TWN Info Service on WTO and Trade Issues (Nov07/01)

1 November 2007

Agriculture talks resume while EU chief joins blame game
Published in SUNS #6344 dated 16 October 2007

The following article is reproduced here with the permission of the South North Development Monitor (SUNS). Any reproduction or re-circulation requires permission of the SUNS (

With best wishes
Martin Khor

Agriculture talks resume while EU chief joins blame game
Geneva, 15 Oct 2007:  By Martin Khor (TWN):

Negotiations on agriculture resumed at the WTO on Monday after a long weekend break, with the subject of domestic support on the agenda late this afternoon.

Meanwhile, delegates at the WTO were also privately discussing the new "blame game" blast, this time from the European Union's Trade Commissioner Peter Mandelson, who accused big developing countries of risking to deal a terrible blow to the Round because of their position on NAMA (non agricultural market access).

Ambassador Crawford Falconer of New Zealand, chair of the agriculture negotiations, told journalists this afternoon that he would hold "Room E" meetings (restricted to 36 delegations) starting with domestic support today and Wednesday and move on to market access issues on Thursday and Friday.

Depending on how fast the talks go this week, there may or may not be more agriculture meetings next week, said Falconer. He expects to produce a revised version of his modalities text "in the first half of November."

Asked if the timing for issuing his text would partly depend on the pace of the negotiations on NAMA, Falconer said "the operating assumption now is that agriculture and NAMA goes together... that we will have a revision (of texts) together."

On the talks this week, Falconer said the issues in domestic support were technically easy and would not require so much time. The key question was "are they ready to say anything new?"

Asked on the reported position of the United States on his paper (that it did not accept the parts of the text on cotton and product-specific domestic support), Falconer said he understood that the US could take the numbers in his draft on overall trade distorting support (OTDS) but he did not hear them say they agree with the cotton text.

(The United States had initially said three weeks ago that it could accept the ranges in the Falconer text as the basis for negotiations. However, various US officials have subsequently been reported to have stated that they did not accept aspects of the text, especially on cotton subsidies).

At an informal open-ended agriculture meeting (to which all delegations are invited) earlier this afternoon, Falconer briefed delegates on the progress of the Room E talks last week (8-11 October) that focussed on export competition.

According to trade diplomats, Falconer said there had been progress on export credit issues, which would become clearer in coming weeks.

On food aid, the positions were much closer and he could improve his text. However, there is still no clarity on monetization (whether food aid should be given only in the form of money or if donations in kind can be allowed). There is as yet also no common definition of "commercial displacement" from food aid.

Diplomats said that Falconer mentioned "self financing" as a more critical issue, under export credits, i. e. the proposal to make government credit agencies self-financing by charging premiums that can cover operating costs over 4 to 5 years. The US would like exemption from this for certain cases.

Developing-country diplomats belonging to the G33 are expecting the discussion on SP and SSM later this week to be important in gauging whether their proposals will be satisfactorily considered. For many of the G33 countries, these issues are critical for whether they can accept a Doha deal.

An idea floating around, which has been brought up by Falconer several times, is whether to allow developing countries to have a "Uruguay Round approach" in cutting their agricultural tariffs instead of undertaking tariff reduction according to the tiered formula.

In the Uruguay Round, the developed and developing countries committed to reduce their tariffs by an average of 36 and 24 per cent respectively. Countries could choose different rates by which to reduce different tariff lines, as long as the average reduction met the overall target.

Falconer has proposed that small and vulnerable economies may choose to use this approach, with a 24 per cent average cut, as an alternative to the tiered formula. He also suggested that this method be also made available to developing countries, presumably as an alternative to making use of the "special products" instrument.

Some G33 members are open to considering this concept further. However, they would not like to give up the concept of "special products" which took them much time and effort to get accepted.

Meanwhile, outside the WTO, the European Union's Trade Commissioner Peter Mandelson made a big entry into the evolving blame game by accusing big developing countries of risking to deal a "terrible blow" to the WTO talks.

A Reuters report from Brussels on 11 October quoted Mandelson as accusing emerging economies like Brazil, South Africa and India of risking this "terrible blow" by their not accepting the terms of the NAMA Chair's text, and saying that they are calling on developed countries to undertake "unilateral disarmament" as the rich nations must make big concessions.

For such developing countries now to reject the Chair's industrial tariffs text "would do terrible injury to the current negotiating process and drain the negotiations of what confidence and momentum remains in them," said Mandelson.

For big developing countries to protect their industries from tariff cuts flies in the face of the round's development aims, said Mandelson, who added: "I don't think anyone could have brought a stronger development-minded conviction to this negotiation than I have.

"I actually believe in it. But I feel that my commitment is being taken for granted and I am being left with empty hands."

The Mandelson assumption seems to be to equate development with tariff reductions, and thus developing countries that do not want to cut their industrial tariffs as steeply as demanded by the developed countries (and supported in the NAMA Chair's text) are guilty of being anti-development and risking a terrible blow to the Round.

However, this is the same EU trade chief that is strenuously defending the right of the EU to cushion the extent of tariff cuts for European agriculture, with the concept of sensitive products and so on, and also that would like the EU's industrial tariffs to be cut on average by only 25 per cent or so while the developing countries cut theirs by 52-65 per cent.

To deflect from being accused of engaging in "blame game" rhetoric, Mandelson took this bull by the horn to state in his interview with Reuters that the talks were at a delicate stage but were not degenerating into a blame game. "I am genuinely, genuinely not doing that. I will still be proclaiming the importance and doability' of this round if I am the last person standing."