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TWN Info Service on WTO and Trade Issues (Feb08/23)

28 February 2008


Please see below an article on the WTO agriculture meeting on Fri 22 Feb during which the chair of the negotiations reported on the week of talks of 18-22 Feb.

This was published in SUNS of 26 Feb.  Reproduction requires permission of SUNS (sunstwn@bluewin.ch).

Regards
Martin Khor
TWN


Agriculture: Chair reports not much progress after a week of talks
Published in SUNS #6422 dated 26 February 2008

By Martin Khor, Geneva, 24 Feb 2008

The first full week of agriculture negotiations that took place on 18-22 February following the issuing of the revised agriculture text of 8 February has not resulted in much progress, and more negotiations this week is also not expected to see much progress.

This seems to be the conclusion by the chair of the WTO's Doha agriculture negotiations, Ambassador Crawford Falconer of New Zealand.

Speaking to journalists on Friday (22 Feb) after an open-ended informal agriculture meeting to review the week's talks, Falconer said that "at the rate we are going we can't narrow things down... What do you expect? It takes time to digest."

Falconer however recognized that time is running out, as he told reporters that the point is that "we cannot postpone" the time (needed to narrow the gaps).

During that week, only the market access issues in his text had been discussed. In fact, the controversial issue of special safeguard mechanism, where there are major and sharp differences of views, had not been covered, and is scheduled to be discussed on Monday (25 Feb).

Falconer will convene Room E small-group meetings (to which 36 delegations are invited) on Monday to Wednesday, and if needed on the next two days as well, and then call an open-ended meeting next Friday to inform all members of the progress.

Domestic support issues are expected to be discussed in Room E on Tuesday, and the most awaited question is whether the United States will make a fresh offer or name a new number on the maximum level of its "overall trade-distorting domestic support" (OTDS).

At the end of the week, the situation will be further reviewed, said Falconer. He however dismissed the prospect of yet another week of Room E negotiations.

He is expected to issue another revised text, following all the Room E meetings and another open-ended meeting. "We need a revised text to meet the time frame people are talking about, and make the process manageable for Ministers," he said. "But I am not saying I'll get it today or the end of next week."

On whether a Ministerial meeting will be held and when, Falconer said everyone says there will be one, "but I work on faith not assumptions, I recognize what they say, I am a humble tool. Is it around Easter? If they say so AI will try to do what I can to be consistent with that."

Removing the square brackets (i. e. reaching agreement) in the text is doable, and there is no technical reason why it can't be done, said Falconer to the journalists. But the moment to do it with success is not yet there. "We are not ready for a ride now," he said, adding that while it is doable, conversations must also take place outside of the agriculture talks.

And if things carry on as they have done, we won't be closer at the end of next week to do it (close the gaps), he added.

According to a trade official, at the Friday (22 Feb) open-ended meeting, to which all WTO members are invited, Falconer told the members that what had been discussed so far in the restricted Room E process earlier that week has not been enough for him to revise the 8 February draft text in the areas that have been discussed, although some progress has been made on some points.

He indicated that the lack of movement could be in part due to members waiting for movement in areas outside agriculture.

He was not surprised at this state of affairs, because this was a first reaction to a new draft. Using war analogy, he said the present stage of negotiations was one that no longer involved shooting from a distance, but "hand-to-hand street fighting" in the final phase of the battle.

Falconer asked delegations how they would like to proceed. According to a trade official, only one was specific. The EU wanted the "modalities" to be agreed by the end of April, so that the entire negotiation could conclude by the end of the year.

Some other delegations referred to their preference for a "step by step approach." After more discussions in the next two to three weeks, members should assess the situation and decide what to do next, many said.

Reporting on the week's Room E discussions, Falconer said that the group had worked through his revised text, covering only market access issues, and reaching Special Products. He then reported on what had been discussed in each area.

On the tariff formula, Falconer said he suggested simplifying the present ranges of cuts in the tiers into single figures that "split the difference" between higher and lower numbers in the ranges. He reported there was no agreement on consensus on this, but also remarked that he thinks the final outcome will be somewhere close to those figures.

On the much-discussed issue of his inclusion of a 54% minimum average cut for developed countries' tariffs in the revised text (it was not there in the original text), Falconer said members wanted to follow the "rule of two-thirds" where numbers for developing countries tend to be two-thirds of those for developed.

The developing countries would have a maximum average tariff cut of 36%, which would be two-thirds of the 54% for developed countries, but as a minimum. The option of a 40% maximum average for developing countries was dropped because it would have meant a 60% minimum average for developed countries, which would have been too high, he explained.

Falconer reported that a number of countries opposed the 54% minimum. At the meeting, Switzerland confirmed that the G-10 is one group opposing it.

Falconer remarked that the opposition is political rather than "mathematical" because in practice it would not have a major impact on tariff cuts.

On Tariff Capping, Falconer said positions for or against largely remained unchanged although some "exporting countries" were willing to explore more flexible options that were also comfortable for them. The G10 is known to oppose tariff capping as well.

On Sensitive Products, Falconer said that among the many issues discussed, the key remains the question of estimating the relevant size of domestic consumption for sensitive products that are defined at a disaggregated level.

[For example, hard cheese is a type of cheese described at a disaggregated level. The tariff quota sizes will be related to domestic consumption, whose data are often unavailable at a disaggregated level].

Falconer said this complex technical task is still being undertaken by a group of countries and there is little he can do until they produce results. He however e insisted that the data will have to be available before modalities are agreed, even if the sensitive products are identified later, otherwise negotiators will not know what they are "buying into".

He also reported that some progress was made on how to allow developing countries to label products as sensitive even if there are no existing tariff-quotas on those products, a condition that might apply for developed countries.

On Special Products, Falconer said that the biggest question is whether some special products would be totally exempt tariff cuts. The two sides of the debate want either none at all or a largish number. He predicted that some would have to escape cuts, but not many.

He added that provisions for small and vulnerable economies (Para 124 of his revised text, which essentially sets them an average tariff cut of 24% with no other constraints) were clarified to allow these countries the flexibility they seek, at the same time meeting their desire to describe the flexibility as "Special Products".

On other issues, Falconer reported there was some constructive discussion but not much progress on tariff escalation, tariff simplification, in-quota tariffs, tariff quota administration and preventing the methods used from acting as an additional trade barrier, and the present special safeguard. +

 


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