Bridges Weekly Trade News Digest • Volume 13 • Number 35 • 14th October 2009

Ag Chair Consults on Market Access; Banana Deal Reportedly Closer

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Agriculture negotiators in Geneva met in small group consultations convened by the chair of the farm trade talks, Ambassador David Walker of New Zealand, amid reports of gradual convergence on the controversial issue of bananas.

Walker’s small-group consultations are focusing this week on a set of market access issues, several of which were inter-related. These include the conditions under which members might be allowed to establish new tariff quotas (tariff quota creation); rules on the ’sensitive’ products that importers would be allowed to shield from tariff cuts in exchange for expanded market access through quotas; tariff simplification; and tariff caps. The meetings followed discussions last week on domestic support, which focused on production-limiting blue box payments and on cotton.

The chair has told delegates that he plans to go through the draft negotiating text that was prepared last December by his predecessor, Ambassador Crawford Falconer, examining issues that are bracketed (indicating lack of consensus) or annotated as requiring further work. Some members have cautioned, however, that the draft also contains unresolved issues that were not placed in brackets by Falconer.

Negotiators told Bridges that the next set of consultations were due to address outstanding issues regarding the ’special safeguard mechanism’, which would allow developing countries to protect domestic producers by imposing additional duties in the event of a price depression or a sudden surge in import volumes. Disagreement over the safeguard was a critical factor in derailing the Doha trade talks in July 2008 (see Bridges Weekly, 7 August 2008, http://ictsd.net/i/news/bridgesweekly/18034/).

Walker has also invited all WTO members to participate in technical discussions over the data that governments will ultimately be required to provide when formally presenting their commitments as part of an eventual Doha deal (see Bridges Weekly, 7 October 2009, http://ictsd.net/i/news/bridgesweekly/56535/). Sources reported that members had discussed updating EU data to account for the bloc’s expansion to 27 members, as well as issues such as how data on the value of countries’ agricultural production could be verified.

At the same time, Geneva-based delegates indicated that there had been ‘progress’ in moving towards agreement on bananas, in an attempt to resolve one of the longest-running trade disputes in the multilateral system to date. The controversy has pitted mainly Latin American countries that do not receive EU trade preferences against those in the African, Caribbean and Pacific (ACP) region, which do. Reports indicate that the tentative deal that was struck in July 2008 could eventually be the basis of the accord (see Bridges Daily Updates, 28 July 2008, http://ictsd.net/i/wto/englishupdates/14789/).

Reportedly, members were close to resolving the question of when the new arrangement would become legally binding on the EU. Sources emphasised that any deal would need to establish how the WTO’s Doha Round would provide faster liberalisation for ‘tropical products’, and slower and gentler liberalisation for products that have traditionally benefited from trade preferences. Again, Latin American and ACP countries have disputed the products that should be subject to these provisions. ACP countries also cautioned that the agreement would also need to resolve outstanding questions regarding the amount of adjustment aid that the EU would provide to them.

Some insiders say that a deal may not be as imminent as recent rumours would suggest. Brussels is asking the Latin American countries to give up too much, a Geneva-based delegate explained. The source pointed out that the EU wants to condition the deal on approval from Washington, and on a satisfactory Doha Round outcome on preference erosion and tropical products for ACP countries.

Costa Rica, for one, has publicly rejected the proposed deal. “I don’t feel close to an agreement,” Costa Rica’s trade minister, Marco Vinicio Ruiz, said earlier this week, according to a report in La Nación.

ICTSD reporting. “Comex rechaza versión de acuerdo bananero,” LA NACION, 10 October 2009.

One response to “Ag Chair Consults on Market Access; Banana Deal Reportedly Closer”

Jonathan Hepburn 15th October 2009 at 08:20
For analysis of how a WTO banana deal could affect different countries and groups, see ICTSD’s issue paper no. 21, by Giovanni Anania, “How would a WTO agreement on bananas affect exporting and importing countries?”, online at http://ictsd.net/i/publications/50782/