Bridges Weekly Trade News Digest • Volume 8 • Number 40 • 24th November 2004

WTO Agriculture Negotiations Progress On Technical Issues

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From 15-19 November, WTO delegates engaged in intense negotiations on agriculture. The talks, comprising the second "agriculture week" following agreement on a July Package for moving the Doha Round forward (WT/L/579), included detailed discussions of technical issues.

Wrapping up the week in a formal meeting of the special (negotiating) session of the Committee on Agriculture (CoA) on 19 November, Chair Tim Groser commented that the outcome was somewhat mixed, but the atmosphere had been constructive. Members had made progress on issues such as disciplining export subsidies, while talks on the Green Box (subsidies that do not distort trade) had failed to move. Members also established a sub-committee under the CoA special session to deal specifically with the issue of cotton during the meeting (see related story, this issue). Some delegates commented that the week’s talks had covered a large range of issues, making it difficult to adequately engage on all fronts. Others said enough issues had to be tabled sufficiently early to allow Members to agree on full negotiating modalities — guidelines for how to negotiate — in time for the Hong Kong ministerial in December 2005.

Following the meeting, Brazilian Ambassador Luis Felipe de Seixas Correa commented that "We are in what I would say is a pre-negotiation phase. No one expects the negotiations to really pick up until March or April next year".

Three-pronged negotiating process

The negotiations during the agriculture week took place in three different settings: in an informal negotiating session open to the full Membership that allowed for general statements on issues under review; in more focused open-ended technical consultations that delved deeper into the issues; and in small group consultations involving technical experts.

Progress on export credit, food aid

Members addressed the issue of how to discipline export credit, guarantees and insurance, against the backdrop of the July Package, which bans credit for periods of over 180 days. The US is expected to feel most of the effects of tighter disciplines in this area. Delegates made progress on minimum cash payments, interest payments, risk sharing and other technical discussions. Members generally felt that the "Harbinson text" (a pre-Cancun negotiating text from 2003, available online here) could serve as a good basis for the negotiations in this area. A US official noted that "There weren’t a whole lot of new ideas on how to improve the text," adding that, "It’s likely that the Harbinson text will be the framework and there could be some additional disciplines on the margins". While some Members felt developing countries should be provided with the flexibility to make use of export credits, the EC said it did not believe that measures that increased debt were suitable in this context.

On food aid, Members generally agreed that it needs to be disciplined to make sure it was provided only when commercial options were not available. In this regard, they discussed whether food aid should only be given as "untied" finance, or fully in grant form. Recipient countries reportedly remained rather silent during the talks.

Divisions emerge over Green Box, tropical products

During the informal talks, Members disagreed over what reviewing and clarifying the Green Box referred to. The EC felt the review only implied a "health check-up," while the G-20 (major developing countries, including Brazil, India and South Africa) and the Cairns group of agriculture exporters wanted to see new disciplines on support programmes, in particular income support programmes. The G-10 (mainly developed country net food importers) stressed that the Green Box was an important tool for the transition out of trade distorting subsidies. Brazil, on the other hand, underscored that income support programmes can help producers cover risks and general costs, thus indirectly leading to higher production.

In response to Costa Rica’s proposal on improved market access for tropical products (see BRIDGES Weekly, 17 November 2004), the mainly Latin American proponents of the proposal stressed that progress in this area was long overdue. However, Members including Jamaica and Mauritius noted that important preference schemes are currently in place for tropical products like sugar and bananas; the complete liberalisation of trade in these products could harm countries dependent on these preferences.

Also discussed in detail were issues related to state trading enterprises, tariff quotas and tariff quota expansion and methodologies for capping the Amber Box support (trade distorting measures).

The next "agriculture week" is scheduled for 13-17 December. At this session, Members are expected to address the tariff reduction formula and issues Members see as being linked to it, such as "sensitive" and "special" products.

ICTSD reporting; "Progress on Export Credit Use Cited By Officials at Latest Doha Round Ag Talks," 22 November 2004; "WTO Negotiators Finish Week of Farm Talks," AP, 19 November 2004.