WTO news: what’s been happening in the WTO

WTO: 2005 NEWS ITEMS

28 July 2005
AGRICULTURE NEGOTIATIONS

Farm talks chairperson reports to Trade Negotiations Committee

The agriculture negotiations are stalled, but they have also clarified some of the key political trade offs that members will have sort out in the coming months, the farm talks’ chairperson, Tim Groser, told the Trade Negotiations Committee on 28 July 2005. His comments came in his end-of-July assessment, which he distributed before the meeting, and which he read out in the meeting.

Meanwhile, the new New Zealand ambassador, Crawford Falconer, was approved by the General Council in 29 July 2005 to replace Mr Groser as chairperson of the agriculture negotiations and the Cotton Sub-Committee from 1 August.

> Chairperson’s 27 June 2005 and 28 July 2005 assessments

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NOTE:
THIS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC UNDERSTAND DEVELOPMENTS IN THE WTO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS’ POSITIONS. THE OFFICIAL RECORD IS IN THE MEETING’S MINUTES

SEE ALSO:
> press releases
news archives
Supachai Panitchpakdi’s speeches


> Director-General Supachai Panitchpakdi’s report (Word format, 16 pages; 139KB)
Background explanations of many of the technical terms mentioned here
Agriculture negotiations including various texts
The “Harbinson Text” version TN/AG/10
> The “July 2004 package” page (including the 1 August framework i.e. Annex A of the decision)
Groups in the talks


Chair’s summary back to top

Overall: Chairperson Groser took as his starting point, the items that have already been acquired (the “acquis”) in the negotiations, i.e. the 2001 Doha Declaration, which is the mandate for the negotiations, and the 1 August 2004 agreed framework (Annex A of the General Council decision). (He has repeatedly stressed this to re-assure members that the importance of issue agreed in those two documents has not been reduced, even if they do not feature strongly in recent consultations or in his current assessment.)

Mr Groser also stressed that progress on agriculture has to be made on all three “pillars” (domestic support, export subsidies and other aspects of export competition, and market access), and that it can only be made step by step, with simultaneous movement on “identifiable packages of issues”.

The stalled negotiations could restart after the summer break with political decisions that would enable a successful ministerial conference in Hong Kong in December, he went on. These decisions are easier to identify now, but they are difficult, he said.

The biggest problems remain in market access, followed by some issues in domestic support, Mr Groser said. Export competition has progressed furthest, but with some outstanding issues, he reported.

Market access: The overall challenge in market access is to striking a balance between working on sets of issues that need to settled simultaneously, without making the “fatal mistake” of trying to negotiate everything at the same time, he said.

He paid tribute to the G-20 (list below) for providing an attempt at a compromise in the group’s recent comprehensive proposal on market access. He said he had used this as the starting point for his recent discussions and that members had found it to be a “constructive initiative to map out the middle ground” even though some had reservations about some of the details.

(The proposal, discussed at the recent mini-ministerial conference in Dalian, China, envisages five tiers in the tariff reduction formula, fixed percentage reductions for tariffs within each tier with higher cuts in higher tiers, maximum final tariffs (“caps”), flexibility through a limited number of designated “sensitive products”, milder treatment for developing countries, and a number of other details.)

One of the remaining differences, he said, is whether flexibility should be built into the formula (i.e. the percentage cuts in each tier would be averages with some variation allowed around each average), or whether flexibility should only be handled through designating “sensitive products” (available to all countries). This is related to the debated question of expanding tariff quotas since products given flexibility via the formula would avoid the quota expansion envisaged for “sensitive” products, he pointed out. At the same time members should bear in mind that without some “constrained flexibility” in the formula, some countries would find it more difficult to accept ambitious percentage reductions, he cautioned.

Mr Groser also warned that delays in sorting out these problems would delay progress on related sets of issues: indicators to use as criteria for developing countries to designate “special products” (available only to developing countries), “fullest liberalization” for tropical products, the treatment of countries that recently joined the WTO, and the erosion of preferences. He expressed “strong concern” that these and other issues cannot be set aside for too long, and cannot be settled with a last minute quick “fix”.
  

Domestic support: On domestic support, recent consultations have shown that two decisions are now required, Mr Groser said.

One is the tiers for reducing Amber Box support (domestic support of the kind that distorts trade the most) in the three largest subsidizers. Mr Groser declined to elaborate. Mr Groser said no more discussion is needed, only a decision.

The other required decision is on disciplines for the Blue Box (similar to the Amber Box but with some constraints aimed at reducing distortion), to reinforce the Blue Box’s objective as a half-way house to help reforming countries move away from distorting support.

Mr Groser also urged countries that heavily use Green Box supports to examine sympathetically concerns from other countries that these supports might not always meet the criteria of being at most minimally distorting. At the same time, developing countries should also be heard when they call for additional payments to be categorized as “Green”. Political impetus could help negotiators find middle ground on this, he said.
  

Export subsidies/competition: On export subsidies, Mr Groser said negotiators need swift agreement on some “building blocks” that will allow exporting state trading enterprises and food aid (which can have subsidy components) to be disciplined in parallel with pure export subsidies. Required for exporting state traders are new disciplines on “subsidies, government financing, and underwriting of losses”; on food aid, he regretted lack of progress on some issues that concern developing countries such as how to define genuine emergency food aid, as a step towards defining disciplines on commercial displacement (i.e. when food aid replaces commercial sales).
  

Cotton sub-committee: Mr Groser welcomed more focused efforts by donor countries on the development track (essentially development assistance of various kinds), but sharp price declines remain an acute concern for poor producing countries that depend on world markets, he said. On the trade side, proponent countries (the West Africans and their allies) recognize that progress is needed on the three pillars in the agriculture negotiations, he said.
  

Discussion: A long list of countries comment on the agriculture talks and the negotiations in general. Broadly they expressed disappointment in the lack of progress, but said they were determined to try to agree on full modalities by the Hong Kong Ministerial Conference. Several repeated their positions on the issues.

  
Chairmanship back to top

In the General Council on 29 July 2005, chairperson Amina Mohamed announced Ambassador Falconer as the consensus candidate to be the new chairperson of the agriculture negotiations (the Special Sessions of the Agriculture Committee) and the Cotton Sub-Committee from 1 August. She said that Mr Groser had told her he would step aside when a consensus successor is found in order to avoid “slippage” in the negotiations. Mr Groser, the previous New Zealand ambassador, has announced he is running for Parliament in his home country.

The terms of the chairs of the negotiating groups have been running from one ministerial conference to the next. The current terms expire in December at the Hong Kong Ministerial Conference. They can be renewed.

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