by Cheryl Kaften

In what can only be described as a “Bizarro World” scenario, even as Canada continued to take the heat last week for the domestic content requirement in Ontario’s feed-in tariff (FIT.2) scheme, legislators in Washington, DC, considered imposing a similar regulation, in order to freeze China’s manufacturers out of the U.S. solar market.

The United States is a third-party complainant to the ongoing World Trade Organization (WTO) disputes - DS412 (Canada-Renewable Energy) and DS426 (Canada-Feed-in Tariffs) - lodged by Japan and the European Union in September 2010 and August 2011, respectively.

However, on May 15, while the parties to the case presented the first of two days of follow-up oral arguments to the WTO’s Dispute Settlement panel at a hearing in Geneva, U.S. Senators Charles E. Schumer (Democrat-New York) and Sherrod Brown (Democrat-Ohio) unveiled a “tough new proposal” to narrow the scope of solar panels eligible for America’s existing 30 percent tax credit by adding a domestic content requirement.

Specifically, the proposal would require that 70  percent of the parts of the qualifying solar panel must be U.S- made, or, if the final point of manufacture is in America, then 50 percent of the parts must be U.S.-made. Interestingly enough, their proposed 70 percent requirement would be higher than the 60 percent domestic content called for under Ontario FIT scheme.

In its August 2011 complaint to the WTO about Canada, the United States had expressed concern about the “trade-distorting” effects of Canada’s domestic content regulation and had announced its intention to protect its emerging renewable energy industry. “The United States is a major innovator of renewable energy and related technologies and is a primary source of Canadian imports of products used in the production of renewable energy, including solar and wind energy,” the document read.

This all adds another question to the key issues involved in the dispute, all of which are considered to have wide-ranging implications for the future:

• Is Canada liable to the world court for the independent actions of its province, Ontario and the Ontario Power Authority?
• Are the content requirements of the FIT program a barrier to fair trade?
• Did Ontario discriminate in favor of domestic goods with subsidies designed to promote production in the province, rather than designed to advance the renewable energy industry?
• And now: Can the renewable energy industry continue to expand and advance without direct support and intervention by government entities, such as Ontario already has provided and the United States is currently considering?

At the end of April, the parties to the dispute were required to submit written rebuttals to the arguments made at the opening hearing for consideration by the WTO panel, which then scheduled the second oral hearing.

According to hearing coverage in Bridges Weekly, the positions of the parties “have not deviated significantly” since the opening hearing took place, March 27 to 28. Last week, the panel members focused heavily on the substantial and legal facts that could inform their decision on whether the Ontario FIT measure is government procurement or subsidization.

The Geneva-based publication of the International Centre for Trade and Sustainable Development (ICTSD) reported that dispute panel member Alec Erwin (South Africa) “notably questioned the EU and Japan as to how their respective markets operate to determine benchmarks and pricing,” acknowledging that renewable energy sectors have not been flourishing in an unsupported marketplace. Both the EU and Japan were not immediately able to respond, but agreed to submit a response in writing.
An ecological imperative

The lead-up to the hearing actually made more of a splash than the event, as advocacy groups in favor of Canada tried to set the stage for a dismissal.

On March 14, Canadian NGOs and labor unions, including Blue Green Canada; Canadian Auto Workers; Canadian Federation of Students; Canadian Union of Public Employees; Communications, Energy and Paperworkers Union of Canada; Council of Canadians; and Ontario Public Service Employees Union, sent an amicus curiae submission to the World Trade Organization (WTO), “on the eve of a second … joint attack on the Ontario Green Energy Act.”

The groups addressed Canada’s failure to “properly defend” Ontario’s actions and called upon the WTO to respect the priority of Canada’s international climate change obligations. “These are the first international trade disputes which create the potential for conflict between a nation’s commitments under the WTO and its obligations under the Framework Convention on Climate Change and the Kyoto Protocol,” the submission said. “It raises fundamental questions about whether the goals of trade liberalization can be reconciled with ecological imperatives to reduce greenhouse gas emissions, and if not, which are to prevail.”

Although Canada repudiated its Kyoto commitments last year, the submission notes that “Ontario’s Green Energy Act was adopted while Canada’s climate obligations were outstanding, and they are mandated by the Framework Convention to which Canada is still a signatory … Article 3 of the Framework Convention requires that Canada, or in this case Ontario, is required to integrate environmental and economic policies and goals, which is exactly what it has done in the Green Energy Act and precisely the definition of ’sustainable development’.”

Further, “in simple terms, Ontario’s Feed-In Tariff program for renewable power is a perfect expression of the principles of sustainable development in which environmental and economic goals are married to address the imperatives of climate change,” said the submission to the WTO, which was prepared by Steven Shrybman,
international trade and public interest lawyer with Toronto-based Sack, Goldblatt Mitchell LLP.

Going forward

Although Japan and the EU protested the inclusion of the groups’ arguments so late in the process, the ITCSD said that Dispute Settlement panel Chair, Thomas Cottier (Switzerland), seemed inclined to enter the amicus curiae into consideration.

In related news, on May 15, the Council of Canadians, which describes itself as “Canada’s largest citizens organization,” appeared before a parliamentary international trade committee to recommend that Canada should not make any trade or economic partnership agreement with Japan unless that nation drops its World Trade Organization challenge.

A ruling on the case is not expected until October. Meanwhile, even before the verdict is in, renewable energy vendors worldwide have been hedging their bets by hurrying to confer with Ontario’s Local Content Assurance Bureau (LCAB) on the advisability of moving operations to Canada and on the guidelines for meeting domestic content requirements.

As for the Schumer-Sherrod proposed legislation, the Alliance for American Manufacturing, a non-profit, non-partisan partnership formed in 2007 by some of America’s leading manufacturers and the United Steelworkers, “commends [them] for their forward-thinking legislation to reward domestic content when U.S. consumers seek tax credits for their purchases of solar panels.”
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Officials from twenty-six developing countries were educated on different methods of handling legal disputes in trade during a week-long series of technical capacity-building events coordinated by the World Trade Organization (WTO) and two other Geneva-based organizations, in early May.

The events were aimed at improving developing nations’ dispute resolution capabilities, following research from the International Centre for Trade and Sustainable Development (ICTSD), which showed that 88% of developing countries feel they are disadvantaged in trade disputes because they have a more limited capacity to handle legal issues. Others blamed the design of the dispute settlement system.

An event coordinated by the ICTSD at the beginning of the week, brought together 50 experts and delegates from the developing countries to discuss their experiences, and explore real-life challenges in litigation.

Participants in the Dialogue included 25 delegates from WTO member governments who also took part in the earlier three-day WTO advanced training course on dispute settlement, which was held on April 30-May 2, 2012, coordinated by the WTO, and the Advisory Centre on WTO Law (ACWL).

A later event focused on coordination among different government agencies, the use of private lawyers to manage conflict before it becomes litigation, and on the different experiences of separate regions.

“The dispute settlement system has provided great benefits to the multilateral trading system and all WTO members,” said WTO Deputy Director-General Alejandro Jara, in opening the event. “But developing countries can only make use of these opportunities if they have the means to navigate this increasingly complex legal system. It is not only about knowing the rules - but more so about knowing how to manage litigation in practice.”

ACWL Executive Director Frieder Roessler echoed Jara’s sentiments, stating: “The handling of WTO dispute settlement procedures is becoming increasingly complex, and this increasing complexity poses a challenge in the training of government officials from developing countries and Least Developed Countries.”

“Nowadays training requires a combination of hands-on experience, and the ability to transmit and share that know-how. This is the underlying philosophy of this workshop, and the ACWL is firmly committed to this approach,” Roessler added.

Lauding the three institutions’ partnership, ICTSD’s Rodriguez Mendoza said: “The opportunity to partner with the WTO and ACWL and bring all these countries together is crucial for shifting our focus from information gathering to information dissemination and active trade litigation capacity-building.”

Jara added: “This is also a new way of capacity building in the WTO. Bringing together three institutions with shared interests towards developing countries, but with distinct knowledge, expertise and experience in dispute settlement, can only enrich our technical assistance beneficiaries. We are keen to take this partnership forward into other areas and other regions.”

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THREE ORGANIZATIONS COLLABORATE TO HELP DEVELOPING COUNTRIES HANDLE TRADE LITIGATION
Officials from 26 developing countries are exploring new ways of handling legal disputes in trade in a week-long event organized jointly by three Geneva organizations, starting on 30 April 2012.
> Press release:
http://www.wto.org/english/news_e/pres12_e/pr661_e.htm

—– VERSION FRANÇAISE —–

TROIS ORGANISATIONS COLLABORENT POUR AIDER LES PAYS EN DÉVELOPPEMENT À GÉRER LES DIFFÉRENDS COMMERCIAUX
Des fonctionnaires de 26 pays en développement étudient de nouvelles manières de gérer les différends commerciaux au cours d’une manifestation, organisée conjointement par trois organisations basées à Genève, qui a débuté le 30 avril 2012 et durera une semaine.
> Communiqué de presse:
http://www.wto.org/french/news_f/pres12_f/pr661_f.htm

—– VERSIÓN ESPAÑOLA —–

TRES ORGANIZACIONES COLABORAN PARA AYUDAR A LOS PAÍSES EN DESARROLLO A RESOLVER SUS LITIGIOS COMERCIALES
Funcionarios de 26 países en desarrollo están analizando nuevas formas de resolver las diferencias jurídicas en la esfera del comercio en un evento de una semana de duración, patrocinado conjuntamente por tres organizaciones basadas en Ginebra, que comenzó el 30 de abril de 2012.
> Comunicado de prensa:
http://www.wto.org/spanish/news_s/pres12_s/pr661_s.htm

Contact: Jonathan Hepburn, Agriculture Programme Manager
Tel. 0041 22 917 87 56; jhepburn@ictsd.ch

(Geneva, 30 April 2012). Developing country farm exports are set to grow substantially in months ahead as Russia joins the World Trade Organization, a new study finds – with increased consumer demand and lower import duties driving the trend.

Expanded access to Russia’s beef, pork and sugar markets could boost exports from Brazil, Paraguay and Uruguay, say Sergey Kiselev and Roman Romashkin in a research paper for the International Centre for Trade and Sustainable Development (ICTSD).

Major importers of Russia’s wheat exports such as Egypt and Turkey could also gain as Russia agrees to control export restrictions and prohibitions, the study finds – along with barley importers such as Iran, Libya and Saudi Arabia.

“Russia’s growing agricultural and food markets are attractive both for domestic producers and to suppliers from abroad”, Kiselev said. “For several commodity groups, Russia’s market openings will substantially improve trade”.

Argentina, Chile and South Africa could benefit from substantially lower import duties on their wine exports, say the authors, and Turkey and Chile could gain as Russia halves its import tariffs on grapes.

Although developing countries are the main suppliers of bananas, citrus fruit, coffee and tea, Russia’s current low tariffs mean that exporters of these products will not see major gains.

However, Colombia and Kenya could gain as Russia slashes import duties on cut flowers from 15 to 5 percent, and countries such as China and South Africa could gain as Russia’s maximum permitted tariffs on apples, pears and other fresh fruit drop to half, or even less, of their current levels.

Russia’s WTO commitments will still allow the government to help domestic industry to adapt, by providing farm subsidies and tax concessions or investing in infrastructure, the study finds. Production-linked support could be redistributed to producers in sensitive sectors, such as pork, poultry or sugar, while farm subsidies that are not deemed to distort trade could also be increased – such as those for the environment or particular regions.

Russia’s customs union partners, Belarus and Kazakhstan, are also likely to lower tariffs on developing country exports once Russia has joined the global trade body, argue Kiselev and Romashkin. Exporters could also gain further access to markets in the three customs union countries as Belarus and Kazakhstan negotiate to join the WTO.

“Russia’s membership in the WTO will provide significant trade benefits for developing countries”, said Kiselev.

“In case of a breach of Russia’s obligations, the WTO dispute settlement system can be used to seek redress – an avenue that was not open before Russia acceded to the WTO”, added Kiselev.

The study is online here.

Notes to editors:

1. The International Centre for Trade and Sustainable Development (ICTSD) is a nonpartisan think tank, based in Geneva, which - by empowering stakeholders in trade policy through information, networking, dialogue, well targeted research, and capacity building - seeks to influence the international trade system such that it advances the goal of sustainable development. www.ictsd.org

2. The World Trade Organization (WTO) is an organisation based in Geneva, Switzerland, which is responsible for liberalising and regulating international trade in goods, services and other areas. It has 153 Members.

3. The Eighth Ministerial Conference of the WTO formally approved the Accession Package of the Russian Federation on 16 December 2011. The country now has to complete its domestic ratification of the accession protocol within 220 days of this decision, i.e. by 23 July 2012. The Russian Federation will become a Member of the WTO thirty days after notifying the Secretariat of the domestic ratification of its Accession Package.

Por Assis Moreira | De Genebra

O vice-presidente do Banco Mundial (Bird), Otaviano Canuto, alertou ontem que a pressão pela valorização do real continuará forte e duradoura, devido à mudança de padrão da demanda mundial por recursos naturais, e sugeriu que o país acelere reformas para ajudar a competitividade da industria brasileira.

A valorização excessiva do real ocupou parte do debate sobre comércio internacional, ontem, na Agência das Nações Unidas para o Comércio e Desenvolvimento (Unctad), e continuará sob o foco dos países, durante seminário sem precedentes que será realizado hoje e amanhã na Organização Mundial do Comércio (OMC).

Para Canuto, os problemas da indústria brasileira vão além das dificuldades com a taxa de câmbio e não vão desaparecer tão cedo. “A pressão é muito forte sobre a taxa real de câmbio e não dá para abstrair que o país tem um manancial grande de recursos naturais, que estão valorizados no mundo, e que essa valorização vai permanecer por muito tempo. Isso acaba afetando fortemente os custos sobre os setores que não se beneficiam da valorização dos recursos naturais, que é justamente a indústria manufatureira”, afirmou.

O economista Christophe Bellmann, do Instituto de Comércio e Desenvolvimento Sustentável (ICTSD), ilustrou o cenário com pesquisa que prevê que a classe média mundial pulará de 1,5 bilhão atualmente para 4,9 bilhões de pessoas até 2030. Com isso, a demanda por aço aumentará 80% no período, por cereais, 27%, por água, 41%, e por energia, 33%.

Só que do lado da oferta, a tensão aumentará com escassez sobretudo de recursos minerais. A necessidade de ampliação da produtividade e eficiência será enorme. Os investimentos em economia verde também deverão ser gigantescos. Conflitos sobre subsídios, que hoje alcançam US$ 1,1 trilhão para agricultura, energia e setor pesqueiro, vão causar mais contenciosos.

Para Canuto, a indústria manufatureira brasileira se defronta com custos no lado de serviços que estão subindo e são reflexos da alta dos recursos naturais. “Não dá para imaginar que isso vai se resolver só com câmbio”, observou. Segundo ele, o Brasil precisa apressar a reforma fiscal, que permita a queda maior e mais rápida do juro, porque o diferencial de juros torna ainda mais acelerado o processo de valorização do real. “O país precisa reduzir a carga tributária sobre a indústria e para isso é preciso maior eficiência do gasto público. Tanto o setor público como o privado necessitam mais eficiência no gasto de investimento em infraestrutura”, disse Canuto.

A articulação do Brasil para pavimentar o terreno em direção de um mecanismo na OMC que dê alívio a problemas de câmbio no curto prazo, a fim de impor sobretaxa nas importações e proteger a indústria, continua a causar ampla discussão e mostra a que ponto o câmbio concentra atenção nos círculos comerciais.

Representando o Banco Mundial nos debates da Unctad e da OMC, Canuto é cauteloso. Considera a iniciativa brasileira importante, mas acha que a evidência sobre o impacto do câmbio no comércio é muito complexa. Diz que o banco observou que o impacto existe e é durável no caso de países em transição de níveis baixos para renda média, “mas a partir daí os efeitos são muito dúbios”.

Canuto aponta a dificuldade de mensurar e dizer quão alinhada ou desalinhada está uma taxa de câmbio. Argumenta que a taxa de câmbio depende também de outras características de funcionamento das economias. “Às vezes é difícil enxergar se a taxa de câmbio está por conta de políticas ou de outros fatores”, diz.

A professora Vera Thorstensen, diretora do Centro de Comércio Global, da FGV-SP, foi incisiva ao apresentar diferentes tabelas mostrando excessiva valorização do real. A conclusão é que o Brasil tem hoje tarifa de importação bastante negativa e estimula a entrada de produto estrangeiro. Para a professora, é preciso que a OMC tenha mecanismo eficaz para neutralizar o impacto do câmbio, que estima estar minando todos os instrumentos de defesa comercial atualmente existentes.

O tom entre alguns representantes de países em desenvolvimento, porém, foi de certa preocupação sobre as propostas para o câmbio que o Brasil quer avançar na OMC. Para uma diplomata do México, o Brasil quer “fechar fronteiras” para os parceiros. Um embaixador da Colômbia argumentou que o aumento de fluxos de capitais, que valorizam as moedas, tem mais a ver com investimento direto externo. O embaixador da Costa Rica também mostrou-se cético e questionou por que o Brasil não usa os instrumentos já existentes na OMC, se o país acha que eles existem também para câmbio.

More ICTSD in the news

by Colin Sullivan, E&E reporter

UNITED NATIONS — This summer’s sustainable development conference in Brazil, known as Rio+20, is emerging as an overt attempt by U.N. officials to shift away from the divisive politics of climate change to a broader debate on the green economy and how to bring it to developing nations.

On the heels of arguably little movement on an international climate pact during U.N.-sponsored talks in South Africa, Mexico and Denmark, officials here now say they view Rio+20 as a way to get past intractable policy fights between developed and developing nations over greenhouse gas emissions cuts, to focus on core issues like trade and technology.

The head of Brazil’s delegation during the most recent talks, in Durban, South Africa, last week made it clear that his role in the Rio de Janeiro conference will be to press the conversation elsewhere. Sustainable development as part of an emerging new economy, not climate change, will be the featured attraction this summer, in what appears to be a directed strategy to enter new territory during U.N. negotiations.

“Climate change … has very strong resistance from sectors that are going to be substantially altered, like the oil industry,” Ambassador Andre Correa do Lago said. “Sustainable development is something that is as simple as looking at how we would like to be in 10 or 20 years.”

The diplomat went on to admit that the political situation in the United States is a key concern, as contenders for the Republican nomination to the White House have vied with each other over the past year to distance themselves from policies to trim greenhouse gases. Add to that Capitol Hill’s failure to deal with warming, as well as discord with more advanced developing nations like China and India, and what seems to be emerging here is a strong desire for a new approach.

Enter what they hope will be the new angle: Rio+20. The new tack in strategy was evident last week during a U.N. workshop on Rio, where senior U.N. trade officials met to start hashing through their “zero draft” document for trade proposals that could be on the table this summer.

Lucas Assuncao, a Brazilian at the U.N. Conference on Trade and Development and a key figure in pre-Rio talks, said U.N. officials are working fast to put together a “bold” trade proposal for Rio. Ideally, he said the zero draft would address “green protectionism” as well as trade opportunities, subsidies and finance for developing countries looking to expand renewables and other technologies.

“We do not yet have an international consensus on how to pursue a green economy,” he said during the trade workshop, adding that he would like to bring to Rio a “stronger” proposal on the subject that would help spur the green industrial economy.

‘Shift on par with the Industrial Revolution’

“We are talking about a shift on par with the Industrial Revolution,” he said. “We need to help the losers cushion losses and adjust, and to ensure that the poor and marginalized do not become more so.”

Assuncao says current language in the draft — a one-liner that says “create no trade barriers” — will do little to give countries guidance on how to become players in the green economy. “Many countries are pursuing sustainable development (in their eyes) by using trade barriers,” he said. “A one-line declaration won’t work.”

What the draft would address beyond that one-liner remains to be seen, with ideas from A to Z still on the table. Among the topics that could make the final cut for negotiations are proposals that would: prod nations to phase out fossil fuel subsidies, reduce trade barriers against energy-efficient technologies, end marine capture fishery subsidies and limit agricultural subsidies.

Most ambitiously, some say a sustainable energy trade agreement could emerge from Rio to address all these matters, in addition to governance, with one proposal suggesting the U.N. Environment Programme be given World Trade Organization-style authority to settle trade disputes.

Also possible is a clause on intellectual property rights, to address how countries might collaborate on patents to speed up deployment of green technologies. This area seems ripe, given recent news that economic espionage may be afoot between China and the United States related to wind turbine components (ClimateWire, Jan. 26).

Marianne Schaper, of the U.N. Department of Economic and Social Affairs, said how green trade commitments might be meshed with WTO rules, which are empowered by a range of regional and bilateral trade pacts, will be a key concern. She asked the following question during a presentation here, without supplying an answer: “Is the WTO rulebook sufficiently equipped to deal with [the green economy]?”

According to the International Centre for Trade and Sustainable Development (ICTSD), a group that tries to shape international trade to advance sustainable development, what should emerge from Rio to address these questions is a stand-alone sustainable free trade pact that could create authority aside from the WTO. ICTSD would like to see Rio produce “a plurilateral agreement either within or outside the WTO, including a critical mass of major economies and emitters,” Schaper said.

Also up for debate is an idea from Pakistan on a pact that would promote green industries in the developing countries by, in part, “reorienting [the] intellectual property regime towards diffusion of technology,” she said. And Switzerland wants the conference to look at value chains stretched across different countries, to create a framework for easing dissemination of environmental products.

An international ‘green’ trade agreement?

Among the ideas Schaper offered as “food for thought” is creation of a green trade forum at the United Nations to spark ideas about potential trade disputes related to green technology. She said the forum could look at restoring non-actionable subsidies in the WTO, taxation for “environmentally harmful activities,” how to enable transfer of technology and bilateral investment agreements.

“We have a lot of submissions,” she said of the zero draft document. “But nothing is concrete.”

To Assuncao, the current language in the zero draft is “too modest.” So he is taking feedback from diplomats at this point and hopes to go public in the months ahead with a more aggressive alternate.

The initial response from some of these far-reaching proposals seemed to be wariness. Laura Anderson, an international relations adviser at the U.S. Department of Agriculture, told Assuncao in an exchange that the WTO and the treaty that created it, the 1947 General Agreement on Tariffs and Trade (GATT), already have a system for resolving trade disputes, to include environmental matters.

“WTO has created rules and a committee to evaluate environmental aspects of trade” under GATT, she said. “They have been successful.”

Assuncao responded by saying U.N. officials “are trying to offer a bridge” between Rio and WTO. But he also admitted the Rio conference runs the risk of “having a big splash with conflict” if whatever emerges fails to get the two sides communicating.

Still, if there was a clear theme from Assuncao, it was the notion that WTO law “only gets us so far” on issues like subsidies, domestic content, green standards, investment agreements, intellectual property and border measures.

“The WTO does not solve everything,” he said, arguing that the WTO has no system for countries looking at “environmental externalities” beyond standard trade disputes. “There is too much uncertainty.”

He added: “They go there [to the WTO] not to think about the green economy. It’s just not created for that.”

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JOHANNESBURG, 23 December 2011 (IRIN) - An exchange between two leading world officials on how trade affects food insecurity in countries has helped focus attention on the stalled Doha trade talks.

Olivier de Schutter, UN Human Rights Council’s Special Rapporteur on the Right to Food, says: “Food security is the elephant in the room, which WTO [the World Trade Organization] must address”, pointing out that food import bills had soared by a third for poor countries this year.

Schutter said developing countries should limit their reliance on international trade to ensure they had enough food and be able to put in place measures to beef up their own production and insulate themselves from global price shocks.

Pascal Lamy, director-general of the WTO, on the other hand, believes food security is central to the WTO’s Agreement on Agriculture (AoA),the world’s first treaty aimed at improving market access and reducing trade-distorting subsidies in agriculture and the Doha Round.

Measures such as temporary import restrictions, state purchases from small-scale farmers, allowing state-held food reserves, safety net insurance schemes and targeted farm subsidies could help, said Schutter, but WTO rules left little space for developing countries to implement them.

He said WTO members should convene a panel of experts to analyse whether existing WTO rules, and those being negotiated under the Doha Round were compatible with national and international food policies; assess the impact of trade liberalization on world food prices; and initiate talks at the WTO to take into account the long-term impacts of the 2007 global food price crisis for the international trade regime. (More details in his briefing note, The World Trade Organization and the Post-Global Food Crisis Agenda: Putting Food Security First in the International Food System )

Lamy points out that most experts, including those in the UN, agree that international trade is part of the solution.

Allowing developing countries to implement trade restrictive measures could hurt them the most, as, he said, “about 60 percent of developing countries’ agriculture exports go to other developing countries.”

Lamy agreed with Schutter on the need to ensure safety nets are in place to help the urban and rural poor, but he said the AoA provides developing countries with the room to implement policies in line with their national objectives through the use of certain subsidies.

Developing countries do not have to cut their subsidies or lower their tariffs as much as developed countries, and they are given extra time to complete their obligations under AoA. Poor countries don’t have to do this at all, he added.

The Doha Round could help to give developing countries more space by making it easier to maintain food reserves for food security purposes for instance, said Lamy. (More details on Lamy’s response )

Other views

Almost all economists, and even those within the UN, agree that trade is part of the solution and insulating domestic economies with trade restrictions might work in the short-term for a particular country but can have far-reaching repercussions for others in the region.

Economist Dirk Willem te Velde at the UK’s Overseas Development Institute (ODI) cited Tanzania’s export ban on maize in July as an example. “At that moment, Kenya would have wanted more trade rather than less in order to become more food secure.”

The Doha Round

The Schutter-Lamy debate has reopened issues around the Doha talks which have been going on, in stop-start mode, for the last 10 years.

“Two schools of thought are emerging”, said Jonathan Hepburn, the agriculture programme manager at the Geneva-based think-tank, International Centre for Trade and Sustainable Development: One says that “with Doha in limbo, high and volatile food prices, a changing climate, and growing world population, it made sense to begin discussing how trade relates to food security and other issues.

“The other - of concluding Doha first - is favoured by many developing countries who have invested scarce resources in maintaining missions and negotiators at the talks for 10 years.”

Economist Edward Clay of the ODI says: “Perhaps no one is actually able to admit that the Doha Development Round [DDR] is dead and so begin the discussion again with that openly conceded. That leads to the question what should be taken over from the DDR.”

He digs deeper: “Trade and food security is in effect a WTO issue, and so there is great frustration within the UN that this enormously restricts the role of, for example, the Food and Agriculture Organization-based Committee on Food Security: the key issues are not just discussed but actually negotiated elsewhere.

“Second, primarily allowing trade to address food security is somewhat in greater doubt in our current era of extreme food commodity market volatility.”

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Von Alan Matthews

Der jüngste Gesetzesentwurf der EU-Kommission zur Reform der europäischen Agrarpolitik versucht erhebliche Subventionen für Europas Landwirte zu legitimieren, indem sie künftig an umweltfreundliche Anbaumethoden geknüpft werden. Allerdings sind die Vorschläge teurer als nötig und beseitigen nicht jene Praktiken, die Bauern in Entwicklungsländern schaden.

Laut den Plänen der EU-Kommission sollen Agrarsubventionen ab 2014 stärker an Umweltziele geknüpft werden, auf die EU-Bürger Wert legen. Dazu gehören Klimaschutz, ein besserer Umgang mit Agrarland und der Erhalt der Artenvielfalt.
Eine stärkere Förderung ökologisch nachhaltiger Agrarwirtschaft geht aber auf Kosten landwirtschaftlicher Erträge - zumindest in unmittelbarer Zukunft. Vorschläge zur Erhaltung von Dauergrünland, Diversifizierung von Anbaukulturen und Einrichtung ökologischer Schutzzonen werden die Produktion von Ackerkulturen, Schweinefleisch und Geflügel reduzieren.
Der Versuch der EU-Kommission, die ökologische Nachhaltigkeit der Landwirtschaft zu verbessern, ist ein willkommener Schritt. Doch der ökologische Nutzen dürfte gering sein - zu höheren Kosten als nötig. Die Forderung, dass alle Landwirte in der EU den gleichen Standards folgen sollen, ignoriert die Tatsache, dass Umweltbelastungen ungleichmäßig verteilt sind und einen zielgerechteren Ansatz erfordern.

In einer neuen Studie für das International Centre for Trade and Sustainable Development finde ich, dass unter den derzeitigen Plänen viele Direktzahlungen weiterhin nur schwach an ökologische Ziele gekoppelt wären - und wegen der Verknüpfung einiger Subventionen mit landwirtschaftlichen Erträgen wären Direktbeihilfen weiterhin weniger wirksam bei der Unterstützung landwirtschaftlicher Einkommen und brächten gleichzeitig unfairen Wettbewerb für Landwirte in anderen Ländern, einschließlich Entwicklungsländern.

Geplante Subventionskürzungen für Baumwollproduzenten in Griechenland und Spanien könnten die EU-Produktion leicht senken. Nichtsdestotrotz werden diese handelsverzerrenden Zuschüsse Bauern in Entwicklungsländern weiterhin benachteiligen. Eine Beseitigung der Zuckerquoten ließe trotz niedrigerer Preise die EU-Produktion steigen, wovon Länder, die von Zuckerimporten abhängen, profitieren würden. Sie könnte aber die Importe aus den afrikanischen, karibischen und pazifischen Ländern reduzieren, die derzeit von Präferenzabkommen zum EU-Markt profitieren.

Der mangelnde Ehrgeiz der Gesetzesvorlage der EU-Kommission ist enttäuschend. Mit den jüngsten Vorschlägen wird die Chance verpasst, verbleibende Handelsverzerrungen zu beseitigen, indem man Subventionen stärker an ökologische Ziele koppelt und produktionsabhängige Zahlungen beseitigt. Mitgliedstaaten und EU-Parlament haben nun, während sie über den Gesetzesentwurf beraten, die Gelegenheit, eine grünere und gerechtere Agrarpolitik zu gestalten - eine Agrarpolitik, die den EU-Bürgern Ergebnisse liefert, ohne Landwirte in Drittländern zu benachteiligen. Die Gelegenheit darf nicht verpasst werden.

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By Agri-Pulse Staff

DURBAN, South Africa, Dec. 11 - Negotiators at the United Nations Framework Convention on Climate Change (UNFCCC) 17th Conference of the Parties found enough common ground to strike a deal on climate change, albeit one with plenty of details yet to be negotiated.

The decision puts the world on a path to negotiating a legal climate agreement - one that involves all major emitters including the US, India and China - that would enter into force in 2015, according to the International Centre for Trade and Sustainable Development (ICTSD). Participants agreed to replace the 20-year old system that required only industrialized nations to cut emissions.

The “Durban Platform for Enhanced Action” also commits parties to a second commitment for the Kyoto Protocol and provides a plan to advance implementation of the Cancun Agreement on financing, through the Global Climate Fund (GCF); technology; response measures; and reduced emissions from avoided deforestation, noted ICTSD.  However, the group says the package “falls short of expectations on the inclusion of agriculture in any long-range action.”

“Importantly, the agreement reaffirms the goal of capping global warming at a maximum of 2°C. However, it also notes with “grave concern” that current commitments will not meet that goal and launches a work plan that will help improve ambition on the issue,” ICTSD noted.

Negotiators did not agree on sources for the Green Climate Fund, which would include a promised $100 billion a year in public and private funds by 2020 to assist developing nations in adapting to climate change and the conversion to clean energy sources. The Fund would be managed by a 24 member board, composed of an equal number of developed and developing country members.

However, they did agree that the World Bank will serve as the interim trustee of the Fund for the first three years after its operationalisation. Washington had been pushing for the Bank to be designated as the trustee, insisting that the Fund must be managed by an international organisation with experience in managing funds globally, according to ICTSD.

In a statement released Sunday, Democratic Leader Nancy Pelosi said that the Durban climate talks “have brought us to an important moment where all nations will be covered in the same roadmap toward a long-term solution for the climate crisis—the greatest challenge facing our planet.

“America must not wait to begin the hard work of achieving real reductions in carbon emissions, even as the negotiations to implement the Durban accord continue.  If we don’t delay, the United States will develop the technologies the world will use to address the crisis, and we will create jobs and strengthen our economy as a result.

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By Kiranne Guddoy
In 2008, the EU concluded its first Economic Partnership Agreement with a group of member states’ former colonies. So far, this agreement has not made much progress.

The Caribbean Forum (Cariforum) is made up of the 15 members of the Caribbean Community and the Dominican Republic. Cariforum, so far, is the only regional organisation to have signed an Economic Partnership Agreement (EPA) with the European Union (EU). The EPA will come into force once all member countries have ratified it. Until then, Cariforum and the EU have pledged to provisionally apply the EPA. It was agreed in October 2008.

So far, this EPA is the only comprehensive agreement of its kind the EU has managed to conclude with the beneficiaries of the previous Lomé and Cotonou Conventions. These Conventions served to define the relations of the EU with some of its members’ former colonies in Africa, the Caribbean and Pacific (ACP countries) in the last decades of the 20th century. They were basically about the EU granting unilateral preferential status to ACP countries and incompatible with WTO rules, which is why new agreements are necessary.

The EPA between the EU and Cariforum was controversial when it was signed in 2008. It was the result of four years of intense negotiations. Some critics considered the EPA imperfect. On the other hand, many people recognised that it was necessary, hoping it would stimulate and enhance economic competitiveness in the Caribbean region.

Civil society groups as well as some academics in the region opposed the EPA. Their argument was that the rights and obligations the treaty defines are asymmetrical to the detriment of Cariforum members. It is true that Cariforum members mainly export primary commodities to the EU, including fuel, chemicals and agricultural products (mangoes, bananas, rice, rum, sugar), whereas the EU mostly exports machinery and other finished products to the Caribbean.

Cariforum member governments are responsible for drafting strategies to implement the agreement. The EU, in turn, is supposed to provide support for regional integration in the region, including for implementing the EPA and boosting private sector competitiveness. An Aid for Trade programme was designed to boost trade-related development assistance to over € 2 billion a year by 2010. That schedule has not been met.

Indeed, The EPA has hardly made progress so far. There are several reasons, including diverging opinions and even clashes among Cariforum members on the one hand and lack of action on behalf of the EU on the other. According to Junior Lodge, the technical coordinator for the CARICOM Office of Trade Negotiations, there are several major implementation bottlenecks, including
– the lack of human resources, funding and political will,
– the lack of coherence between EPA implementation and other economic policymaking in general (including multilateral trade negotiations) and
– the lack of dynamism in the regional integration process.
Cariforum is challenged by deep and unresolved differences between Caricom and the Dominican Republic. The process of EPA implementation, moreover, has proven to be inefficient and fastidious, requiring regular meetings of the Joint Council of EU and Cariforum. To attend these meetings at government level, Cariforum countries depend on support from the European Development Fund (EDF).
To date, only five Cariforum countries – Barbados, Belize, Grenada, Guyana and St. Kitts and Nevis – have started reducing their tariffs. The others are still preparing for such steps. Only Barbados, the Dominican Republic and Jamaica have set up EPA implementation units.

Ongoing discussions

No doubt, the global downturn after 2008 has contributed to stalling the EPA process. It is extremely difficult for the EU to mobilise the promised funds. While German and British agencies, for instance, are actively involved, more needs to be done. The 2008-13 EDF has earmarked € 143 million to further regional integration, support EPA implementation in the Caribbean and boost private sector competitiveness. However, the mode of delivery is still being discussed. Core issues include how to ensure aid effectiveness and timely delivery. Due to the lack of money, relevant agencies of the Caribbean nations remain understaffed and cannot work effectively.

In view of the global financial crisis and serious implementation challenges, it is unrealistic to expect the EPA to deliver structural change or a massive increase of foreign direct investment in a short period of time. Today, some of those who were in favour of the EPA argue that the most important aspect was to promote policy changes in the Caribbean. However, there has not been much change. Cariforum members, for instance, have hardly tackled the challenge of finding new forms of government revenue to replace the trade-related revenue they traditionally rely on.

Investment patterns have not changed much either. Only the Dominican Republic, Barbados and Trinidad and Tobago have managed to expand their service sectors and gain a foothold in new, high-value manufacturing. The other Cariforum countries have been unable to attract more foreign investment and trigger growth beyond tourism. Apart from the three countries just mentioned, only Jamaica, as a commodity exporter, has substantially benefited from the EPA. The agreement did not do much to help small countries diversify their economies and become more competitive at the global level.

The service sector is of particular relevance. It contributes over 50 % to GDP in most Caribbean countries, mainly due to the importance of tourism. Most Cariforum states have liberalised business services, tourism, entertainment, transport and telecommunication in line with the EPA rules. However, these steps so far have neither led to more staff of service companies from the Caribbean working in the EU nor to more foreign direct investment flowing into the Caribbean region. Officials at the Caricom Office for Trade Negotiations, however, say that market access to the EU is relevant to people from the Caribbean entertainment business, which is considered quite competitive.

Perhaps one should consider EPA implantation a long term exercise that will yet trigger a series of policy reforms. While many hopes have not come true yet, Cariforum countries certainly benefit from predictable and reliable market access to the EU. Duty-free-quota-free (DFQF) market access is a key feature of the EPA. Nonetheless, the EPA is overshadowed by various issues linked to poor institutional capacity and imperfect implement. Should these issues be overcome, the EPA could become a tool to expand business by exploring new market opportunities and deepen regional integration.
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