UPDATED 2 OCTOBER 2001
Contents
> In a nutshell
> Proposals received in Phase 1
> Alliances table
> INTRODUCTION
Phase 1
> Export subsidies, competition and restrictions
> Market access
> Domestic support: amber, blue and green boxes
> Developing countries
> Transition economies
> Non-trade concerns and ‘multifunctionality’
> Animal welfare and food quality
> The peace clause
Phase 2
> tariffs and quotas
> domestic support: amber, blue and green boxes
> export subsidies and restrictions
> state trading
> food security
> food safety
> rural development
> geographical indications
> safeguards
Data
> Statistics

This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.

Notes: Least-developed countries do not have to reduce tariffs or subsidies. The base level for tariff cuts was the bound rate before 1 January 1995; or, for unbound tariffs, the actual rate charged in September 1986 when the Uruguay Round began.

Only the figures for cutting export subsidies appear in the agreement. The other figures were targets used to calculate countries’ legally binding “schedules” of commitments. Each country’s specific commitments vary according to the outcome of negotiations. As a result of those negotiations, several developing countries chose to set fixed bound tariff ceilings that do not decline over the years.

 
The present reform programme  back to top

Agriculture trade is now firmly within the multilateral trading system. The WTO Agriculture Agreement, together with individual countries’ commitments to reduce export subsidies, domestic support and import duties on agricultural products were a significant first step towards reforming agricultural trade.

The reform programme aims to strike a balance between agricultural trade liberalization and governments’ desire to pursue legitimate agricultural policy goals, including non-trade concerns.

The reform brought all agricultural products (as listed in the agreement) under more effective multilateral disciplines, including “tariff bindings” — WTO members have bound themselves to maximum tariffs on nearly all agricultural products, while many industrial tariffs remain unbound.

For the first time, member governments are committed to reducing agricultural export subsidies and trade-distorting domestic support. They have also agreed to prohibit some of the subsidies and support. The commitments to reduce domestic support are a major innovation and are unique to the agricultural sector.

The Uruguay Round agreement set up a framework of rules and started reductions in protection and trade-distorting support. But this was only the first phase of the reform programme. Article 20 of the Agriculture Agreement committed members to start negotiations on continuing the reform at the end of 1999 (or beginning of 2000). Those negotiations are now well underway, using Article 20 as their basis.

 
 
Negotiations: second phase began in March 2001  back to top

The negotiations are now in their second phase. The first phase began in early 2000 and ended with a stock-taking meeting on 26–27 March 2001. Altogether, 126 member governments (89% of the 142 members) submitted 45 proposals and three technical documents. Six negotiating meetings (officially called “Special Sessions” of the Agriculture Committee) were held: in March, June, September and November 2000, and February and March 2001. 
In the second phase, the meetings are largely “informal”, with a record of proceedings taking the form of a summary report by the chairperson to formal meetings (i.e. formal “Special Sessions”). The work programme decided at the March 2001 stock-taking meeting set a timetable of six informal meetings in May, July, September and December 2001, and February and March 2002. The September and December 2001 and March 2002 sessions are also followed by formal meetings. The first phase consisted of countries submitting proposals containing their starting positions for the negotiations. The meetings discussed each of these proposal in turn. In the second phase, the discussions are by topic, and include more technical details, which is needed in order to find a way to allow members to develop specific proposals and ultimately reach a consensus agreement on changes to rules and commitments in agriculture.

The first three informal meetings of Phase 2 (in May, June and September 2001) covered: tariff quota administration; tariffs; “amber”, “green” and “blue box” domestic supports; export subsidies; export credits; state trading enterprises and single-desk traders; export taxes and restrictions; food security; food safety; rural development; geographical indications; and the special agricultural safeguard. Among the topics to be discussed in future meetings are: environment; trade preferences; food aid; consumer information and labelling; and sectoral initiatives. These are explained below.

The proposals received in the first phase covered all major areas of the agriculture negotiations and a few new ones. Many proposals (e.g. from the US, EU, Japan, Switzerland, Mauritius, etc) were “comprehensive”, i.e. they covered a full range of subjects for negotiation. Some other proposals dealt with specific subjects (e.g. each Cairns Group proposal dealt with a different area).

Although the views expressed in the papers and during the Phase 1 meetings were very wide, this was not surprising at that early stage. The second phase is more complicated. Members are now discussing specific issues in greater depth. Subsequent phases will also be more difficult because narrowing the gaps between positions and reaching a final agreement will also require tough political compromises.

To assist the negotiations, the Secretariat has so far produced 22 background papers at the request of members. Most of these can be found in the G/AG/NG/S series of official documents (you can download them here).

 
 
The mandate: Article 20  back to top

The negotiations are being conducted under Article 20 of the Agriculture Agreement (see box). This says WTO members have to negotiate to continue the reform of agricultural trade.

The direction of the reform is clearly set out in the article — “substantial progressive reductions in support and protection resulting in fundamental reform”.

The negotiations are difficult because of the wide range of views and interests among member governments. They aim to contribute to further liberalization of agricultural trade. This will benefit those countries which can compete on quality and price rather than on the size of their subsidies. That is particularly the case for many developing countries whose economies depend on an increasingly diverse range of primary and processed agricultural products, exported to an increasing variety of markets, including to other developing countries.

The following issues are among those that have been raised in the negotiations.

 
 
The objective: continuing reductions and other issues  back to top

Further substantial reductions in tariffs, domestic support and export subsidies can be expected to be the main focus of the negotiations. In addition, some countries say an important objective of the new negotiations should be to bring agricultural trade under the same rules and disciplines as trade in other goods. Some others, reject the idea for a number of reasons (for example, see “non-trade concerns and multifunctionality”).

This is sometimes translated into conceptual differences, reflecting the importance that members attach to the major issues in the negotiations. Some countries have described the mandate given by Article 20 as a “tripod” whose three legs are export subsidies, domestic support, and market access. Non-trade concerns and special and differential treatment for developing countries would be taken into account as appropriate. Others say it is a “pentangle” whose five sides also include non-trade concerns and special and differential treatment for developing countries as separate issues in their own right. So far, these differences of approach have not delayed the discussions.

 
 
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