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TWN Info Service on WTO and Trade Issues (Nov07/08)

2 November 2007


WTO Agriculture Meeting 19 Oct 2007  

Below is a report of the agriculture open-ended meeting at the WTO held on 19 Oct. 2007.

It was published in the South North Development Monitor on 22 Oct.  It is reproduced here with the permission of the SUNS.  Any reproduction or re-circulation requires permission of SUNS (sunstwn@bluewin.ch).

With best wishes
Martin Khor
TWN


WTO Agriculture Meeting 19 Oct 2007  
Published in SUNS #6348 dated 22 October 2007
By Kanaga Raja (SUNS), Geneva 19 Oct 2007

The Chair of the agriculture negotiations at the WTO, Ambassador Crawford Falconer of New Zealand, has announced that his consultations would pause for a week and reconvene for a final week from 29 October to 2 November, after which he will prepare a revised draft modalities text.

Falconer made this announcement at an informal meeting of the Special Session of the Committee on Agriculture on Friday.

[While the agriculture consultations are taking a week's pause, the chair of the NAMA negotiations, Ambassador Don Stephenson of Canada, has announced an open-ended informal meeting on 22 October to inform the NAMA Negotiating Group on how his consultations are going.

[Stephenson is expected to brief on his consultations this week with different countries on different aspects of the NAMA negotiations: Least Development Countries' contribution, formula and flexibilities, Small and Vulnerable Economies (SVEs), Non-Tariff Barriers, Recently Acceded Members, non-reciprocal preference erosion and Paragraph 6 countries.

[According to trade officials, he plans to continue these consultations the week of 29 October with special emphasis on Non-Tariff Barriers, as well as to have open-ended meetings on all issues for the week starting 5 November.]

At the informal meeting Friday, Falconer also briefed the full membership on three-days of consultations (15 and 17-18 October) among 36 representative delegations (the so-called Room E process) on domestic support and developed countries' market access issues.

"We're moving incrementally in the right direction, albeit three years later than we should have," Falconer told delegations.

Some progress was made on some more technical aspects of the Green Box and on using domestic consumption as a basis for expanding "sensitive" products' quotas, Falconer said.

But a number of areas did not show enough convergence for him to be able to capture enough to put into a revised draft text that could lead to "closure", he added.

[Asked for an overall assessment of his consultations last week and this week, Falconer told journalists before the start of the informal meeting that there was healthy, incremental progress but nothing dramatic, startling or decisive.]

Falconer told the informal meeting Friday that the consultations on most of domestic support and market access passed swiftly because negotiators had little or nothing new to say.

On the Green Box, Falconer said that some progress was made on two technical issues.

According to trade officials, one is a provision dealing with developing countries' purchases from poor farmers for food security stockpiles. Because the purchase price could be higher than a market or reference price, in principle, this could distort markets, but because the effect is likely to be small, it is handled in the Green Box.

Proposed amendments would make the provision easier for developing countries to use, but some members are concerned that this might allow distortions in the Green Box.

Falconer said that the solution might be to treat these as (distorting) supports outside the Green Box, but in a way that would allow the purchases to take place.

The other technical issue in the Green Box area that Falconer referred to is reported to be the concept of "fixed and unchanging" base periods of a number of supports (the draft text uses this phrase for decoupled income support, structural adjustment programmes, and assistance for deprived regions). Opinions vary on how strict this should be. Falconer said that the discussion made a possible solution easier to see.

On domestic consumption base for tariff quota expansion (in relation to the treatment of sensitive products), trade officials said that those who had wanted the expansion to be based on imports rather than domestic consumption have now agreed to work with consumption.

But differences remain on the level of detail for defining products - the more aggregated 6-digit coding of the harmonized system of customs classification, or the more detailed 8-digit coding.

According to trade officials, the "Friends of the Chair" Group has now reported on the inconclusive outcome of its consultations.

[Participants in the "Friends of the Chair" discussions were the US, the EU, Brazil, India, Japan, Australia, Canada and Argentina. They presented Falconer with a paper that outlined two options for the treatment of sensitive products: Method A which would allow designation and TRQ expansion using a consumption proxy at the bound level (generally at 8-digit level); and Method B which would allow TRQ expansion using consumption at the product level only.]

According to trade officials, Falconer had asked members who had spoken the most on this issue to look at the data and try to find a solution.

Their report shows that differences remain, but these are clearer and the clarity did help to move the process forward, Falconer said, like peeling away layers of onion.

If this issue is so vital to members, they should resolve their differences. Otherwise, he would have to make his own assessment in the next revision, the Chair cautioned.

With regards to the process, Falconer said that for the revised draft "modalities", there will be two options - one is for him to guess where the acceptable middle ground is, while the other is for members to supply their own compromises.

There is only one "sensible way of doing this", the Chair said, but it is "still elusive." He cautioned that if he has to guess, then there is only a 50% probability that he will be right and if there are 50 outstanding issues, then 25 of his guesses will be wrong.

Falconer said that the hope is that "the prospect of imminent death will focus your minds wonderfully."

According to trade officials, some developing countries urged the Chair to give negotiators more time so that the progress that is being made can continue.

Falconer said that if members really do start compromising with each other at a much swifter pace, he will not stop the meetings. But, he said, there are no signs of movement away from entrenched positions on the major outstanding issues.

According to trade officials, countries calling for more consultations, either into next week, or beyond the week after, were Cuba, Venezuela, the Philippines and Paraguay.

Some of them said that they prefer to settle the remaining issues in the Chair's consultations because these are more "inclusive" than meetings of groups of ministers.

The Chair replied that there is little point in holding meetings where members simply repeat their positions or their "positions with knobs on".

"There's no point in saying you've got seven weeks because you'll take 23," Falconer said. But if a flood of compromises emerge, naturally the talks would not be brought to a halt.

According to trade officials, Cuba was of the view that progress was being made and they would rather not tie themselves to one week. There are a lot of topics that are of interest to developing countries such as Special Products and the Special Safeguard Mechanism, and these should not be confined to one afternoon.

Venezuela supported Cuba. They thought that the discussions should continue because they are making progress. According to trade officials, Venezuela said that the alternative to continuing among themselves is that a handful of ministers will come to meet here. It said that they would rather continue to work with the Chair because if they work with the Chair, there is a chance that the process would be more inclusive.

Nicaragua expressed concern about tropical products. Costa Rica supported Nicaragua on tropical products.

According to trade officials, the Philippines said that the Chair's duty is to produce a text that is the best approximation of members' positions and be faithful to the decisions that members have taken. It agreed with Cuba that more time is needed for issues of interest to developing countries.

Meanwhile, speaking to journalists after the informal meeting, Falconer said that members have been moving since July and he thought that this was positive. But they have to accelerate the process on a range of issues, he said, adding that if they just want to sit in the trenches on some of the remaining issues, that won't get us anywhere.

Referring to the Friends of Chair paper on sensitive products, Falconer said that this was a concrete sign that members have accepted the methodology that had been put forward in his first draft. There had been enough discussions among each other to clarify the nature of the choices they now face. It has put him in a better position than before the paper was produced, said Falconer.

Asked about the core group process (involving senior officials from the G4 plus Japan, Australia, Canada, Argentina, Jamaica, South Africa, China, and Indonesia), Falconer said that they had de-briefed him on where they got to and this pretty much aligns with his sense of where we are.

He did not think that they are any further advanced than is being reflected under him, but they are engaged among themselves to make the effort, he said, adding that they have reached a point of near exhaustion after two weeks of doing that and need a break to reflect on where they are.

"If there is a huge appetite to keep going, then fine... but at a certain point you've got to say how much longer do you want to go on."

[Falconer met with the senior officials right after his Room E consultations Thursday evening. According to a trade diplomat who had attended that session, the participants appeared to have portrayed a rather bleak picture of the situation.]

Asked about the senior officials' meeting and the fact that they appeared to have painted a rather bleak picture, Falconer said that they have.

Pointing out that he is only the agriculture chair, Falconer said that at the end of the day, there is no getting away from the fact that there is a bigger process here which weighs upon this exercise.

"We are not doing agriculture in chronic isolation from everything else. The reality of what is going on vis-a-vis NAMA undoubtedly weighs on what we are doing here... The context of the moment affects what is going on here and that needs to be worked through."

This is not going to move in isolation from what happens in NAMA or even some other things, he said, pointing out that he did not have the authority to deal with these other things.

Within the bubble we are working on, we are moving reasonably well, Falconer told journalists. But outside the bubble, there is a lot of activity going on that we don't have any control over.

 


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