WTO Ministerial Section • Volume 7 • Number 5 • 12th February 2003

Agriculture: Harbinson Circulates First Modalities Draft

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On 12 February, Stuart Harbinson, Chair of the special (negotiating) session of Committee on Agriculture (CoA), submitted his first proposal for the establishment of modalities for the ongoing agriculture negotiations. The text, which has been drafted by Stuart Harbinson in his personal capacity, will be discussed during the forthcoming CoA special session from 24-28 February. It will also be debated at the mini-Ministerial in Tokyo, Japan, scheduled for 14-16 February. According to the work programme agreed at Doha, Members are to finalise the negotiating modalities — setting out the scope of the negotiations, the methodology to be followed during the actual process, and the end-results expected — by the end of March this year.

"Possible paths to solutions"

In his introductory remarks, Chair Harbinson noted that his draft should be considered against the backdrop of "the difficulty participants have so far had in building bridges between widely divergent positions and the consequent lack of guidance on approaches to solutions". He made the same references with regard to his 18 December overview paper on agriculture (BRIDGES Weekly, 29 January 2003). Therefore, the new paper "represents no more than a first attempt to identify possible paths to solutions." It "does not claim to be agreed in whole or in any part and is without prejudice to the positions of participants," Harbinson added.

Harbinson’s drafting approach

Despite the many unresolved issues on how to address the further reduction of Members’ tariffs, their exports subsidies and domestic support, Harbinson in his paper tokes a rather proactive approach by offering modalities options even in the most contested areas — such as the formula for tariff reductions and the handling of Green Box support (mostly decoupled and at most minimally trade-distorting support). However, he widely uses square brackets in his 34-page draft, to propose figures for indicative purposes, to suggest alternatives, or possible formulations. On substance, the paper thoroughly addresses special and differential treatment (S&D) in most of the modalities items — as demanded by many developing countries — while no particular role has been assigned to agricultural non-trade concerns (NTCs) on an across-the-board-basis as e.g. demanded by European Members, Japan, Korea and Mauritius.

Market access

On market access, Harbinson suggests a three-pronged approach: for developed countries, tariffs higher that 90 percent should be slashed by 60 percent on average, with a minimum cut of 45 percent, whereas those between 90 and 15 percent should be cut by 50 percent on average, but at least by 35 percent per tariff line. For tariffs from 15 percent downwards the respective numbers would be 40 and 25 percent. All tariffs would be reduced in equal instalments within a five-year term. Developing countries, however, would be given a ten-year implementation period, in which they would be required to lower tariffs beyond 120 percent by 40 percent and 30 percent on average. For tariffs between 120 and 20 percent as well as 20 percent and lower, Harbinson suggests reductions of 33 and 23 percent, and 27 and 17 percent respectively.

Furthermore, developing countries would be allowed to denominate a number of "strategic products [SP] with respect to food security, rural development and/or livelihood security concerns," the tariffs of which they would only need to cut by ten percent on average, but at least by five percent per tariff line. In addition, developing countries could take recourse to the existing special safeguard mechanism (AoA Article 5) for these SP products which. The safeguard mechanism would be eliminated for developed countries.

Domestic support

According to the draft, the Green Box would be maintained in its existing format, but its discipline would be strengthened as repeatedly demanded by Members, such as the Cairns Group of agriculture exporters. For developing countries, however, further flexibilities would be provided for the pursuit of food security and rural development objectives. Developed countries could also take recourse to an expanded AoA Article 6.2 Box (S&D Box), allowing them to provide unlimited trade- distorting subsidies to promote rural development.

The so-called Blue Box (only partly decoupled subsidies under production-limiting programmes) would be maintained, but its expenditures capped/bound and reduced by 50 percent over five years. Developing countries would be given S&D treatment.

With regard to the Amber Box (trade distortive support), the aggregate measurement of support (AMS) would decrease by 60 percent in five years for developed countries, and 40 percent in 10 years for developing country Members.

Export competition

Harbinson further proposes in his paper to phase out at least 50 percent of export subsidies within 5 years, whereas the rest would be reduced to zero in 9 years. Developing countries would be given ten years and 12 years respectively. With regard to the treatment of export credits, Harbinson distinguishes between financing support conforming to a set of detailed conditions, and non-conforming financing support, which would be "subject to specific financing reduction commitments".

Other issues

Addressing the least-developed countries (LDCs), the draft says that LDCs would not be required to undertake reduction commitments, but that they could be "encouraged to consider making commitments commensurate with their development needs on a voluntary basis". Furthermore, the draft indicates that eventually special treatment could be provided for newly acceded Members such as China, as well as other "certain groupings" such as small island developing states (SIDS), vulnerable developing countries and transition economies.

Chair Harbinson’s First Draft of Modalities for Further Commitments is available at http://www.ictsd.org/issarea/ag/resources/Firstdraft.pdf.

ICTSD reporting.