TWN Info Service on WTO and Trade Issues (June08/09)
16 June 2008
Third World Network

Agriculture: Chair reports "incremental progress", further talks week of 9 June

Published in SUNS #6489 dated 5 June 2008 

Geneva, 4 Jun (Kanaga Raja) -- The Chair of the agriculture negotiations at the WTO on Tuesday (3 June) reported "incremental progress" in the negotiations, and indicated that he would hold further meetings in the week of 9 June.

Chairman Ambassador Crawford Falconer of New Zealand was briefing members at an open-ended informal meeting on his consultations among 37 representative delegations.

Speaking to the media after the meeting, Falconer said "I think that we made incremental progress". He pointed out that what was more significant was some engagement by members on some issues. "We've certainly got plenty that we can go on with," he told journalists. (See below.)

(The report of some progress by the chair of the agriculture talks and his decision to continue talks next week contrasts sharply with the situation in the NAMA negotiations where the NAMA Chair, Canadian Ambassador Don Stephenson, suspended further meetings of the NAMA Group on Monday, complaining that nothing was achieved during the week of talks, and that until members work among themselves to bridge their positions, it was pointless to continue to convene NAMA negotiating group sessions.)

A major highlight of the informal agriculture meeting was statements made by the G20 and the Cairns Group of agricultural exporters criticizing the new US Farm Bill as a step backward and urging the United States to show leadership by committing to substantial and effective cuts in subsidies. (See separate article.)

According to trade officials, the US responded by saying that the bill was needed because the previous law had expired and without a new one, US legislation would revert to an old law which had even larger subsidies. The US said that it would implement the new bill within it's current commitments and would amend the bill in order to comply with whatever is agreed in the Doha Round.

On the issue of domestic support, Falconer reported to the full membership that he felt that there was no need to go into issues that are clearly political, such as the numbers in the formulas.

According to trade officials, among the provisions discussed were (paragraph numbers are those in the 19 May revised draft text):

  • accounting for rising prices in calculations of Amber Box support (Para 20).
  • whether or not flexibilities designed for particular members on Amber Box limits per product go too far (Para 26).
  • cuts on de minimis. (Para 30). The Chair said that he felt that options of 50% or 60% cuts are not significantly different. The discussion was inconclusive but some points were clearer, he said.
  • a similar question about the option of a 110% or 120% figure for limiting US payments per product under the new type of Blue Box - that is, proposed limits on payments per product as a percentage of a calculated average legal limit in a base period (Para 42).
  • how much flexibility should be given to developing countries wanting to use the Blue Box when they did not use it before (Para 50). The discussion was inconclusive, Falconer said.
  • clarification that recent new members will not have to phase in their reductions faster than developing countries (Para 51).
  • how to deal with exceptional changes to "fixed and unchanging" historical base periods for decoupled income support in the Green Box (Annex B, on paragraph 6 of Annex 2 of the Agriculture Agreement). Falconer said that he felt that the differences could be resolved.
  • how to deal with provisions on developing countries buying produce from poor farmers to stockpile for food security (Annex B, on footnotes 5 and 6 of Annex 2 of the Agriculture Agreement). Falconer said that the present text is "not a million miles away" from what can be agreed.
  • cotton (Paras 54-55). According to trade officials, there was nothing new on this.

On export competition, Falconer said that details in the text are not settled but "reasonably stable".

  • Export credit (Annex J). According to trade officials, the text is close to the final version, with the discussion focussing on the period for determining if a credit programme is self-financing. The options are 4 or 5 years. The Chair indicated that from the discussion, he could pick one, with a suitable "knock on" figure for developing countries. Perhaps, the most contentious part of the text is the repayment period for least-developed and net-food importing developing countries, Falconer reported, with some countries seeking more flexibility than the present proposed limit of 540 days, or more in exceptional circumstances (Para 5 of the annex) - this might have to go to ministers, he said.
  • Exporting state trading enterprises (Annex K, par. 3 (a) (iv)). Trade officials said that there was no change (monopoly power of such enterprises remains the controversial issue).
  • Food aid (Annex L). Trade officials said that the discussion focussed on the wording for issues such as what kind of assessment of need is appropriate and feasible in real situations, and on "monetization" in emergencies and situations that are not emergencies.
  • Export prohibitions and restrictions (Paras 154-160). Japan and Switzerland circulated a revision to the paper first submitted a few weeks ago, but some members objected strongly, Falconer reported.

On market access, Falconer reported that in this area, it is clear that some questions are political (to be settled by ministers).

  • Tropical products and preferences (Paras 134-137 and Annexes G and H). The countries negotiating these subjects privately have not reached agreement but reported progress, Falconer said.
  • Recent new members dislike the provision allowing a 10% deviation from the tariff cutting formula for higher tariffs (in the top two bands) and 5% for lower tariffs (bottom two bands), and he will revert to the single 7.5% deviation of an earlier draft, the Chair said.
  • Sensitive products' treatment (Para 74). Some members say that the proposed expansions are not proportional to the range of deviations, but others are pulling in the opposite direction, so "what you see is what you'll get", Falconer reported.
  • Sensitive products for developing countries (Para 77). The Chair said that members did not enlighten him on how to deal with this.
  • In-quota tariffs (Para 103). Trade officials said that the debate is about whether in-quota tariffs should be zero/low or some form of formula cut should be applied. Falconer said that the discussion on this complex question was good. Members said that they would like to consult each other in smaller groups, which would be an appropriate way to proceed, he added.
  • Tariff escalation (Paras 79-85 and Annex D). The main issue here was adding "other wheat" to the proposed list, with no apparent opposition, the Chair said.  (According to trade officials, Switzerland later said that it has to discuss including cereals.)
  • According to trade officials, there was no change on commodities (Paras 86-97) and tariff simplification (Paras 98-102).
  • Special products and the special safeguard mechanism. These developing-country issues will be discussed next week, Falconer reported.

According to trade officials, Uruguay and the EU said that the time has come for the membership as a whole to make significant moves towards agreement. The EU repeated its comment in the 26 May meeting: "Those pushing for slippage are pushing for failure."

Trade officials said that Cuba complained about what it called the imbalance in flexibility between developed and developing countries.

The EU and Switzerland reiterated their call for the "horizontal" negotiations to include geographical indications. Argentina however opposed including geographical indications. It also echoed the views on the US Farm Bill.

Switzerland said that around 30 members support the Swiss-Japanese proposal on export restrictions (including the European Union's 27 members).

Speaking to the media after the informal meeting, Chairman Falconer told journalists that "I think that we made incremental progress".

Some issues are clearer, and "what was more significant was some engagement on some issues," he said, indicating that members want to sort out some technical questions among themselves.

He observed that he and the members have more time for these private consultations since members dropped their original objective of moving in April or May to the next phase of the talks - the so-called "horizontal process" of negotiating a range of subjects together.

He said that he would hold more meetings in the week of 9 June, probably in the second half of the week.

"As long as they (members) still want to keep talking in agriculture, then there is every reason to keep on doing that. We've certainly got plenty that we can go on with," said the Chair.

Asked about the decision by the NAMA Chair to suspend further meetings and its impact on the agriculture talks, Falconer said that "at the moment, I am not predicting that it makes any change to things. But we'll see over the next few days whether it does for some of the delegations..."

Asked if he was doing another revision to his text, Falconer said that a lot depends on what happens. Whether it actually happens depends on the kind of progress that members make over the next period.

"I think there would be time to do another one and hopefully there will be enough progress to do another one."

Falconer also confirmed that he had invited some G33 members and some exporting-country members to try to discuss how to resolve the SP and SSM issues
(the private chat has been nicknamed "walk in the woods"*).

Stressing that this was not a group or a process, he said: "I don't know whether that little meeting will lead to other meetings and if it leads to other meetings, who will be involved in it. It was just a first getting together on that and they had quite a good discussion, good atmosphere. If they want to meet again in the week of the ninth, I may well be happy to chair that."

[* The term "walk in the woods" in international negotiations was used in 1982 when Paul H. Nitze and Yuli A. Kvitsinskyin, the US and Soviet negotiators were negotiating on intermediate-nuclear forces INF. According to the "Peoples Chronology", events of 1982-83 <, Nitze and Kvitsinsky took a walk in the woods outside Geneva on a rainy afternoon in July, sat down on a log in the Jura Mountains, and agreed on a "joint exploratory package for consideration of both governments". That accord though unravelled next year, as President Ronald Reagan, persuaded by hardliners in his administration that the package was to Soviet advantage, in effect ignored it, and launched his Star Wars programme. The Soviets walked out of the INF talks, and Nitze was left without a negotiator. - SUNS] +