TWN Info Service on WTO and Trade Issues (May08/18)
19 May 2008
Third World Network

Agriculture: Talks bogged down, Chair's new text by this or next week
Published in SUNS #6473 dated 14 May 2008

Geneva, 13 May (Martin Khor) -- The agriculture negotiations at the World Trade Organisation have continued to be bogged down by both technical details and substantive disagreements over a few issues, and this may delay the start of an expected meeting of senior officials as well as a small Ministerial meeting aimed at finalizing "modalities."

The Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, told WTO members that his long-awaited revised text of modalities would be issued at the end of this week, or the start of next week. It was earlier scheduled for the end of April and later around 12 May.

Falconer said he expected delegates to take a week to study his draft, and then get back into a discussion in the agriculture negotiating group. By implication, the "horizontal process" involving senior officials and later Ministers of selected countries (that will mainly cover agriculture and non-agriculture market access) will only begin after a round of discussion at the negotiating group.

Besides Falconer's paper, another revised draft - of the NAMA modalities - is also expected to be produced, at about the same time. There will have to be a parallel process of reflection and discussion on this NAMA paper as well.

It thus looks like the "horizontal process" can only start at the end of May or into the beginning of June. That is, if the responses to the two papers are relatively positive or at least not strongly negative.

Timing, right down to days, is crucial at this phase of the Doha negotiations, especially because some key personalities (including WTO Director General Pascal Lamy and EU Trade Commissioner Peter Mandelson) are adamant that the modalities must be finalized by a super Green Room of some 30 Ministers and adopted by the General Council by June.

The key to getting the horizontal process going is the issuing of an agriculture text, and this itself has been bogged down by lengthy informal negotiations in small groups on three issues - tariff quota expansion for sensitive products, and treatment of tropical products and products affected by preference erosion.

At an open-ended informal agriculture meeting last Friday (9 May), Falconer revealed that a group of about 12 members that have been intensely negotiating the sensitive products issues could not reach agreement, and at a larger meeting of 36 members (in Room D) last week, there were also a few members who rejected the approach contained in a document, while more members wanted certain changes such as adding on to the list of sensitive products involved.

"So, surprise, surprise, we have different views about the status of that document," said Falconer, adding that the discussion on this issue will continue.

On tropical products and preferences, a small group has also been working on these issues, but "these discussions have not yet reached fruition", he said. The discussion has mainly been on what should be on the list of products to be given treatment. There will probably not be an outcome for "some days ahead."

Falconer said it was time for him to come out with his revised paper as it was now overdue. But the paper would reflect where the state of negotiations now are, so that if differences still exist, they would be reflected.

"I am not going to invent things, not going to imagine things, not going to provide my best guess, not going to be biased or try to insert things at various people's requests," said Falconer. "I will ensure that on those issues the revised text will protect and reflect the positions those members have had... So that nobody's position is undermined at all. So, no case of partial modalities, no, I am not doing that in my next revision. It will just simply reflect where members are at a particular point in time...

"It is pretty clear to me that on any number of issues, whether it be special products, SSM, OTDS, any acronym you want to name inside that document, there are going to be differences in positions in my next revision which will be reflected because there is not a single agreement that you have reached on a number of those issues at this point in time...

"The next revision will not have a single definitive solution to everything that remains outstanding in agriculture - because you simply have not got to that point yet."

Falconer added that while it was time for him to do a revised text, "I am not saying that it's the final revised text. I don't see it that way. It is the next revision from your Chair. You will have total control over what you want to do with it, if anything. It will undoubtedly need to be further changed, whether under the ambit of this negotiating group or otherwise."

Thus, Falconer seemed to be conveying the message to the WTO members that it was up to them to decide whether they wanted to further negotiate within the group and ask him to produce another draft, or "otherwise" hand it over to the "horizontal process", which will be chaired by Lamy.

It is an open secret in the WTO that Falconer would prefer that the "bottom-up" approach of letting various members and groupings have their say to continue, as he believes that this is the basis for getting a deal done, and that he is against a top-down approach (which the horizontal process represents) in which many members will feel pressurized into accepting a deal.

According to a trade official, several delegations supported the timetable put forward, and stressed that they want to be able to respond to the revised text within the agriculture group. They were against handing over the paper to the "horizontal process."

Egypt questioned whether the original intention to let "substance" determine the timetable had been overtaken by a drive to meet deadlines.

Many members also spoke up that they wanted the next draft to include issues or positions that they have been taking up.

The G-20, represented by Brazil, reiterated the need for the revised text to achieve a reform of agriculture, especially on domestic subsidies. The G-33 insisted that their demands for flexibilities for developing countries to promote food security through the instruments of special products and the special safeguard mechanism be met. (See separate article).

Some members also commented on the consultations in recent days and weeks on the three issues of sensitive products, tropical products and preferences.

On tropical products and preferences, Falconer said those involved in the two topics were trying to reach agreement in time for the results to be included in his next draft. However, they agreed that if they have not finished in time, he should produce his new text anyway.

The main players are the tropical products group (represented by Costa Rica), the countries with preferences (the ACP group represented by Jamaica and the African Group represented by Mauritius), and the EU, which is one of the major importers of these products.

The main problem in the talks has been the conflicting treatment for tropical products (whose liberalization is to be accelerated through deeper tariff cuts) and preference products (whose liberalization is sought to be slowed by more lenient tariff cuts or a longer implementation period in order that countries receiving preferences have more time to adjust to their loss of preference margins).

The proposed lists of these two types of products overlap, thus leading to the contradiction. Besides this, some proposed tropical products are also sensitive products in importing developed countries.

On the attempt to agree on data and an approach to expanding tariff quotas for sensitive products, Falconer reported that a 8 May meeting of 37 delegations that he chaired had shown differences of opinion on a revised proposal from a group of six members on how to estimate domestic consumption. A few opposed the approach in principle, while several others were willing to discuss the approach so long as some modifications were made.

Some major developed countries agreed to provide relevant data before "modalities" are agreed so that members can assess the potential effects on market access of their designated sensitive products.

However, some of these countries (Canada, the US, Australia, and Uruguay) also asked that developing countries also show "transparency" by declaring in advance which products they are going to designate as "Special Products" (which will have no or reduced tariff cuts).

This was countered by India and Turkey who said that data are needed for sensitive products because there are no criteria for the selection, whereas Special Products have to meet the criteria of food security, livelihood security and rural development.

Another issue briefly dealt with was export prohibitions and restrictions. The US mentioned the Japan-Swiss proposal (submitted at the 30 April meeting) for tighter disciplines. The US said the proposal was timely and should include differential export taxes. Argentina, which has long opposed disciplines on differential export taxes (higher taxes on raw materials exports than on processed products), again opposed the proposal. +