Bridges Weekly Trade News Digest • Volume 12 • Number 20 • 4th June 2008
Few Changes as WTO Farm Talks Continue
Delegates reportedly began “digging in” to negotiations on a deal to reduce subsidies and tariffs on agricultural products at a 3 June meeting that was open to the entire WTO Membership.
At that meeting, as well as in a series of ‘Room E’ consultations held last week with some three dozen countries representing a cross-section of negotiating interests, delegates have sought to work through differences over the language in the draft modalities text on agricultural tariffs and subsidies that was issued by the chair of the agriculture committee on 19 May. Although important differences remain, Members are now focused on reducing the number of contentious issues on the table in anticipation of a potential high-level meeting of government officials in June or July. At such a meeting - if in fact one is held - trade ministers would attempt to make trade-offs among draft texts on agriculture, industrial goods, and other areas in order to reach a deal to bring an end to the round as a whole.
Brazil, on behalf of the G20 group of developing nations, and the Cairns Group of agricultural exporters, represented by Australia, issued statements criticising the recent US farm bill at yesterday’s meeting (see BRIDGES Weekly, 28 May 2008, www.ictsd.org/weekly/08-05-28/story5.htm). The groups see the current farm bill, which continues many direct payments to growers, as a move in the wrong direction when food prices are rising around the globe. The Doha Round seeks to reduce tariffs and subsidies in the agricultural sector, and in other areas.
Though the meeting held yesterday was part of the ‘transparency’ process of fleshing out Members’ responses to the recently released draft text, criticism of the US farm bill featured prominently in the discussions. However, Members did propose some slight modifications to the draft language on food aid and sensitive products.
Specifically, India issued a new proposal on sensitive products - goods that Members would be allowed to shield from tariff cuts in exchange for expanded access through import quotas. Under the Indian proposal, developing countries without tariff-rate quotas would be allowed two options. Either they could take a full formula cut in tariffs over three years in addition to the mandated eight, for a total of eleven years. Alternatively, they could deviate by 25 percent from the standard tariff cuts on two-thirds of their sensitive products over the course of six years instead of eight.
Additionally, the Dominican Republic issued a proposal on the monetisation of food aid. In a letter to the Membership, the country’s delegation requested that development objectives be added to a list of permissible monetisation. Currently, food aid may be monetised for purposes of internal transportation and the procurement of related inputs. This proposal contributed to what the chair of the agriculture negotiations described as “useful” discussions.
In the meetings held since the release of the draft text on 19 May, delegates have indicated that no major progress has been made toward a consensus. However, negotiators do seem compelled to nudge the agriculture modalities to a level of agreement that would allow high-level officials to begin making trade-offs across sectors, a process that would occur at a potential ministerial meeting in the next two months.
Some countries, such as Uruguay, have suggested that artificial timelines - such as potentially impending ministerial meeting - should not be imposed on the Membership. However, Members, including Uruguay, acknowledge that when negotiations resume, by the middle of the week beginning 9 June, they will have to “go, go, go.”
Pascal Lamy, Director-General of the WTO, in remarks at a summit on the food crisis in Rome, said that “through greater and fairer competition, international trade can help lower prices.”
Indeed, the rise in food prices has heightened the importance of WTO negotiations on agricultural trade. Alternating between periods of intensive negotiations and consultations with capital-based officials, delegates in Geneva now have a heightened sense of urgency to push the negotiations forward. Many hope that the food crisis will provide the political will necessary to positively impact the negotiations.
ICTSD reporting.