Bridges Weekly Trade News Digest • Volume 7 • Number 40 • 26th November 2003
Agriculture Consultations: Chair Reports Lack Of Engagement
Carlos Perez del Castillo, Chair of the General Council (GC), held informal "green room" consultations on agriculture with a group of around 30 key WTO Members from 20-21 November. Chair Perez del Castillo — who had hoped Members would negotiate on various elements contained in the most recent draft language on agriculture (see BRIDGES Weekly, 19 November 2003) — voiced his frustration after the meetings over what he termed "a persistence of differences on the big issues".
In the face of a continuing deadlock in global farm talks, Chair Perez del Castillo doubted whether he would be able to come up with a new agricultural text by a senior level GC meeting scheduled for 15 December. According to sources, Members are leaning towards a solution under which they would reach an agreement by a later date in the first quarter of 2004. Some Members, such as the EC, even questioned whether a meeting of senior officials should be convened if Members "aren’t ready on 15 December".
No convergence, retreat to old positions
After the meeting on 20-21 November, which was the first one in the second phase of Perez del Castillo’s consultative post-Cancun process (see BRIDGES Weekly, 15 October 2003, http://www.ictsd.org/weekly/03-10-15/story1.htm), the GC Chair expressed his disappointment with the outcomes of the consultations. He said they had demonstrated a lack of "any convergence" in positions, and expressed concern over the persistence of difficulties with regard to the major issues of market access, domestic support and export competition. Chair Perez del Castillo explained that his original idea had been "to get some common ground," but that he didn’t see that in the meeting room. Because of the absence of a real negotiating mode, the GC Chair declared that at this stage "I don’t even have the basis for a revised paper". Del Castillo had announced earlier that he would try to come up with a revised text on agriculture, which would be based on whatever common ground emerged during the consultative process (BRIDGES Weekly, 30 October 2003, http://www.ictsd.org/weekly/03-10-30/story1.htm) .
G-20 tables proposal
During the discussions, Members had reportedly mainly put forth old positions from the pre-Cancun negotiations. For example, the G-20 presented a revised version of the 13 September ‘Derbez text’ (the second revision of the draft Cancun Ministerial Text). The group had already prepared this text at Cancun, but it was tabled only now (downloadable at http://www.ictsd.org/ministerial/cancun/docs/G21_ag_text.pdf). On domestic support, the G-20 suggested that the reduction of Amber Box (trade distortive support) measures on a product-specific basis "remains under negotiation," that Blue Box (only partly decoupled subsidies under production-limiting programmes) measures eventually be phased out, and that disciplines of the Green Box (mostly decoupled and at most minimally trade-distorting support) be "strengthened".
On market access, the Group called for a mandatory expansion of tariff rate quotas, as well as the elimination of the special agricultural safeguard (SSG), which is currently also eligible for developed countries. For developing countries, the G-20 proposed to reintroduce a three-pronged tariff reduction formula, using a somewhat flexible Uruguay Round formula across the board, but with different levels of reduction commitment (see BRIDGES Weekly, 12 February 2003, http://www.ictsd.org/weekly/03-02-13/story1.htm). India, in particular, argued that a study it had conducted revealed that using the banded approach proposed in the Derbez draft would cut developed country tariffs only by an average of 30 percent, whereas developing countries would need to bring down their tariffs by 30 to 70 percent. With respect to export competition, the developing country alliance mainly insisted on fixing a date for the elimination of export subsidies.
EC and US comments
During the talks, the EC repeated its demand that the so-called ‘Peace Clause’ (exempting agricultural subsidies covered by the Agreement on Agriculture from being challenged in dispute settlement cases) be extended beyond 31 December 2004, a request that was vehemently opposed by various G-20 and Cairns Group countries. On the phase-out of export subsidies, the European trade bloc stated that it could not respond to this demand until it had concluded its internal consultation process.
The US reportedly insisted on having a uniform tariff reduction formula for all Members, including developing countries, but was willing to grant developing countries special and differential treatment in the form of lower reduction commitments. Commenting on the G-20 proposals on domestic support, the US said it would prefer the approach taken in the Derbez text, and if a two-step process were envisaged for Blue Box reduction, this would also have to apply to tariffs.
According to sources, Chair Perez del Castillo is planning to resume the agriculture consultations within the next two weeks.
ICTSD reporting; "Agriculture: WTO Chair Castillo cites disappointment with latest post-Cancun agriculture talks," WTO REPORTER, 24 November 2003; "Report on WTO agriculture consultations; no convergence of view," THIRD WORLD NETWORK INFO SERVICE, 25 November 2003; "WTO Negotiators say they may miss another deadline," AP, 18 November 2003.
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