Bridges Weekly Trade News Digest • Volume 8 • Number 15 • 28th April 2004
Agriculture Talks Fail To Meet Expectations
The second set of post-Cancún negotiations on agriculture in the Committee on Agriculture (CoA) special session concluded on 23 April without making any substantive progress. As reported last week (see BRIDGES Weekly, 22 April 2004), the talks primarily focused on market access — the area widely considered as being most difficult to resolve. The dozens of informal meetings between various groupings of Members held from 19-23 April revealed that major divergences on an appropriate formula for tariff reductions still persist, and CoA special session Chair Timothy Groser expressed some disappointment over the outcome. Wrapping up the agriculture week in a formal session, he said that even his "modest expectations" had not been met. A source from G-10 group, which includes countries such as Switzerland and Japan, said he was "not quite sure it’s a setback (…) but there are certainly more divergent views".
Divergences persist over market access
According to trade sources, divergences are growing with regard to two major issues: first, on the potential formula for reducing agricultural tariffs; and second, on the potential increases in tariff quota volumes. On the formula, a number of Members oppose the so-called blended tariff reduction formula. The blended formula combines elements of the so-called Uruguay Round (UR) formula, with sets an average reduction with a minimum reduction per tariff line — to be applied to certain "import sensitive" products — and the Swiss formula, which would bring down all tariffs horizontally to a maximum ceiling (effectively addressing tariff peaks). It also involves a commitment to provide zero-tariff access to a certain number of products. The formula originally emerged in a joint EC-US position in the lead-up to Cancún.
Instead, the G-20 and the Cairns Group of agricultural exporters have proposed reviving the so called the "banded" (or tiered) approach, originally proposed by former CoA Chair Stuart Harbinson. This approach implies different reduction commitments for different tariff bands, as well as accompanying measures to protect sensitive products from increasing competition. This approach, however, faces stiff resistance from the EC and US. While the US reportedly is trying to negotiate only small adaptations within the "blended" formula, the EC has signalled some openness to different proposals. US chief agriculture negotiator Allen Johnson said on 22 April that he was ready to discuss certain aspects of the "blended" formula, but was opposed to change the approach "just for the sake of changing formulas". The EC on the other hand would, according to a trade official, consider the possibility of replacing the "blended" formula by the "banded" formula, but only if some measures were agreed on to enable the EC to protect its most sensitive sectors.
On increased tariff rate quotas, the EC said a stand-alone provision calling for substantive increases of the tariff rate quotas was would be "unacceptable".
EC seeks clarification on "parallelism"
At the margins of the meeting, the issue of "parallelism" emerged. The EC said it was willing to make "very significant commitments" in the export subsidy issue, but only if a certain parallel movement was made on tackling effectively all export subsidy components in the form of food aid, credit and guarantee programs, as well as State trading enterprises. An EC official said "we need to get a clear understanding of what other WTO Members are ready to put on the table", adding that "we want to see parallelism, and I think people are ready to engage with us now on looking at what this means".
Groups reporting back
On Friday, 23 April, Chair Groser provided the different groups the opportunity to report on the negotiations, and three groups seized the occasion. Mauritius, on behalf of the African Group, said that the discussions on market access had been too short, and that longer in-depth discussions still were needed. Furthermore, the Africans reiterated their call for a real integration of trade preferences into the framework text and a better understanding of Special Products (SP) and a Special Safeguard Mechanism (SSM).
The G-10 thanked the G-20 for trying to bridge the gaps and injecting momentum by proposing the "banded" formula, but warned that if such an approach proved to be a "twin" of the Harbinson draft, the proposal would be unacceptable, even without any numbers. Indonesia, speaking to the G-33, reported a better understanding between the members, and reiterated its ambition with respect to operationally integrating the SP and SSM concepts in the framework negotiations.
The next agriculture negotiations are scheduled for 2-4 June, 23-25 June and 14-16 July.
ICTSD reporting; "WTO Ag chair cites disappointing outcome to farm trade talks; expectations not met," WTO REPORTER, 26 April 2004.