WTO Ministerial Section • Volume 7 • Number 8 • 5th March 2003
Agriculture: WTO Members Prepare for Extended Modalities Phase
WTO Members met for a 24-28 special (negotiating) session of the Committee on Agriculture (CoA) to discuss the highly controversial first agricultural modalities draft (see BRIDGES Weekly, 27 February 2003) circulated by Chair Stuart Harbinson on 12 February. Although Chair Harbinson had hoped to receive Members’ clear instructions for the preparation of a forthcoming second draft, the talks during the five-day session provided him with "little if any guidance," as he stated at a 28 February formal wrap-up meeting. Against this backdrop — and with trade negotiators starting to openly express their serious doubts that the end-March deadline for adopting modalities could be met — Members are reportedly preparing for extended negotiations up until the September Cancun Ministerial. In this context, negotiators are also turning their attention to the next ‘mini-Ministerial,’ to be hosted by the Egyptian government in end-June (see related story, this issue).
The modalities, scheduled to be agreed by 31 March, are to 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. According to the Doha work programme, Members are to "submit their comprehensive draft Schedules based on these modalities no later than the date" of the 10-14 September Ministerial Conference in Cancun, Mexico. The agriculture negotiations — just as all negotiations under the WTO’s so-called ’single undertaking’ — are to be concluded by 1 January 2005.
Problem child: market access
During the five-day CoA negotiating session, virtually all Members expressed their disappointment about Harbinson’s draft modalities — ranging from outright rejection (Bulgaria and Japan), concerns about "unrealistic" targets set out in the paper (EU, Switzerland, Norway and others) to criticism about the lack of ambition with regard to the proposed reductions in tariffs, export subsidies and domestic support (US and Cairns Group of agricultural exporters). Consequently, in the plenary sessions Members moved only little from their traditional positions, but accused each other of blocking the negotiating process.
The discussions indicated that Members had most problems with the section of Harbinson’s draft dealing with certain market access. Switzerland — speaking for a those eight countries (with Bulgaria, Chinese Taipei, Israel, Iceland, Liechtenstein, Mauritius and Norway) having the biggest problems with ambitious reduction commitments — reiterated its previous warning that without striking a sound balance between trade and non-trade concerns (NTCs), only minimum results could be expected to come out of the current farm trade round. The EU and Japan made similar statements.
Moreover, small island developing state (SIDS) Mauritius presented a list supported by 75 ‘Friends of the Uruguay Round Formula’ (including the EU plus its 15 member states) that called on Harbinson to revert to the linear tariff reduction method used during the Uruguay Round (i.e. cutting tariffs by 36 percent on average, with a minimum cut of 15 percent per tariff line). "The Chair said he wanted some collective guidance," said a Norwegian trade source. "This is collective guidance!"
In the current modalities draft, Harbinson suggests a hybrid approach with elements from both the Uruguay Round and the ‘Swiss’ or ‘harmonising formula’, leaving some flexibility in tariff reduction while cutting higher tariffs more than lower ones (see BRIDGES Weekly, 12 February 2003). Among others, the Uruguay Round formula camp includes European countries, EU accession countries, African, Caribbean and Pacific (ACP) countries, Japan, Korea, and — notably — India. Other key developing countries such as China, Egypt and Pakistan indicated that they could, at the end of the day, only subscribe to a harmonising or Swiss approach (as promoted by Cairns and the US) if they would be either exempted from this reduction model or if developed countries would agree to harmonised reductions in subsidies as well.
How to break the knot?
Sources indicated that it would be extremely difficult for key trading partners such as the US and EU to make the political decisions needed to arrive at a possible compromise in the farm trade negotiations. While the European Commission is facing the challenging task of obtaining a broadened negotiating mandate from the 15 EU member states by September this year, US Trade Representative (USTR) Robert Zoellick has had problems scaling back demands put forward in recent US proposals, as Congress is expecting him to negotiate an accord which would "result in a good deal for America’s farmers, ranchers and agricultural producers," in the words of US Senator Chuck Grassley (R- Iowa).
Nevertheless, some sources indicated that Zoellick had expressed his understanding that trading partners such as the EU had problems moving on agriculture without synchronised progress in other key areas of the ’single undertaking’. Against this backdrop, and in order to use the time left ahead of Cancun in an efficient way, Members are reportedly debating whether they could at least continue technical discussions on certain aspects of the modalities draft — such as tariff rate quota (TRQ) administration, or the details of a special safeguard mechanism for developing countries — before Members meet at the Ministerial level in Cancun in September. As a first step in managing the post-31 March period, Egypt announced that it would organise a mini-Ministerial sometime between 28 June and 3 July in Sharm El Sheikh. Stuart Harbinson will prepare a second modalities draft prior to the next (and last) meeting in the official March 2002 - March 2003 modalities phase, scheduled to be held from 25-31 March.
ICTSD reporting; "Ministerial: Egypt targets late June date for mini- ministerial gathering," WTO REPORTER, 4 March 2003; "Agriculture: WTO chair urges members to ‘get on with it’ in Ag talks; doubts increase about deadline," WTO REPORTER, 3 March 2003; "Senate finance blasts EU, ‘Harbinson’," WASHINGTON TRADE DAILY, 27 February 2003.