22nd October 2009

Bridges Weekly | US Seeks More Protection for ‘Sensitive’ Farm Products at WTO

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The US has informally suggested that it be allowed to protect an additional two percent of agricultural tariff lines as ’sensitive’, trade sources said, a move that sparked immediate resistance from exporting countries already concerned about the extent of market access exceptions in the WTO’s troubled Doha Round of trade talks.

While lesser tariff cuts for sensitive products would have to be accompanied by expanded quotas, exporting countries have seen them as a tool that importers are likely to use to reduce the degree of market opening. Under the current draft text, developed countries would be allowed to designate up to four percent of tariff lines as ’sensitive’ - although towards the end of last year, Canada demanded an additional two percent of tariff lines, and Japan demanded as much as four percent more (see Bridges Weekly, 10 December 2008,http://ictsd.net/i/news/bridgesweekly/35976/).

In the recent consultations, the US reportedly suggested that the greater flexibility requested by Canada and Japan could be made more widely available. However, exporting countries present at the meeting underscored that, if agreed, the additional sensitive product allowance for these two countries would not be “a general option for all,” one negotiator said.

Delegates also warned that the US idea, which was reportedly floated unofficially at a small group meeting last week, would send the wrong signal at a time when negotiators are still struggling to get the talks out of first gear. The suggestion “got a negative reaction,” one official said, warning that it would be likely to provoke resistance from developing countries in particular.

Another source observed that the US suggestion on sensitive products would sit oddly with their repeated demands during the Doha Round for greater agricultural market access in the larger developing countries.

Negotiations on sensitive products have proven to be particularly tense, with lengthy discussions among around a dozen importing and exporting countries last year ultimately leading to a complex compromise proposal that has been incorporated into the draft text currently under negotiation (see Bridges Weekly, 21 May 2008,http://ictsd.net/i/news/bridgesweekly/22269/).

Consultations

While the chair of the agriculture talks convened small-group consultations on various market access issues last week (see Bridges Weekly, 14 October 2009,http://ictsd.net/i/news/bridgesweekly/56765/), negotiators reported that these had led to little real progress, with members mainly reiterating established positions. Progress remained difficult in the absence of real engagement from the US, which has yet to clarify its objectives or appoint senior personnel, one source said.

The chair, Ambassador David Walker of New Zealand, was expected to convene further consultations on negotiating issues during the week of 16 November. These are due to cover questions such as the controversial ’special safeguard mechanism’ that developing countries will be able to use to shield producers from price depressions or import surges, and the ’special products’ that these countries will be able to shield from tariff cuts on the basis of food security, livelihood security and rural development criteria.

The mid-November talks are also due to continue discussions on the data that WTO members will need to provide when formally presenting their commitments as part of an eventual Doha deal. Sources reported that talks this month in this area had been constructive, with progress on identifying the data that will have to be submitted.

Bananas: deal closer?

The EU is due to meet this Friday with Latin American banana exporters in a bid to clinch a deal, sources said. Bananas have been one of the most controversial issues in the Doha talks, with African, Caribbean and Pacific countries seeking slower and gentler liberalisation, and Latin American countries seeking accelerated and deeper cuts in tariffs.

Reportedly, the EU is eager to reach agreement ahead of the next General Council meeting, scheduled for 17-18 December. Alternatively, announcing an accord ahead of the upcoming WTO ministerial conference in Geneva, from 30 November to 2 December, could provide a still more welcome boost to the organisation’s deliberations, one source said.

However, internal differences amongst Latin American countries are believed to be further complicating the talks in this area. While some have suggested that a multilateral deal may be close, countries such as Costa Rica have rejected this assessment (see Bridges Weekly, 14 October 2009, http://ictsd.net/i/news/bridgesweekly/56765/). Sources said that other Central American countries may also be reluctant to rush to conclude an accord.

ICTSD reporting.

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