TWN Info Service on WTO and Trade Issues (May 07/07)

27 May 2007

Agriculture Chair's 1st 'Challenge Paper' severely imbalanced, according to developing countries

The first 'Challenge Paper' issued by the Chair of the agriculture negotiations came under sharp criticism from developing countries at the WTO on 7 May for being severely imbalanced in its treatment of issues of concern to developing countries, in contrast to that meted to concerns of developed countries.

The criticisms came at an informal meeting on agriculture held at the WTO on 7 May.

Below is a report of that meeting, as well as of a press conference held by Falconer Crawford, the chair of the agriculture negotiations.

This report was published in the SUNS on 8 May. 

A more detailed report of the views expressed at that important meeting will be in the next issue of TWN Info Service on Trade.

With best wishes
Martin Khor

Agriculture Chair's 1st 'Challenge Paper' severely imbalanced, according to developing countries

By Kanaga Raja (SUNS), Geneva, 7 May 2007

A 'Challenge Paper' recently issued by the Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, came under sharp criticism from developing countries at the WTO Monday for being severely imbalanced in its treatment of issues of concern to developing countries, in contrast to that meted to concerns of developed countries.

The Group of 33 developing countries (G33), at an informal meeting of the Special Session of the Committee on Agriculture, expressed concern over the imbalance in the Challenge Paper, saying that it only took on board the concerns of the developed countries and left effectively un-addressed, the sensitivities of the developing countries.

''This would only lead to perpetuate the existing structural flaws and distortions in agriculture trade and, in the process, would negate the Doha mandate, which is essentially a Development mandate,'' said the Group.

Speaking on behalf of the Group, Indonesia (the Group's coordinator) was of the view that while the Chair's paper may help members to better focus the discussions, ''it does not, however, provide a good starting point because of severe imbalance in the treatment of developed countries and developing countries' issues.''

Several other country groupings including the G20, the G10, the Small and Vulnerable Economies Group, the African Group and the ACP Group, as well as individual countries made, or were expected to make, statements commenting on the Chair's paper.

(As of press time, some eighteen countries were slated to speak during the afternoon session.)

Falconer issued his Challenge Paper on 30 April that dealt with the two major aspects of subsidies (domestic and export) and market access. He is expected to come out with his second installment next week that would deal with issues not addressed in his first paper.

The informal meeting Monday was held for countries to respond to the Chair's paper.

Speaking in the morning session, the G33 said that the imbalance was not only among the different pillars of the agriculture negotiations, but also within the market access pillar, where it said that there was a clear imbalance between market access for developed countries and that for the developing countries.

The G33 also criticized the Falconer paper's treatment of Special Products.

In its initial comments, the G20 also addressed the question of balance. ''Balance should be ascertained based on our commitment to make this Round a development Round. As a development Round, its results should be development-oriented and should correct the imbalances present in the multilateral trading system.''

This is specially important, where the objective is abolition or at least substantial reduction in trade-distorting policies that are largely employed by developed countries, said the G20, pointing out that unbalanced results in the central area of agriculture would undermine the prospects for a successful negotiation in other areas.

Uganda, speaking on behalf of the African Group, said that the Chair's paper has covered only a selected set of the agriculture negotiations issues, and that the issues that it considered to be of great importance to Africa have not been adequately covered in this first installment. It looked forward to seeing these issues comprehensively covered in the second installment by the Chair.

The Dominican Republic, speaking for the Small and Vulnerable Economies Group, said that the paper presented an evident imbalance in the treatment of the pillar of domestic support and the pillar of market access.

The Cairns Group of agricultural exporters said that the Chair's assessment of the 'centre of gravity' points to an unsustainably low level of ambition in a number of key areas, notably in domestic support and market access. It believed that the real centre is within a narrower and higher range of reductions.

Switzerland, for the G10, said that while there were positive elements in the Chair's paper, the ''general direction takes us away from the 'landing zones' and leads us to areas of 'disaster', destabilizing the majority of WTO Members' governments which will certainly not create new trade flow opportunities.''

According to a trade diplomat who attended the informal meeting, a number of countries had said that the Chair's paper was imbalanced.

Another trade diplomat said that members at the meeting reiterated their well-established positions. Some members also complained about the imbalance in Falconer's paper. In this respect, the trade diplomat pointed to the paper being ambiguous in relation to US subsidies but on the other hand it provided a specific range of numbers for Special Products and sensitive products.

As to the Uruguay Round approach suggested by Falconer, the trade diplomat said that the question would be what is the number for the average cut and the minimum cut.

Yet another trade diplomat said that Falconer's paper, as it now stands, is not in favour of developing countries. For it to gain any consensus, it would have to be amended.

Meanwhile, at a media briefing during the lunch recess, Falconer said that everything went pretty much as he would have expected at the meeting this morning.

''Nobody had a good thing to say about the paper, so I think we are in business,'' he said, adding that the paper deliberately kicked just about ''as many shins as possible'' and provoked the inevitable reactions.

According to him, everybody was now actually negotiating - in the sense that everyone was now trying ''to tug the blanket firmly to their side of the bed.'' Members seem to be prepared now to re-engage more intensively.

He said that he intends to bring out his second installment by 14 May and reconvene an informal meeting in the week of 21 May.

He said that he told Members this morning that ''they have to come up with something that is more than simply saying that 'you don't like this or you don't like that'. It has to be something that is achievable.''

''It probably won't be until the week of 21 May that we begin to seriously test whether that is forthcoming or not,'' said Falconer.

Asked to comment on the G10's view that the paper was not a basis for the negotiations, Falconer said that he did not propose the paper as a basis for the negotiations. What he proposes as a basis for the negotiations would be his revised draft modalities text.

With respect to any possible contributions from the G4 (India, Brazil, the EU and the United States), Falconer said that any positive input from the G4 would be hugely positive and much preferred. He reiterated that members would be in a much better position to get anywhere if the G4 makes progress among themselves which they can then feed into the multilateral process.

From what the G4 members had informed him following their meeting in London, Falconer said that he got the sense that they were pretty seriously engaged in a way as a group that he had not seen for quite a long time. He did not think that they were simply talking about process but were trying to talk about substance as well.

He however said that he did not hear anything from them that was spectacularly new in terms of the specifics on what they were reaching agreement on.

Asked about comments that his paper was not balanced, Falconer admitted that there were a lot of people who said that there was an imbalance in the paper. He however said that he did not hear anybody saying anything that was way out of the ranges that he had set out in his paper.

Asked about the Uruguay Round ''average cut'' approach for agricultural tariffs that he proposed in his paper, Falconer said that one member (presumably in reference to the United States) did not really like it that much. He added that a number of members said that they wanted to think it through, and wanted to reflect further on it. Apart from that one delegation, he did not think that anybody was manifestly opposed to it.

A number of members did not react to it, he said, adding that some said that they wanted to talk about it when they have a more technical discussion, while others had questions for him as to what the proposal meant. This was pretty much the reaction that he expected, Falconer said.

(A full report on the informal agriculture meeting will appear in the next issue of SUNS.)