TWN Info Service on WTO and Trade Issues (July 07/14)
27 July 2007
WTO negotiations on agriculture modalities will start on 3 September for at least a fortnight and without a deadline, according to Ambassador Crawford Falconer, chair of the agriculture negotiations.
He said this at the end of the informal meeting on 24 July which heard initial reactions of WTO members to the text on draft modalities that Falconer issued on 17 July. (See previous TWN Info on this meeting).
Below is the second report on this meeting, including the positions of US, China, Nigeria, Africa Group, EU, etc.
Agriculture negotiations for 2 weeks from 3 September without deadline
Martin Khor (TWN),
negotiations on agriculture modalities will start on 3 September for
at least a fortnight and without a deadline, according to the Chair
of the WTO's Committee on Agriculture (Special Session), Ambassador
Crawford Falconer of
He said this at the end of the Committee's informal meeting on 24 July which heard initial reactions of WTO members to the text on draft modalities that Falconer issued on 17 July. (See SUNS #6300 dated 25 July for the initial article on this meeting).
Falconer told the meeting that he detected a desire to negotiate, based on his text, and described the present climate as a significant moment, if not a turning point in the negotiations. He said that he will hold negotiations meetings in the two weeks beginning 3 September, with no "artificial deadlines" set but with the aim of drafting further revisions.
He commented that his draft had "done 90% of its job". He told members that they will have to compromise and change their positions if the negotiations are to progress.
Speaking to the media, Falconer said that he would be happy if there is a text-based discussion in September. "Based on what I heard, that will happen. We'll keep going as long as it takes. There is no deadline. When it makes progress, we'll revise the text. It won't happen in a few weeks."
about the apparent difference in reception by the WTO members to his
draft and the NAMA draft of Ambassador Don Stephenson of
Trade officials said that the 51 speakers at the meeting welcomed the Falconer draft but that they all registered their reservations and dissatisfaction with some parts of the text.
Several diplomats who were at the meeting said privately that, judging by the statements, the different delegations appeared to be entrenched in their previous positions, and there was "no movement."
There appeared to be a mood of delegations not wanting to "rock the boat" and to be careful to avoid being blamed for hindering the continuation of the negotiations. Also, most delegations felt that there was enough in the Falconer draft for it to be used in the further negotiations, even if no one was satisfied with it.
journalists on the
the text's figures for the limits to overall trade distorting support
(OTDS), Glauber said that the proposed levels for the
special products, Glauber said the text lacks specifics and there needs
to be clarity on that. He said that the
At the meeting, the European Communities said that listening to the other groups (G20, Cairns Group), it wondered if we are in a real negotiation as it did not see real signs of movement compared to their well known positions.
The EC could accept the text as a working basis for negotiations but registered some concerns, and in some cases the proposals overstepped some of its fundamental "red lines."
Among the concerns it raised were the arrangements on tariff rate quota expansion for sensitive products, the designation of sensitive products (which is not covered in the text), and the need of the EC for continuing the special safeguard (SSG) for limited products.
On the ranges of cuts proposed, the EC said that for market access, the upper parts of the ranges are out of the question, and this is also the case for the OTDS cut in the top tier.
The EC also needs to ensure that policies falling under the Green Box can be maintained. There is need to leave flexibility to allow newcomers to benefit from Green Box payments under para 6 and this omission is an oversight. It also has reservations on changes proposed to paras 11 to 13 in the existing Green Box where the change can have perverse effects.
On export competition, the EC insists on full parallelism, is pleased about the elimination of monopoly powers of state trading enterprises in the text, wants further work on food aid outside the safe box, and cannot accept exceptions for export credits except for LDCs and "technical exceptions" for breeding cattle and seeds in terms of duration beyond 180 days.
The EC also said that there would be no agreement on agricultural and NAMA modalities without an agreement on geographical indicators (extension and negotiation of a register).
African Group, represented by
On OTDS, the Group reiterated the need for real and effective cuts and its level should not exceed the low teens. On the Green Box, the disciplines must be stricter to ensure that there is no box shifting.
cotton, the Group welcomed the proposals under the three pillars, and
stressed also the need to take up the development aspect and to set
up a mechanism to deal with the loss of revenue to
On market access, the Group supported an average cut of at least 54% for developed countries and at most 36% for developing countries.
On special safeguard mechanism (SSM), the African Group criticized the proposed modalities which limit the scope of SSM that will apply, contrary to proposals of developing countries. It was also disappointed with lack of specificity on special products, and on the lack of proposed solutions for tariff escalation and preferences.
It welcomed the language on commodities but asked that all elements of the Group's proposal including clarification of Article XXXVIII of GATT 1994 be included.
It had expected the paper to indicate how the duty-free and quota-free market access for LDCs would be operationalised and was concerned that there has been a regression on this issue.
On export competition, the Group was concerned that some issues of concern to it were left out. On food aid, the declaration of an emergency, and the roles of recipient government, regional organizations and NGOs are unresolved and on export credits the flexibilities for LDCs and NFIDCs (net food importing developing countries) are not clearly spelt out.
are, therefore, concerned that this approach would lead to partial modalities,
which we remain unwilling to support or approve," said
"We insist on full modalities largely because that is the only approach that would enable us to empirically assess not only the overall balance in the agriculture negotiations, but also the balance between agriculture and NAMA. We also consider full modalities as an insurance policy against delaying solutions on certain issues to a later stage, which may be subsequently overlooked or ignored with impunity."
For example, with regard to OTDS, the range proposed contrasts sharply with the African Group and G20 proposals of $10-12 billion and $12 billion, respectively. However, regarding tariff cuts for developing countries, the text proposed a maximum average reduction range of 36% to 40% compared with the G20 proposal of a maximum of 36% and the ACP and African Group proposal of a maximum of 24%.
"We consider this punitive, as it obliges us to negotiate outside those ranges that are consistent with our level of development and the policy space that we consider necessary for the achievement of our development objectives," said Nigeria. "As one delegation has aptly captured it, your proposals have constrained us to negotiate north of the G20 wherever we have defensive interest and south of the G20 where we have offensive interests. We, therefore, consider this as a contradiction of the spirit of a development round."
Third, the draft has "ignored the views of the majority who want disciplines on the Green Box as well as a monitoring and surveillance mechanism to prevent box shifting and abuse in developed countries" and also "provided no criteria for important areas like direct payments; and no indicators or thresholds on criteria for decoupled payments."
the S&D (special and differential) treatment for developing countries
is not so clear. On SP,
Recently Acceded Members (RAMs),
On export competition, the state trading enterprises from developing countries which enjoy special privileges to preserve domestic consumer price stability and to ensure food security should be permitted to maintain monopoly power. The share of world exports should not be taken as a criterion.
The Philippines said that it could not "find the logic" in the ranges for the general formula in which the reduction rates for the developed countries moved southwards (from the G20 proposal) and the rates for the developing countries moved northwards. This has put a disproportionate burden on developing countries who committed more during the Uruguay Round.
It also supported the views, in line with the Chair, that advancing in this direction implies focusing on substance rather than an imposed deadline. The process must be guided by the mandates, especially in relation to SDT, less than full reciprocity and proportionality in developing countries' commitments.
The Cairns Group welcomed the draft as providing a good starting point for negotiations. It said that the market access pillar requires much greater clarity, on sensitive products, tropical products, SSG, SSM, tariff caps, SPs, in-quota rates, tariff escalation, tariff simplification and tariff quota administration.
It said that for the top tier formula cut, anything below the Cairns Group proposal of 75% would magnify the problem. It was concerned at the low ambition on sensitive products (numbers and treatment). The SSG has to be eliminated. On domestic support, the discussion should now focus on the "low teens" for OTDS.
The G10 took an opposite view from the Cairns Group. It said that the draft's level of ambition for tariff cuts is extremely high, while the flexibilities are too narrow. On sensitive products, the rules are too stringent, the payment through TRQ expansion too costly and the number too limited. The G10 said that "we cannot accept to be penalized for our tariff structures beyond the effects of a strongly harmonizing formula we have agreed to."
It wanted the SSG to be maintained and the rules of the Green Box must continue to promote further farm reforms including new programmes and provisions for newcomers.
Japan's Ambassador said that if there is no tangible result by autumn, the Round will be put in a freezer and thus this time it is truly "now or never" to make progress.