Bridges Weekly Trade News Digest • Volume 7 • Number 3 • 29th January 2003
Agriculture Negotiations Still Stalling
Little headway was made in bringing various sides together at a 22-24 January special (negotiating) session of the WTO Committee on Agriculture (CoA). The main goal of the special session was to "build bridges" to narrow the many wide gaps prevailing between Members’ negotiating stances. In his concluding remarks, Chair Stuart Harbinson was said to have expressed "serious concern" about the prospects of Members reaching agreement on agriculture negotiating modalities by their scheduled deadline at the end of March. Nevertheless, he announced on 26 January at the World Economic Forum held in Davos that he was set to prepare a first draft modalities proposal prior to a forthcoming mini-Ministerial meeting set to be held from 14-16 February in Tokyo, Japan.
Furthermore, on 27 January, EU member states finally adopted a new EU proposal for the WTO agriculture negotiations, after France and Ireland dropped their objections to the draft proposal as put forward by the European Commission in December last year (see BRIDGES Weekly, 20 December 2002). However, EU Agriculture Commissioner Franz Fischler indicated that he did not expect modalities to be agreed by 31 March, hoping instead for agreement on agriculture modalities at the fifth Ministerial meeting in Cancun in September. The Cairns group of agriculture-exporting countries and the US insisted that the negotiations must stick to the original work programme as agreed by Members in Doha.
Little movement in agriculture special session
At the 22-24 January CoA special session, Members met to discuss the overview paper on the modalities negotiations that was tabled by Chair Harbinson on 18 December (see BRIDGES Weekly, 20 December 2002). Although Harbinson had declared "building bridges" as the motto of the meeting, Members made very few concessions, and most delegations made interventions simply to underline points they wanted to include in the modalities to be agreed. "It is clear that we urgently need to change gear and engage in serious negotiations," Harbinson urged Members. "If everyone remains camped on their current positions, the prospects for the negotiations are not encouraging". He added that "this must be a matter of concern" in the face of the fast approaching end-March deadline.
In the discussions, several members of the Cairns Group, including Uruguay, Argentina, Brazil, Chile and Thailand reportedly expressed consternation over the lack of proposals from developed countries such as the EU, Japan and Switzerland. For their part, these countries reiterated their concern that they were unable to table concrete numbers without prior agreement on agriculture rules as well as the treatment of non-trade concerns (NTCs) such as environment, food safety, and geographical indications (GIs).
Developing countries repeated their differing views on special and differential treatment (S&D) to be granted to poorer countries, ranging from no discrimination between developing countries (e.g. Thailand and Malaysia) to special treatment and preferences for the most vulnerable, as proposed by small-island state Mauritius. Moreover, China and other newly acceded Members, as well as economies in transition, reiterated their demands to receive differentiated treatment. The Cairns Group, India, China and some others suggested linking the three pillars under the Agriculture Agreement (market access, export competition, domestic support) so as to arrive at equitable negotiation results.
Notably, Cairns Group members Chile, Malaysia and Thailand indicated that they would be willing to agree to a new special safeguard mechanism (SSG) for developing countries, adding, however, that they were only willing to accept a formulation that would strictly limit its applicability to certain products under tight conditions.
New EU ag proposal submitted to WTO, controversy over CAP reform
After more than a month of internal negotiations, EU member states at a 27 January Council of General Affairs meeting finally approved a WTO negotiating proposal presented by the European Commission in December last year. Subsequently, the proposal was submitted to the WTO. Previously, France and Ireland had opposed the Commission’s proposal, particularly due to an initiative to cut EU export subsidies by 45 percent as well as to eventually eliminate export subsidies on "products such as wheat, oilseeds, olive oil and tobacco". Reportedly, France and Ireland dropped their resistance as a result of exactly these product specifications being deleted from the revised proposal.
Despite the EU-internal agreement on a new negotiating mandate for the Commission, a new proposal by the Commission on 22 January on reforming the EU Common Agricultural Policy (CAP) met with severe resistance, primarily from France, Spain, Italy, Portugal, Greece and Belgium. These countries oppose EU Agriculture Commissioner Fischler’s plans to further de-couple CAP support paid to EU farmers from production requirements. While the new proposal is mostly derived from an earlier reform plan presented by Fischler in mid-2002 (see BRIDGES Weekly, 17 July 2002), it contains several modifications, including less emphasis on rural development in CAP spending as well as a ceiling of EUR 300,000 per farm in annual support being dropped. A new CAP proposal is expected to be agreed in mid-2003.
According to Fischler, the new CAP policy would have to be agreed before EU Member States could provide him with a new negotiating mandate, possibly going beyond the current mandate. "Member States would never give a mandate which is outside the present policy", he declared. The new EU proposal is based on a mandate from the year 2000. In contrast, EU Trade Commissioner Pascal Lamy reportedly said that an agreement on CAP reform was not a prerequisite for the EU to table a strong, balanced and pro-reform proposal for the WTO negotiations. "It would be the icing on the cake," he stated.
Additional resources:
The EU press release on the adoption of the Commission’s proposal by EU member states can be found at: http://europa.eu.int/comm/agriculture/index_en.htm.
The Commission’s proposal can be found at: http://europa.eu.int/comm/agriculture/external/wto/officdoc/mod.pdf
The 22 January CAP reform proposals presented by the Commission can be found at: http://europa.eu.int/comm/agriculture/mtr/memo_en.pdf.
A new OECD report on Farm Household Incomes can be viewed at the new Agriculture section on the ICTSD website at: http://www.ictsd.org/issarea/ag/resources/index.htm.
"Agriculture: European Union States Approve Offer To Doha Agricultural Round," WTO REPORTER, 28 January 2003; "WTO Farm Panel Chief To Unveil Draft Prior To Tokyo Talks," KYODO NEWS INTERNATIONAL, 27 January 2003; "EU Govts Approve Plan To Cut Farm Tariffs For WTO Talks," AP, 27 January 2003; "Agriculture: Harbinson Disappointed With Latest Round Of WTO Talks, Promises Modalities Draft," WTO REPORTER, 27 January 2003; "US Insists Farm Talks Deadlines Must Be Met," REUTERS, 23 January 2003; "European Commission Lacks Courage To Reform CAP," FRIENDS OF THE EARTH PRESS RELEASE, 22 January 2003.