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TWN Info Service on WTO and Trade Issues (June07/05)

13 June 2007


Agriculture talks "positive" but still not enough

On 30 May, the chair of WTO's agriculture negotiations said at a meeting that consultations among over 20 key delegations on all the main areas of the agriculture negotiations proved ''slightly more positive than I was expecting'', but still not enough to indicate where agreement might be reached.

According to trade officials, among the topics that Falconer identified as particularly constructive in his consultations were some aspects of food aid and state trading exporting enterprises, and "special products".

Falconer was reporting to the full membership on talks that began on 22 May and was spread over more than a week. The talks covered issues on all three pillars of the agriculture negotiations (export competition, domestic support and market access) that were outlined in the first installment of his Challenges Paper.

Below is a report on this meeting.  It appeared in SUNS on 1 June.

With best wishes
Martin Khor
TWN

Agriculture Talks 'more positive than expected', but still not enough

By Kanaga Raja (SUNS), Geneva, 31 May 2007

Consultations among over twenty key delegations on all the main areas of the agriculture negotiations proved ''slightly more positive than I was expecting'', but still not enough to indicate where agreement might be reached, said the Chair of the agriculture negotiations at the WTO in his briefing to delegations Wednesday afternoon.

"That's pretty good," Ambassador Crawford Falconer of New Zealand said at an informal meeting of the Special Session of the Committee on Agriculture. "But at this stage, we needed something that was spectacularly good."

According to trade officials, among the topics that Falconer identified as particularly constructive in his consultations were some aspects of food aid and state trading exporting enterprises, and "special products".

But even where members are more open to each others' ideas, he will still have to guess where feasible compromises might lie, Falconer said.

Falconer was reporting to the full membership on talks that began on 22 May and was spread over more than a week. The talks covered issues on all three pillars of the agriculture negotiations (export competition, domestic support and market access) that were outlined in the first installment of his Challenges Paper.

He had issued the first installment on 30 April, and this was widely criticized subsequently by both developed and developing countries at an informal agriculture meeting on 7 May.

The Chair will be holding further consultations on 1 June on the second installment of his Challenges Paper. The paper was issued on the evening of 25 May.

The second installment covers issues such as the special safeguard mechanism for developing countries; tropical and diversification products; small and vulnerable economies; the Green Box; least-developed countries; market access for cotton; recently acceded members; tariff escalation; tariff simplification; preferences; commodities; and other issues.

According to Falconer, following the discussions on 1 June, he will hold at least one more open-ended informal meeting and possibly some smaller group consultations on technical issues (such as export credits, cotton, and indicators that developing countries use to select "special products"), before circulating a revision of his 2006 draft "modalities" text in the second half of June.

A lot more work is still needed but most of that will have to be done after the revision is circulated, Falconer told delegations.

Falconer also cautioned that the talks are "pretty much out of time" if members are to follow their current timetable - they want "modalities" (formulas for cutting tariffs and subsidies and other technical details) to be agreed by the summer break.

The seven half-day sessions of consultations among twenty or more delegations covered export competition (including export subsidies), domestic support and market access.

(Export competition was discussed on 22-23 May, domestic support on 24-25 May, and market access on 29-30 May.)

The focus was on topics included in the first installment of the Challenges Paper, said Falconer.

According to trade officials, the delegations were carefully picked to represent all coalitions and key players in the agriculture negotiations.

(According to a trade diplomat who followed the consultations, the countries that were involved in the discussions on export competition and domestic support were Argentina, Australia, Brazil, Canada, China, the EC, Egypt, India, Indonesia, Jamaica, Japan, Kenya, Korea, Malaysia, New Zealand, Norway, Philippines, Switzerland, Uganda, the US and Zambia; Costa Rica, Dominican Republic, Mexico, Thailand, Trinidad and Tobago, and Uruguay joined during the discussions on market access.)

On the export competition pillar, trade officials said, the discussion on the ''safe box'' under food aid - to allow food aid provided for genuine emergencies to be shielded from disciplines - was useful enough for the Chair to see broadly on how to deal with this, even if not all differences are resolved.

The discussion on other issues was also better than for a long time, with signs of flexibility and openness to others' concerns, Falconer said, adding however, that he will still have to guess where possible compromises might lie.

On export credits, there was some sign of flexibility, for example, on the period of time needed to determine whether a credit or insurance programme is genuinely self-financing, but with differences remaining on this and other topics, the Chair reported.

On state trading enterprises, Falconer said that some members showed significant flexibility on the definition of the enterprises to be covered by the agreement, but there was no real change in positions on ending monopoly powers.

The discussion on domestic support was "far more engaged" with a greater willingness to explore options and less posturing and game-playing, Falconer said, attributing this partly to the presence of some very senior officials who have been holding discussions of their own as well (presumably referring to the G4 meetings involving India, Brazil, the US and the EU).

However, the discussion has not yet produced new numbers, said Falconer.

The issue of cotton was discussed under domestic support, actively and constructively, without countries sticking to fixed positions, Falconer said, but still leaving him with not much clue as to how to deal with the subject.

The discussions on the market access pillar focussed on tariff cuts (developed and developing countries' tiered formula), sensitive products, the special safeguards (SSG), and special products.

With respect to the developed countries' tiered formula, Falconer reported that the focus was on the cut on the highest tariffs (those in the "top tier"), with some countries seeking aggressive liberalization showing that they are willing to scale down their ambition, even if this still seems too ambitious for some others.

On the developing countries' tiered formula, Falconer said that the discussion was less "theological" and more practical, with a recognition that there might have to be some variation in the approach, as different countries have different tariff structures.

On sensitive products (which all countries will be able to nominate for shielding from some market opening), Falconer told delegations that although there was some movement towards the middle ground on some issues (such as the number of products that can be selected as "sensitive"), this subject still has some way to go.

There was nothing new on the special safeguards (SSG), Falconer reported.

As to special products, Falconer observed that the discussions were more realistic, with flexibility from "one member", which had previously shown a lot of reservations about special products. Members are willing to look more closely at indicators for determining whether a product meets the criteria, he said.

The Chair however expressed concern that too little time remains for the amount of discussion needed to sort out the question of indicators. Nevertheless, Falconer said: "I haven't witnessed anything that constructive on this [subject] for a long time."

(According to a trade diplomat, during the discussions on the tiered formula and the tariff cut in the top band and the cut in each band for developed and developing countries, Australia, Canada, Malaysia, Argentina, Uruguay and Brazil mentioned a 75% cut in the top band and a 5% difference in each band for developed countries. The EU replied that it could accept the 5% difference in each band but not the 75% cut in the top band. The US did not comment.

(When the talks focused on special products, the trade diplomat said that participants discussed how to proceed on the issue. One option mentioned was to discuss the numbers first and then the indicators, while a second option was to discuss the indicators first and then the numbers. According to the trade diplomat, the majority of participants preferred the second option, while the Chair preferred the first option.)

Following his report, Falconer invited delegations to speak, but no delegation did so.

The informal meeting ended after about 45 minutes with Falconer paying tribute to Japanese Agriculture Minister Toshikatsu Matsuoka who passed away recently. + 

 


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