TWN Info Service on WTO and Trade Issues (Mar08/13)
18 March 2008
Third World Network

Agriculture: Most countries want primacy of "substance over deadlines"
Published in SUNS #6433 dated 12 March 2008

By Martin Khor, Geneva, 11 Mar 2008

The primacy of substance over deadlines seems to be the demand of most WTO members, particularly the developing countries and their groupings. This was clearly expressed at the latest open-ended agriculture meeting held on Monday (10 March).

This clear demand is very significant because there is a central tussle at the WTO at the moment between those stressing the need for concluding agriculture and non-agricultural market access (NAMA) modalities as soon as possible (within a few weeks), and those that want a bottom-up inclusive process to continue, even if it takes more time.

Those stressing deadlines want to move quickly to the "horizontal process" (where a small select group of senior officials and later Ministers meet in a "Green Room" format to discuss agriculture and NAMA together).

Those who prioritise getting the substance right want to continue with the "multilateral process", a code for the Room E and open-ended meetings within the agriculture and NAMA groups, and which are more inclusive than the "Green Room" horizontal process, the planning and details of which are known to only a few.

Monday's agriculture meeting was a test to see which approach would win for now - the horizontal or the multilateral. The multilateral came out on top.

The chair of the agriculture negotiations, Ambassador Crawford Falconer, asked the delegations to choose between four options, the main ones being to ask him to come up with a revised text within a few days (even if, as he admitted, there was nothing really new to add to the last draft at this stage), just to be able to meet a pre-Easter or Easter deadline. Or to take more time in the "multilateral process" to resolve issues where differences persist, and to produce a new text only when there is more agreement.

According to trade officials, no member asked the Chair explicitly to rush to produce a new and meaningless draft. But a few members did stress the urgency of meeting deadlines, with the implied message that the bottom-up multilateral approach cannot go on for much longer.

The EU seemed to be the member most in a hurry. It called for a speedier schedule. It said the chairperson should use the progress that has been made, together with his own judgment, to assess where the middle ground might be.

Ideally, said the EU, a revised draft should be circulated by Easter (Easter Sunday is on 23 March). The negotiations should then "go horizontal" with "breakout groups" continuing to focus on each of the two subjects after Easter, so that the "modalities" can be agreed on by the end of April.

It was not clear to many how the "horizontal" (presumably a Green Room type process chaired by Director General Pascal Lamy) would co-exist and synchronise with "breakout groups." But it was clear the EU had a time-table and a process plan, and its aim is to get to a final outcome as soon as possible, within 7 weeks.

Brazil said that the Chair's option 3 (to continue with the multilateral process) is the "unavoidable one". But this can only have credibility if progress can be made in the Room E meetings. Brazil wanted to inject a sense of urgency for results to be obtained from the Room E process.

[The Brazilian Minister Celso Amorim, in a well-quoted statement in Davos in January, had said that the Doha talks are moving from a window of opportunity to a window of necessity. The Brazilian emphasis on urgency to get results is in line with Amorim's quote].

Many other members put their stress on getting the substance right. Most speakers said they prefer to continue with the multilateral process. This indicated their disagreement with any plan to shift the talks now to the horizontal process.

[Originally, according to some trade diplomats, the plan (apparently by Lamy) was to have the horizontal process start on 17 March. However, due to the slow progress of the talks in the two groups and the inability of Falconer to produce a new text containing significant new things, the start of the horizontal has been postponed to after Easter; but when after Easter is not clear. See SUNS #6430, 7 March].

Many speakers said progress on the issues being discussed (ie, on "substance") should drive the talks, not deadlines. The G33, Africa Group and other developing countries stated this, and so too did the G10 developed countries. The developing countries wanted the chairperson to draw on what members say in order to make further revisions, and not to try to invent an artificial compromise.

Mauritius, speaking for the Africa Group, said they rejected those options put by the Chair for quickly coming up with a revised paper. It said there are still too many unresolved issues. It stressed that there should be no artificial time lines, and reminded members that having such time lines had failed in the past.

The Group wanted a process that was Chair-driven, preferably in the Room E format. The text should be revised by the Chair, and development concerns should e fully reflected. It was not the time yet for a horizontal process.

The G10 developed countries, represented by Switzerland, also stressed that "the substance has to determine the process, not the other way around." The G10 lent its full support to the Chair's process which "touches on all subjects and which allows for all sensitivities to be expressed, this represents the best way forward." Any further revision of the text should be first discussed under the Chair's guidance.

The G33 developing countries, represented by Indonesia, said the group is concerned that there has been no significant movements to achieving progress and moving the process forward. For the G-33, the process should remain "substance driven". Significant modifications are needed to the current draft text so that it reflects a more balanced text.

The current Revised Draft Text, to a certain extent, provides the possibility to make progress and the Group has presented its detailed views on SPs and SSM during the Room E discussions. The G-33 said it was ready to be constructive, but only in a balanced manner. It will not entertain "hardening and maximalist" positions.

It reminded other members that the G-33 has been the one group that has demonstrated significant movements, giving concessions and flexibilities. "Progress and encouraging developments in other crucial areas of the agriculture negotiations - including flexibilities on SPs & SSM by our negotiating partners - are still very limited or even nothing at all."

On process, the G33 proposed to continue the work based on a substance driven process. "Our work has to reach the point that everyone has the comfort to continue to another step. We must continue our process up to that point is reached - and most importantly without any unrealistic pressures of certain artificial timelines.

"Substance must drive and guide our process ahead. It is highly necessary that a more developed draft text is made available before we, the Members - can further decide on any other step forward," said Indonesia.

The G-33 supported that the Room E discussions be continued. It said this should be seen as another attempt to providing possible narrowing of gaps and convergences on the substance.

China said "it is our view that the substance is the most important element in guiding our process forward. It is in this regard that a new revised draft modalities text is very important before we enter into whatever the next process would be, and it is necessary the new version shall have necessary modifications with the objective to have more balanced outcome of agriculture modalities."

China said it  therefore prefers option 3 (the multilateral process to continue) for a balanced text as the base for horizontal negotiations.  "We are of the view that Members need more time in Room E process plus open-ended meetings if possible and continue to work based on the substance driven process."

The United States made a low-key statement. It said that it will continue to be engaged, will continue to consult on sensitive products, and with regards to the Chair's options, the situation would be clearer after the next 4 days.

At the end of the meeting, Falconer concluded that not enough has emerged since the last open-ended meeting on 29 February to justify revising his 8 February draft "modalities". Various consultations will continue, and members will meet again on Friday afternoon (14 March) to decide what to do next.

The most urgent plurilateral meeting that is to take place this week is that of the "friends of the chair", or around 11 members that are trying to resolve the question of estimating domestic consumption of agricultural products at a disaggregated level (because data are unavailable at that level of detail) in order to calculate tariff quota expansion for "sensitive products".

At stake in this issue is the amount of additional market access that agricultural-exporting countries can obtain through an expansion of the volume of tariff rate quota that importing countries have to provide, in exchange for the more lenient cuts they are entitled to for their designated "sensitive products."

The group of 11 members include the main importing developed country members, and the main interested countries that export. Six "data suppliers" (understood to be the EU, US, Canada, Norway, Switzerland and Japan) have finally supplied their data to the exporting countries, the meeting was told.

Several exporters (Australia, Uruguay, New Zealand, Argentina, Brazil) said they were disappointed with the data and would need some time to examine the figures and try to resolve differences with the six before taking the issue to the full membership.

According to trade officials, the exporters said they remain sceptical about the approach taken by the importers. They prefer the Cairns Group's proposal to use broader product categories (for example, cheese as a whole rather than "hard cheese" or the even more disaggregated "cheddar") where consumption data are normally available and do not need to be estimated.

The exporter countries also complained that the data provided by the importers show even less market-opening than had been previously envisaged, for some important products such as sugar and rice, and they continued to disagree with the handling of processed products in the estimation.

According to a trade official, the purpose of the data is to allow members to identify a limited number of products as "sensitive", which would have tariff cuts that are smaller than the rates dictated by the formula. In return, countries have to provide additional market access on these Sensitive Products through tariff quotas, where the tariffs on quantities inside the quotas are lower than the regular tariffs outside the quotas.

The size of the quotas would be based on domestic consumption, which would have to be estimated if the products are identified at detailed, disaggregated levels. It is those estimates of the products at the disaggregated levels that are proving controversial.

The inability of the small group of exporters and importers to reach an agreement on the methodology or even the provision of adequate data is one of the main reasons why Falconer has delayed producing his revised paper.

At the next meeting on Friday, the "friends of the Chair" are expected to report on whether they have made progress in their negotiations this week. If they have come to an agreement, it will give a fillip to the agriculture talks. If their disagreements continue, it would be a signal that the Chair's next draft will be further delayed. +