TWN Info Service on WTO and Trade Issues (May08/27)
28 May 2008
Third World Network

Agriculture: G20 calls for real subsidy cuts at meeting on new WTO text
Published in SUNS #6482 dated 27 May 2008

Geneva, 26 May (Martin Khor) -- The global food price crisis makes it more than ever imperative to effectively reduce trade-distorting subsidies in developed countries and have effective product-specific disciplines for limiting agricultural subsidies, said the G20 in its reactions to the revised agriculture text at a meeting at the WTO on Monday.

The G20, a major grouping of developing countries, also complained about the catering to developed countries' concerns, which reduced the level of ambition of their commitments. It said that the Chair had also introduced options or alternatives that could drastically alter the scenario of market access to developed countries' agricultural markets.

Brazilian Ambassador Clodoaldo Hugueney spoke on behalf of the G20 at the open-ended informal meeting on agriculture held to hear initial reactions to the 19 May revised modalities draft issued by the Chair of the WTO agriculture negotiations, Ambassador Crawford Falconer of New Zealand.

He said that the "constant accommodation of developed countries' sensitivities and concerns has a price in terms of the level of ambition" and that this will affect significantly the final balance in the negotiations.

The G20 asked for clarity of options presented by the Chair, in order to assess the balance in the market access pillar and its relation to the NAMA text, as mandated by the Hong Kong Ministerial Declaration (para 24).

"Your text introduces options on key issues like sensitive products, special safeguard, tariff simplification," said the G20. "Depending on the option taken, a completely different picture would emerge. Not all the alternatives would fulfill the mandate for substantial improvements in market access."

The G20 also reiterated its position that there should be a cap placed on agricultural tariffs (which would limit the tariffs to a maximum level). It complained that this tariff capping "remains absent" in the revised draft, although its inclusion was supported by a large number of developed and developing countries.

Ambassador Hugueney said that the "buy-out" solution in para 75 of the Chair's paper is inadequate and at odds with the mandate that requires a comparatively high level of ambition for agriculture and NAMA.

The G20 also reiterated its position that the present special safeguard (SSG) in developed countries should be eliminated from the start of the implementation period, and that there be full tariff simplification.

"A true process of reform in agricultural trade would be incomplete with the partial elimination of the SSG or partial simplification of tariffs," said the G20. (The revised draft allows the SSG to continue, with some conditions).

On sensitive products, the G20 insisted on meaningful expansion of tariff rate quota that "effectively compensates for the deviation from the formula." It added that data and complete information to assess TRQ expansion must be on the table.

In its introduction, the G20 said that the Chair's text is a good basis to build on. It added that circumstances in global agriculture trade had changed and this has a bearing on the negotiations.

Rising food prices have led to growing concern in developing countries on food security. The Round should help provide a long-term solution, taking into account the developing countries' needs.

"In this context, it is more than ever imperative to reduce effectively the levels of trade-distorting subsidies in developed countries. Current food price levels will require significant reductions of subsidy levels to meet the commitment to make effective cuts.

"Developed countries bear the main responsibility for this reform. They must demonstrate their readiness to make a decisive contribution for the success of the negotiations."

The G20 stressed the central linkage between effective cuts in overall trade distorting support (OTDS) and product-specific disciplines.

"These disciplines should prevent concentration of support and be effective. Given the current food prices, we have doubts, for instance, on the need for further flexibilities in the phase-in of product-specific AMS (aggregate measure of support) limits, as expressed in para 26, and in the head-room numbers for the Blue Box product-specific limits (para 42)."

The G20 said that modalities should also address the specific mandate for cotton and it welcomed the preservation of the Cotton-4 proposal in the text.

The G20 concluded that the outcome of negotiations must be pro-development and sufficient to guarantee food security, livelihood security and rural development to developing countries. This should be achieved through effective special and differential treatment (SDT) and other flexibilities for small economies and recently acceded members.

(The meeting was still in progress at press time. The SUNS will report on other WTO members' statements and the remarks of the Chair in its next issue.) +