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TWN Info Service on Trade and WTO Issues (July08/25)
22 July 2008
Third World Network

Agriculture: North accountable for distortions and restrictions - G20
Published in SUNS #6522 dated 22 July 2008

Geneva, 21 July (Kanaga Raja) -- The developed countries are accountable for the main distortions in agriculture trade and policies, and they must show that they are prepared to live up to their responsibilities of reform by delivering on the Doha mandate for substantial reductions in trade-distorting domestic support, substantial improvements in market access and for elimination of all export subsidies.

This was one of the key messages of the G20 developing countries in a communique issued following a meeting of their Ministers and senior officials on Sunday (20 July) to discuss their approach, just before a WTO mini-Ministerial gathering got underway at the WTO on Monday (21 July).

The G20 also emphasized that the number of flexibilities for developed countries in the current Draft Modalities, which are intended to preserve distortive policy space in domestic support and market access, must be significantly reduced.

In its communique, the group reaffirmed that the unity of the G20, as on previous occasions, would allow it to continue to be a major driving force in the agriculture negotiations. It remains firmly committed to a result that lives up to the Doha Mandate, in particular the common goal of eliminating the trade-distorting policies maintained by developed countries.

The G20 said that it has consistently stressed the centrality of Agriculture in the Doha Round. "Agriculture will determine the level of ambition of the Development Agenda. This is a political imperative deriving from the Doha Mandate to place Agriculture and Development at the heart of the multilateral trading system."

"Developed countries are accountable for the main distortions and restrictions in agriculture trade and policies. At this critical juncture of the DDA (Doha Development Agenda) and of the global economy, developed countries must show from the start of negotiations that they are prepared to live up to their responsibilities of reform by delivering on the Mandate for substantial reductions in trade-distorting domestic support; for substantial improvements in market access; for the elimination of all export subsidies," said the communique.

The G20 Ministers and Senior Officials stressed that a substantial outcome must be achieved in the three pillars of the negotiation. The multi-layered nature of the distorting policies applied by developed countries requires comprehensive solutions in Domestic Support, Market Access and Export Competition.

On Domestic Support, said the G20, it will be necessary to achieve effective cuts in the Overall Trade-Distorting Domestic Support (OTDS), taking into account the change in the pattern of world prices and its impact on current level of domestic support; equally essential are credible and effective product-specific disciplines to avoid concentration of expenditures, with deeper and more expeditious commitments for Cotton; disciplines to ensure that Green Box policies have no, or at most minimal, effects on production and that green programmes of interest to developing countries are addressed.

On Market Access, the G20 communique said that developed countries must deliver an outcome that fulfills the Doha Mandate for substantial improvements in market access and the Hong Kong Mandate for balance between Agriculture and NAMA (Paragraph 24).

The formula for tariff cuts must be ambitious, particularly on the top band, and the minimum average cut of 54% must be respected, in line with the G20 proposal. The tariff capping must be effective and apply for both sensitive and non-sensitive products.

Developed countries must show results of meaningful TRQ (tariff rate quota) expansion that effectively compensate for the deviation from the formula cut for sensitive products, said the G20, adding that it remains firmly against the creation of new TRQs, which would be "a step backwards" in the objective of long-term reform in Agriculture.

The G20 stressed its firm position on the elimination of the SSG (special agricultural safeguard) for developed countries from the beginning of the implementation period. Conversion of all agricultural tariffs to simple ad valorem terms, in line with the G20 proposal, is essential to ensure transparency, predictability, and the overall balance in market access.

Modalities must also effectively deliver on the mandate for Tropical and Alternative Products, Tariff Escalation, and Preference Erosion, as well as effectively address the particular concerns of RAMs (recently acceded members) and SVEs (small and vulnerable economies).

On Export Competition, said the G20, the end period agreed in Hong Kong for the elimination of all forms of export subsidies must be respected. The G20 recalled the need to reach effective disciplines that address developing countries' concerns on Food Aid, STEs (state trading enterprises) and Export Credits. The concerns of the NFIDCs (net food importing developing countries) must be fully addressed.

The G20 Ministers and Senior Officials also emphasized the importance of a strengthened and improved Monitoring & Surveillance mechanism to ensure compliance with new commitments and disciplines.

The G20 underscored the importance of making Special and Differential (S&D) treatment operative and integral to the negotiations in the three pillars. It also stressed the importance of overall proportionality in commitments, and emphasized the vital role of SPs (special products), in addressing the food security, rural development and livelihood concerns of developing countries, and of the SSM (special safeguard mechanism).

Transparency is an essential element to modalities. Required data in the three pillars must be provided by developed countries in advance, the G20 underlined.

The G20 said that it will approach and assess the negotiations this week by reference to these parameters. The G20 Ministers and Senior Officials emphasised the imperative of balance within and between different areas of the negotiations, in line with the principle of special and differential treatment.

They also emphasized that the number of flexibilities for developed countries in the current Draft Modalities, which are intended to preserve distortive policy space in domestic support and market access, must be significantly reduced.

The G20 said that it is ready to work constructively with all WTO Members to reach full modalities in Agriculture by the end of this week. The G20 will continue to work closely with other developing country groups to ensure an outcome that delivers on the development dimension of the Doha Round. +

 


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