Bridges Weekly Trade News Digest • Volume 8 • Number 22 • 23rd June 2004

WTO: Delegates Kick Off Agriculture Talks In Geneva

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WTO Members are meeting from 23-25 June in the penultimate special (negotiating) session of the Committee on Agriculture (CoA) in the lead-up to a self-imposed deadline for agreeing on a negotiating framework by the end of July. The Chair of the CoA special session, Tim Groser, stressed at a 23 June opening plenary that he was still "nowhere near ready" to produce a framework draft. While he recognised that considerable progress had been made at the political level, he said progress at the negotiators’ level was "still maturing". Members of the group of ‘five interested parties’ (FIPs) — including the US, EC, Brazil, India and Australia — had met earlier on 22 June to advance discussions on market access, which is yet the most controversial issue in the area of agriculture. According to source, the US presented a proposal on a tariff reduction formula that would merge elements of the so-called ‘banded’ and ‘Swiss’ approaches for tariff cuts at the FIPs meeting. The proposal was received coolly by G-20 leader Brazil, which called the US proposal "unbalanced" and unacceptable for the developing country grouping.

Groser denies intention to produce framework draft

Kicking off three days of consultations, CoA special session Chair Tim Groser denied recent press reports suggesting he was about to produce a draft framework text sometime during or after the 23-25 June negotiations. "I would be completely lost if I were asked to do it this afternoon," the Chair told delegates. He acknowledged that at some stage he would need to produce a draft, but his text would depend on the negotiators’ positions converging much more. He further clarified that he would not try to produce a "Harbinson-type" paper by inventing possible compromises that lack any basis for agreement among Members. So far he had no fixed view on how to proceed — this would depend on the consultations, he said.

Assessing the latest developments in the global agriculture talks, Groser welcomed the various minister-level communications and meetings over the past months, but voiced his frustration over the slow process and "lack of intensity" in Geneva. While appreciating the leadership certain Members had demonstrated, he also cautioned that the talks needed to move much faster and that contributions were needed from all Members that distort trade through tariffs or subsidies.

FIPs continue plurilateral consultations

According to trade sources, the FIPs group met on the eve of the agriculture special session to continue working towards internal consensus on the three agricultural negotiating pillars: market access; domestic support; and export competition. On market access, which is by far the most controversial issue, the US reportedly presented a new proposal outlining two options for a tariff reduction formula. Both would combine the ‘banded’ approach (developed by former CoA special session Chair in his 2003 modalities draft), with elements of the so-called ‘Swiss’ formula, which brings down all tariffs horizontally to a maximum ceiling, effectively addressing tariff peaks. Moreover, the proposed formulas would integrate the concerns of countries such as the EC, Japan and Switzerland, which demand flexibility to protect a certain number of ’sensitive’ products, by applying only moderate tariff cuts to them. However, the proposal also calls for "effective" market access for sensitive products outside the formula, i.e. through tariff rate quota (TRQ) expansion.

In an initial reaction to the US paper, G-20 leader Brazil welcomed the proposal’s emphasis on cutting high tariffs relatively more than lower ones. However, the G-20 still found the proposal "unbalanced" overall, and could not accept it. In particular, the G-20 objected to the fact that elements of the Swiss formula would also be applied to developing countries, an idea that G-20 member India had rejected repeatedly since the kick-in of the modalities negotiations.

Reportedly, the US intended its paper as a means to "translate into specific text" points of convergence that had emerged at the 13 June FIPs meeting held at the sidelines of the UN Conference for Trade and Development (UNCTAD) XI ministerial conference in Sao Paolo (see BRIDGES Weekly, 16 June 2004). According to sources, the parameters ministers agreed on at UNCTAD XI included a reference to the ‘banded’ formula, with the additional option to protect certain ’sensitive’ products. Ministers had also decided that all Members — developing and developed alike — would be subject to the same general tariff reduction methodology.

The FIPs groups is continuing its consultations this week. The group may, if necessary, extend the talks over the weekend and into the following week.

The current 23-25 CoA special session will conclude with a formal plenary meeting on Friday, 25 June, afternoon. The next issue of BRIDGES Weekly will provide a report on the outcome of the negotiations.

ICTSD reporting; "Agriculture: US outlines possible compromise for market access pillar of WTO Ag talks," WTO REPORTER, 23 June 2004.