Bridges Trade BioRes • Volume 3 • Number 5 • 21st March 2003
WTO AGRICULTURE DEADLINE INCREASINGLY OUT OF REACH
WTO AGRICULTURE DEADLINE INCREASINGLY OUT OF REACH
The 31 March deadline for finalising the modalities for the current round of agriculture negotiations at the WTO is threatening to slip away as Members continue to remain miles apart in their willingness to liberalise agricultural trade. The first modalities draft presented by Stuart Harbinson, Chair of the special (negotiating) session of the WTO Committee on Agriculture, was met with widespread criticism from all sides. The failure would not bode well for the current round of trade negotiations as agriculture is widely conceived as the make-or-break issue of the talks.
The modalities will set out the scope of the negotiations, the methodology to be followed during the actual process, and the end-results expected in the agriculture negotiations. In practise, negotiators will have to decide which agriculture-related aspect will be addressed in the negotiations, the formulas for tariff and subsidy reductions, as well as timelines and implementation plans.
Following the circulation of the first draft on 12 February, Harbinson issued a revised first draft on 18 March with some pro-developing country modifications, e.g. with respect to tariffs, trade preferences and a special safeguard mechanism for developing countries. The main features of the original draft remained largely unchanged. The US and the Cairns Group of agricultural exporting countries rejected the draft as lacking ambition regarding the proposed cuts in tariffs and trade-distorting support. As Cairns Group member Australia noted that the draft fell far short of substantially cutting "the outrageous levels of domestic support" provided by the EU, the US, Japan and others.
For its part, the EU regarded the draft as "unbalanced, spreading the burden very unevenly amongst developed countries". EU Agriculture Commissioner Franz Fischler expressed disappointment that the pursuit of non-trade concerns (NTC) was not adequately addressed. "Those concerned about enhancing the provision of public goods, from environment to food safety, see their non-trade concerns ignored and their concerns about the potentially negative impact of trade enhanced," he stated. This view was echoed by other ‘Friends of Multifunctionality’ such as Japan and Switzerland. Harbinson’s draft leaves open the question of how NTCs related to food safety and consumer protection, as demanded by the EC, could be addressed. However, Harbinson noted that some NTCs had already "been taken into account in various parts of the present text". For example, the revised draft provides that provisions on environmental programmes under the Green Box would be extended to government payments under animal welfare programmes. Nevertheless, Harbinson recognised that further consideration would need to be given to those issues.
In contrast, several of the major developing countries expressed satisfaction with the draft. The Like-minded Group of countries, which includes India, Kenya and Nigeria, regarded the text as a small victory for the coalition of developing countries that had fought hard in recent years to only open up their markets if their developmental and food security needs were adequately addressed. According to the draft, developing countries would be allowed to denominate a number of "special products with respect to food security, rural development and/or livelihood security concerns," which would be subject to significantly reduced tariff reduction commitments. Least-developed countries would not be required to undertake reduction commitments, although they could be "encouraged to consider making commitments commensurate with their development needs on a voluntary basis".
Due to domestic pressure, both the US and EU will find it difficult to move from their entrenched positions. The European Commission is facing the challenging task of obtaining a broadened negotiating mandate from the 15 EU member states by the next WTO Ministerial meeting in September while at the same battling over the reform of the EU’s Common Agriculture Policy (see BRIDGES Trade BioRes, 7 February 2003). The US, in turn, is facing pressure from Congress and farmers’ groups that are expecting USTR Robert Zoellick to negotiate an accord which would "result in a good deal for America’s farmers, ranchers and agricultural producers," as expressed by US Senator Chuck Grassley (R-Iowa).
Harbinson called on Members to constructively engage in negotiations during the forthcoming — and officially the last — modalities negotiating session taking place from 25 to 31 March, so as to "create the space for establishing modalities in line with the Doha mandate". However, as one source noted, "we would need a wonder to have trading partners agreeing on modalities by end-March". Agriculture will be among the key issues discussed at the next mini-Ministerial, to be held sometime between 28 June and 3 July in Egypt.
Additional Resources
For further information on the agriculture negotiations, including Harbinson’s modalities drafts, see http://www.wto.org/english/tratop_e/agric_e/agric_e.htm.
A collection of stories published in BRIDGES Weekly on the ongoing negotiations is available on the ICTSD website.
"Note On The Harbinson Draft On Modalities In The WTO Agriculture Negotiations", the Danish Research Institute of Food Economics, 11 March 2003.
ICTSD reporting; "Commission reacts to WTO draft on farm trade liberalisation," EU PRESS RELEASE, 12 February 2003; "Australia rejects revised WTO plan to liberalise Ag trade," DOW JONES, 19 March 2003; "Senate finance blasts EU, ‘Harbinson’," WASHINGTON TRADE DAILY, 27 February 2003; "Agriculture: Few changes in second Harbinson Ag draft; Chair faults Members for lack of guidance," WTO REPORTER, 19 March 2003.