TWN Info Service on WTO and Trade Issues (Mar08/06)
5 March 2008
Third World Network

Agriculture: Little progress, talks to pause for a week

Published in SUNS #6427 dated 4 March 2008

By Kanaga Raja, Geneva, 3 Mar 2008

Following two weeks of small-group talks that produced little results, the agriculture negotiations at the WTO will be taking a pause this week. Members can use this time to discuss issues among themselves before the full membership meets again on 10 March to assess the situation and decide how to proceed from there.

This was announced at an informal meeting of the Special Session of the Agriculture Committee on Friday (29 February) where the Chair of the negotiations, Ambassador Crawford Falconer of New Zealand, reported to the full membership on his "Room E" consultations (among some 37 representative delegations) which took place on 25-29 February.

It was obvious from the Chair's statement to the meeting, and from comments he made to journalists after the meeting, that there has been very little progress in the last fortnight's Room E talks, and that Falconer is finding it difficult to have anything new to enable him to draft a new revised text before the "horizontal process", which is rumoured to start in the week of 17 March.

"It's virtually inconceivable that I'll have a revised text (at the 10 March meeting)," he told the meeting.

Later, speaking to journalists, Falconer said that there had been no shift in positions in the main points of contention. And that it is difficult to reconcile the time frame (i. e. to start a horizontal process) with how much work that still needs to be done. If we had another three months, it would be alright, he said, but he questioned whether it is really possible to finish around Easter, which falls on 23 March.

According to trade officials, Falconer said that delegations have now gone through the whole of the revised text - but not every detail - producing some advances on some points but not enough to justify another revision of the text at this stage.

The discussion of the revised text (issued on 8 February) has taken two weeks, with the bulk of the time spent on market access issues.

Trade officials said that among the areas that the Chair identified as showing the most promising signs are a new conciliatory mood in tropical products and preference erosion. However, this has still not progressed far enough.

"It's virtually inconceivable that I'll have a revised text (at the 10 March meeting)," he said, replying to a question from Venezuela.

The Chair also reported that a group of "data providers" have said that they are close to completing the calculations they would like to use to estimate domestic consumption (in relation to Sensitive Products). They said that the data would be available to other members at the end of the week (of 3 March).

However, according to Falconer, this would mean a further delay because countries that are skeptical about the approach would need time to look at the data and to discuss it with the data providers. The Chair observed that they would only just have started by the time the group meets again on 10 March, casting doubt on members' own objective of sorting things out by Easter.

This could be particularly important, said Falconer, because he sensed that a number of negotiators are holding back on a number of issues until they can see more clearly what is going to happen on Sensitive Products.

According to trade officials, following that discussion, the EU said that it would supply its data at the beginning of the week. Falconer said that this was a welcome move and hoped that others would do the same.

On Special Products, the focus this week was on the indicators - Annex F of the revised text (previously, members had discussed how many SPs there would be and what kinds of tariff reductions they would have).

Falconer said that he had told members that in his opinion, one of the proposed 12 indicators (which come from a G33 proposal), would make all agricultural products eligible for being "Special", and render the remaining indicators "academic".

(According to trade officials, this is understood to be indicator No. 11, which says that any product that has received Amber Box or Blue Box trade-distorting support in any country at any time since 1995 would be eligible.)

Falconer added that he still holds that view. He reported that Members expressed opposing opinions on whether they could accept some or all of the proposed indicators, and they said that they were willing to discuss these, but he did not detect any real discussion.

The Chair noted that there was a "new contribution" from "some members" (the US and some Cairns Group members not in the G33) but others opposed the proposal.

As to the Special Safeguard Mechanism (SSM), the Chair said that some technical questions were clarified. The Chair described the discussion as "quite good" because it allowed some complex issues to be "de-constructed".

One was the possibility that developing countries that do not use the older Special Safeguard (SSG) even though they are entitled to, might be willing to give up their entitlement in return for being allowed more flexible terms for the new SSM safeguard. This, said Falconer, may have created some "negotiating space".

According to trade officials, Falconer observed that some members (he was presumably referring to G33 members) had described his paper (on SSM) as "too restrictive". Overall, trade officials said, he rejected the description because all the G33's proposals are included as options in the paper, which naturally also includes as options other members' alternative positions.

The only exception, said Falconer, is in Paragraph 126 where he includes a proposed limit on the number of products that could have the safeguard triggered in a particular year, which, he said, reflects earlier discussions about not using the safeguard too many times.

With regards to tropical and diversification products, trade officials said that the main topic of discussion was the list of products concerned. Although differences remain, supporters of the two rival lists (Annex G of the revised text), have been talking among themselves to see if they can narrow down their differences. This desire to accommodate each others' concerns is positive, according to the Chair.

Falconer suggested that negotiators from the two sides (essentially, the Cairns Group and EU) continue step by step: first, identifying products that are not controversial because they are on both lists; then identifying those with low tariffs of 10% or less where being identified as "tropical" will not make much difference to the final tariff after the normal formula cut has been applied. That would leave products with higher tariffs and a "hardcore" of really controversial products, which members could negotiate more easily, the Chair added.

Long-standing preferences is an area where some progress has been made, the Chair reported. A group of countries had previously insisted that the only action to be taken should be in the form of aid. Now, they have accepted some "trade" treatment, a concession that has allowed the discussion to focus on the period for implementing cuts, Falconer said.

On the Green Box, the Chair highlighted two areas that were the focus of discussions. One, a footnote dealing with developing countries' governments buying food to stockpile for food security, can be redrafted to meet various concerns, Falconer said.

The other remains a point of strongly differing views. This deals with ensuring that income and other supports that are "decoupled" from the market are based on "fixed and unchanging base periods", at the same time allowing some changes due to changing circumstances, but in a way that does not lead farmers to expect more support if they produce more.

As to the various forms of distorting support, the Chair said that he received some answers to some questions that he wanted clarified, and members suggested some alterations to the text. (According to trade officials, the main formulae for reducing these supports were not discussed.)

As to the issue of export competition, the Chair reported briefly that members offered some suggestions for amending the texts (on export finance and international food aid), and that some members raised the question of export restrictions.

Looking ahead, Falconer explained why he could not produce a new text by the 10 March meeting.

Anything that goes into a text has to have been discussed multilaterally, and based on what he has heard so far today (Friday), there is not enough to revise the text, according to Falconer. And even if there is any progress in the coming week, it will not have gone through the "multilateral filter".

If there is progress in various consultations in the week of 3 March, then members may have a lot to discuss in the week of 10 March. Otherwise, they may have little to discuss. Either way, on 10 March, they would have to decide what to do next.

According to trade officials, only two delegations spoke. Venezuela asked whether the Chair would revise the text, while Cuba urged members to support the Chair. +