TWN Info Service on WTO and Trade Issues (Dec08/04)
5 December 2008
Third World Network

Trade: No progress cited on sensitive products in Green Room
Published in SUNS #6599 Thursday 27 November 2008

Geneva, 26 Nov (Kanaga Raja) -- A Green Room meeting at the WTO of trade negotiators from some dozen countries discussed on Tuesday the issue of sensitive products in agriculture. While the discussions were described as being "good", no progress appears to have been made.

The Tuesday Green Room meeting is the second in a series of meetings scheduled for this week, each one dealing with a different issue.

On Monday, a Green Room meeting discussed the issue of sectorals in non-agricultural market assess (NAMA). According to media reports, Canada pushed firmly the issue of sectorals, but this was resisted by several developing countries including China.

Another Green Room meeting is to take place on Wednesday on preference erosion in NAMA, while the issue of Special Safeguard Mechanism, a sticking point in the July Ministerial, is to be taken up in a Green Room meeting on Thursday, as is also the issue of cotton.

Sensitive products are products that would take smaller cuts than under the formula.

According to the 10 July draft text by the Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, each developed country member shall have the right to designate up to [(4) (6)] percent of tariff lines as sensitive products. Where such members have more than 30% of their tariff lines in the top band, they may increase the number of sensitive products by 2%.

Developing country members shall have the right to designate up to one-third more of tariff lines as sensitive products.

According to the 10 July text, members may deviate from the otherwise applicable tiered reduction formula in final bound tariffs on products designated as sensitive. This deviation may be one-third, one-half or two-thirds of the reduction that would otherwise have been required by the tiered reduction formula.

The payment for being allowed to undertake a smaller tariff cut is through more market access, by means of a tariff quota.

According to the 10 July text, for developed country members, this shall result in new access opportunities equivalent to no less than [(4) (6)] percent of domestic consumption expressed in terms of physical units where the two-thirds deviation is used. Where the one-third deviation is used, the new market access opportunities shall be no less than one percent less than that percentage of domestic consumption. Where the one-half deviation is used, the new access opportunities shall be no less than 0.5% less than that percentage of domestic consumption.

For the additional 2 percent available to those members who have more than 30% of their tariff lines in the top band, the member concerned shall have an obligation to ensure that, whichever deviation is selected, an additional 0.5% of domestic consumption beyond what is generally provided for is achieved for these products.

Following the failure of the July Ministerial, Falconer issued a report in August to the Trade Negotiations Committee assessing the outcome of the negotiations on agriculture in July.

On the issue of sensitive products, Falconer's report noted that for developed country members, the output from the G7 and the Green Room discussion based on the concept of "4 + 2" has been well reported. ("4 + 2" means 4% of products deemed sensitive, with some countries allowed another 2% of products with additional TRQ expansion.)

According to a trade diplomat, the issues discussed in the Green Room meeting on Tuesday included the number of sensitive products (and related to this, the Tariff Rate Quota expansion and creation), the issue of transparency (with regards to members providing a list of products that are going to be sensitive and which could also include products where new quotas are created) and tariff lines in excess of 100% ad valorem.

The trade diplomat said that there were good discussions but no conclusions.

On the issue of transparency, the EU said that it was politically impossible for it to provide a list of products before the scheduling exercise, according to the trade diplomat.

According to other trade diplomats, with respect to the number of sensitive products, Japan asked in principle for 4%, and 2% plus 2% with additional TRQ expansion. But it was prepared to make only the same payment as stipulated in the July text. Exporters complained that this gave too much.

Asked after the Green Room meeting if there was any progress, Ambassador Roberto Azevedo of Brazil said "no, not really."

"We need to see the big importers showing some flexibilities, and not wanting for flexibilities," he said.

Referring to mostly the G-10 countries, he said that "they want more and more exceptions, more and more flexibilities [and] avoiding cuts, avoiding contribution."

"The rationale is if I give you a quota, I have done my job," he said. But that is not the point, he added.

"We don't want quotas," the Brazilian envoy said, adding: "What we want is the cut."

Asked if there had been any movement, he said that whatever movement there was, it was only marginal. "I don't think it's anything that would change the picture dramatically."

On the issue of tariff capping, the positions did not change whatsoever, he said.

On the issue of Tariff Rate Quota (TRQ) creation, the Brazilian envoy said that as far as the G20 is concerned, there should be no new TRQs. To even consider that, "the first thing that we need is transparency".

"Let people say what and how they are going to do with the new TRQs... That transparency has not been forthcoming up to today."

(Falconer had proposed in an earlier November "walks in the woods" consultation to tackle TRQ creation as country-specific and product-specific.)

"They want a blank cheque, and a blank cheque they won't get," the Brazilian envoy said.

Asked as to what progress he could note, Ambassador Alberto Dumont of Argentina said "None".

As an exporting country, he said that he did not hear anything new. "I haven't heard anything new," he said, adding that it was all the same things that he heard in the "walks in the woods" private consultations held by Chairman Falconer.

A senior Japanese official said that Japan was seeking 8% (of tariff lines to be deemed sensitive).

As to the discussions, he said that "we had a nice discussion on the number of SP (sensitive products) and the payment, and also TRQ creation."

He also indicated that tariff capping was unacceptable.