferable at this point but it is evaluating the ideas, said the US. It will continue to be open to ideas as presented but consensus on meaningful cuts is elusive. Those members that continue to say that they have high expectation must do two things quickly: articulate what their high expectations are and what will be their own contributions to achieving this.
 
Japan said it wanted a simple and realistic formula with enough flexibility, adding that there was little time left to find a compromise by the July deadline. It said that MC10 is the last opportunity to conclude the Doha Round.
 
In his closing remarks, the Chair said: "It's fair to say that discussions are entering a more interactive stage than in past exchanges."
 
"What we are seeing in some of the comments are that countries are moving away from maximalist positions to say that they are able to consider something that although it might not be in their ideal interest, they could consider in order to move forward to get an agreement.
 
"We saw today that in a number of exchanges countries with completely different views on market access are prepared to have that discussion. And I am very encouraged by that. But we can't come to any conclusions on the overall approach."
 
According to the Chair, many members expressed a preference for the 2008 draft text but at the same time a number of statements were made saying that unless things changed significantly, it was unlikely consensus would be reached on that text.
 
Members were also clear in saying they wanted to know more about what the alternatives being proposed might involve and that, if it were not possible to get consensus on the 2008 draft text, it was worth exploring what the possibilities are.
 
The situation regarding tariff peaks, tariff caps, tariff escalation, tariff rate quotas, safeguards and other flexibilities will impact the outcome on market access, and it was understandable members wanted to talk more about that, the Chair said.
 
Ambassador Adank said he also heard from members the need for greater clarity on the alternatives formula approaches being proposed, and said he had suggested to the WTO secretariat to prepare a background paper on tariff reduction modalities.
 
According to trade officials, he also suggested organizing a technical workshop after the secretariat paper is issued to discuss the issue in more detail.
 
The Chair said he would continue working intensively with members and would convene another open-ended meeting at a date to be determined. +