Bridges Weekly Trade News Digest • Volume 12 • Number 17 • 14th May 2008
WTO Ag Chair announces revised text imminent
The chair of the WTO agriculture negotiations has told Members that he would circulate a revised blueprint deal by 16 May, or early the following week.
The long-awaited draft setting out formulae and figures for subsidy and tariff cuts would not be “the final text”, Ambassador Crawford Falconer New Zealand) warned delegates at a 9 May meeting of the negotiating committee. Further iterations would still be required, as delegates continue to work out the details of a potential accord on the ’sensitive products’ that will be shielded from full liberalisation, and the ‘tropical products’ on which tariffs will be reduced more quickly.
Delegates told Bridges that a long-heralded ‘mini-ministerial’ meeting to hammer out framework ‘modalities’ accords on agriculture and manufacturing trade might now be postponed to late June or even July. For the past three years, July has been an annual ‘crunch time’ at the WTO as Members have pushed - unsuccessfully — for an agreement before the global trade body’s August holiday (see BRIDGES Weekly, 7 May 2008). June may be difficult for reasons unrelated to glacial progress in the negotiations themselves: the European football championship will leave Swiss security forces and hotels busy for much of that month. However, some suggested that a trade summit could be held elsewhere if the political will for a breakthrough could be found.
Falconer said that following the release of the draft text, Members would have a week to send it back to capitals for analysis. Members would then have some time to discuss it in the agriculture committee. Barring any derailments, the text would then go to a so-called ‘horizontal process’ in which senior trade negotiators — and ultimately ministers — are expected to make trade-offs between agriculture, industrial goods and possibly also other areas in order to arrive at a deal.
While developing countries emphasised the need to be given adequate time to discuss the draft in the issue-specific agriculture committee, some developed countries called for the negotiations to move as quickly as possible to the horizontal process.
Sensitive products still sensitive
Delegates continued to hold small-group and bilateral discussions to clarify the extent of expanded market access that exporters would receive as compensation for the gentler tariff cuts allowed for countries’ “sensitive” products.
Countries have agreed that this expanded market access, in the form of import quotas, should be based on an importing country’s total domestic consumption of a given product. However, determining consumption levels for the purpose of estimating quota expansion has proved complicated, especially for processed foods and very specific products for which data is not available. In recent weeks, Members have been discussing a potential methodology for calculating domestic consumption put forward last month by a set of six importing and exporting countries (see BRIDGES Weekly, 11 April 2008).
Falconer told negotiators that there was still not “unanimity” amongst the Membership on the proposed compromise methodology, but that “apart from two or three Members… there was not a wholesale rejection of that approach.” Argentina in particular is believed to be dissatisfied with the six countries’ approach, while others have expressed concerns about how specific products would be treated.
Trade sources indicated that the proposal’s sponsors - Australia, Brazil, Canada, the EU, Japan and the US, informally dubbed the ‘G-6′ - were meeting with other import-sensitive countries such as Taiwan and South Korea. In small group discussions last week, these importers expressed concern that some tariff lines that they might want to designate as ’sensitive’, such as those for rice, were not included in the list of products originally tabled by the G-6 (not to be confused with an earlier ‘G-6′ configuration of major trading nations that included India instead of Canada).
Also unresolved was the eligibility for sensitive product status of a number of products such as tea, coffee and bananas. Some countries would like to subject these to expedited liberalisation as ‘tropical products’, rather than shallower-than-normal tariff cuts. Informal discussions on this issue could take place this week, said one source.
Tropical products: bilateral discussions continue
The group of Latin American proponents of tropical product liberalisation continues to meet with the EU in an attempt to discuss, tariff line by tariff line, what kind of enhanced duty cuts could be expected. The EU was reported also to be in separate discussions with the African, Caribbean and Pacific (ACP) group of countries that it has traditionally granted trade preferences for some of the same products. Many ACP countries are concerned that tropical product liberalisation would hurt their own competitiveness.
Falconer said that the discussions on preference erosion and tropical product liberalisation “have not yet reached fruition.” If they did before he finalised his draft text, he added, he would try to reflect this, but otherwise would maintain the existing language from the previous draft, spelling out two broad alternatives for more or less extensive and rapid liberalisation. However, an EU delegate said that “convergence is potentially within reach” by the end of this week.
‘Special products’: importers reject exporters’ request for more details
Canada, the US, Australia and Uruguay called for developing countries to declare which products they are likely to designate as ’special’ - making them eligible for gentler tariff cuts, or even outright exemption from reduction, on the basis of food and livelihood security and rural development criteria. Exporting countries want this information in order to better assess how their market access prospects stand to be affected.
India and Turkey - both members of the G-33 group of developing countries that has been pushing for substantial flexibility to retain protection on special products - opposed these demands, arguing that, unlike sensitive products, there were specific criteria for choosing special products, so such information was unnecessary.
New draft: limited progress on market access?
Negotiators have only addressed a limited number of outstanding controversial issues since the chair’s last draft was released in February, limiting the potential for revision. Nevertheless, trade sources offered some speculations on where the new text might attempt to spell out areas of convergence.
Sensitive products, the issue that has dominated delegates’ attention for at least the last five weeks, would definitely be one of these, said one source.
Potential future provisions on other controversial areas, such as special products and the new ’special safeguard mechanism’ for developing countries, could remain largely untouched, primarily for want of new developments. Most changes would probably appear in the section on market access - the area where the most outstanding issues remain - but, throughout the draft, Falconer may attempt to replace indicative ranges of figures such as for tariff or subsidy cuts with a single suggested number. The chair himself emphasised once again that he would not try to “invent things”, but rather would seek to capture actual convergence that had occurred in the talks so far.
ICTSD reporting.