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WTO: 2006 NEWS ITEMS

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
  

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> New Secretariat papers (Oct 06) :
> Members’ participation in the normal growth of world trade in agricultural products
> Implementation … possible negative effects … on least-developed and net-food importing developing countries

  
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Chairperson Christian Häberli expressed his deep concern that several major agricultural trading members have not supplied important information for several years, particularly on their domestic support, information which is needed for use in the negotiations. He said this “creates an additional imbalance between delegations with substantial human resources available to seek information from other sources, and the small delegations that simply lack the means to obtain the information”.

The negotiations were raised again briefly when the World Bank commented on how best to secure food supplies to the world’s poor. This followed a warning from the FAO about the rising cost of food imports. The World Bank said part of the solution lies in liberalization, which could be undermined if the negotiations lead to too much flexibility through “sensitive products” and “special products” categories. The Philippines and Cuba objected and said they would raise the issue again at a future meeting after they have examined the statement.

Also discussed at some length was the EU’s future alterations to its commitments as it expands further to reach 25 and then 27 states. Australia said the EU should not assume that the domestic support and export subsidy reduction commitments (officially, “schedules”) can be submitted unilaterally without negotiations with other WTO members.

These are some details of the discussions:

Notifications and review, and related questions  back to top

1. Failures to notify

Data compiled up to the previous day (30 October) and circulated in the meeting show that 70 members — almost half of the membership — still have not supplied some or all of the required information for 1995-2000 on their export subsidies, domestic support and market access measures (including tariff quotas and special safeguards). Major players in the negotiations — e.g. Argentina, Canada, the EU, Rep. of Korea, Norway, Switzerland and the US — have not notified domestic support since 2001, and Japan not since 2002.

Transparency, through “notification and review”, is a core function of the committee, which is responsible for implementing the WTO’s Agriculture Agreement. Chairperson Häberli said the lack of up-to-date information causes two problems:

• difficulty in meeting the committee’s transparency objectives, which may lead to an imbalance in rights and obligations between those who notify and those who do not
  
  
• imbalance between members in the negotiations and a need for negotiators to base their calculations on information outside the WTO, which could be less reliable and is not available equally to all members. He urged members to consider this a priority task that is their own responsibility, and suggested they use staff who have been “freed up” by the negotiations’ suspension

A comment that has been made in the negotiations is that without up-to-date information on domestic support, members cannot accurately calculate what the effect of proposed cuts would be on actual current payments as well as from ceilings that are legally committed (or “bound”) in the WTO.

Australia and Brazil said they agreed wholeheartedly with the chairperson’s strong words. Brazil said it understands the difficulty in compiling the information but since developing countries like Brazil have managed to keep up to date, developed countries should be able to do so as well.

The EU said it is about to submit domestic support notifications for 2002 (in the EU’s terms, 2002/03) and 2003 (i.e. 2003/04), the delay partly caused by adjusting calculations to include the expansion from 15 to 25 members. Canada also said it is preparing its notifications.

2. The enlarging EU’s commitments

This was one among about 25 questions or sets of questions asked in the “notification and review” part of the agenda, and one that has broader implications for the WTO system as a whole. Australia said the question remains unresolved on how to adapt the EU’s export subsidy commitments for its enlargement to 25 members (“EU-25”) and the EU has not tabled draft schedules of commitments for this and for domestic support. Australia asked how the EU proposes to handle the further expansion to include Bulgaria and Romania.

The EU said it will notify the “EU-25” commitments using methods it claims to have agreed with Australia and others. Australia replied that the methodology and figures must be shared with members. It does not consider this to be a unilateral right — the schedules of domestic support and export subsidy reduction commitments have to be negotiated and agreed, Australia said. The US and Canada shared Australia’s concerns.

3. Other issues

Among the other “notification and review” topics raised were (details will be available when the minutes are issued; the relevant notifications can be found from links to searches for documents):

• EU subsidized wheat exports, which are forecast to increase — the EU replied to Australia that it will remain within its export subsidy commitments
• whether New Zealand will notify its “dairy entity” as a state trading enterprise — New Zealand told the EU that this question did not fall within the purview of the Agriculture Committee and added that it will refer the EU’s supplementary questions on Fonterra’s status to its capital (Fonterra is a trading company that replaced the New Zealand Dairy Board)
• Canadian excise duty — the EU said this discriminates against imported agricultural products, Canada said it has referred these recently-received questions to its capital
• Canada’s method of calculating its domestic support — the US said it remains concerned about various aspects of these; Canada defended its practices
• the EU’s forthcoming wine reforms — the US said it continues to be concerned about whether these are correctly categorized as “Green Box” domestic supports (non-distorting and therefore unlimited). The EU said the reform is still being considered, but the resulting Green Box measures will comply with the Agriculture Agreement.
• Colombia’s notifications — Australia advised Colombia to make some changes, such as removing data on forestry programmes (which are not covered by the Agriculture Agreement) and Colombia gratefully agreed

Net food-importing developing and least developed countries back to top

Under this annual monitoring exercise, the UN Food and Agriculture Organization (FAO) warned that strengthening world prices, caused by tight supply and increasing demand, could raise food import bills by 7% in 2006 for least-developed countries and for “low income food deficit countries” (an FAO category), and by almost 5% for net food-importing developing countries. Globally, the food import bill could rise by 2% for all countries and by 3.5% for all developing countries, the FAO said, indicating that the poorest countries will be the hardest hit.

The World Bank said: “Agricultural trade liberalization in particular can reduce poverty, not only by spurring growth, but by keeping the price of food staples of the poor at affordable levels.” Outlining its projects to help developing countries deal with income shocks, for example weather insurance, the Bank said improved efficiency and openness in global and regional food trade are important.

Citing its research, the Bank stressed “the importance of liberalizing reforms in agricultural trade on the part of both developing and industrialized countries, and the potential for the concepts of sensitive and special products to create significant exemptions, which would undermine this objective”.

It was this statement that triggered comment from the Philippines and Cuba, who said they would examine the statement and raise the subject at a future meeting.

In the WTO’s agriculture negotiations, “sensitive products” would be available to all members and “special products” would be available to developing countries. The negotiations on these focus on how many products and how they would be selected, and whether they would be totally or partially exempt from tariff reductions.

Chairperson: Mr Christian HÄBERLI (Switzerland)

Next meeting  back to top

Regular committee meetings in 2007 (subject to change):

• Wednesday—Thursday 28–29 March
• (Possibly Monday—Tuesday 21–22 June)
• Wednesday—Thursday 26–27 September
• Wednesday—Thursday 21–22 November

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