Topics handled by WTO committees and agreements
Issues covered by the WTO's committees and agreements

AGRICULTURE NEGOTIATIONS: BACKGROUNDER

Preparations for ‘modalities’: March 2002-July 2003

175pxls.gif (835 bytes)
UPDATED 1 DECEMBER 2004

Click the + to open an item.

 

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.


The mandate: The Doha Declaration  back to top

The Doha mandate
From the Doha Ministerial Declaration, November 2001

13. We recognize the work already undertaken in the negotiations initiated in early 2000 under Article 20 of the Agreement on Agriculture, including the large number of negotiating proposals submitted on behalf of a total of 121 members. We recall the long-term objective referred to in the Agreement to establish a fair and market-oriented trading system through a programme of fundamental reform encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets. We reconfirm our commitment to this programme. Building on the work carried out to date and without prejudging the outcome of the negotiations we commit ourselves to comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support. We agree that special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development. We take note of the non-trade concerns reflected in the negotiating proposals submitted by Members and confirm that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture.

14. Modalities for the further commitments, including provisions for special and differential treatment, shall be established no later than 31 March 2003. Participants shall submit their comprehensive draft Schedules based on these modalities no later than the date of the Fifth Session of the Ministerial Conference. The negotiations, including with respect to rules and disciplines and related legal texts, shall be concluded as part and at the date of conclusion of the negotiating agenda as a whole.
  

In November 2001, the fourth WTO Ministerial Conference was held in Doha, Qatar. The declaration issued on 14 November launched new negotiations on a range of subjects, and included the negotiations already underway in agriculture (and services).

The declaration (see box) builds on the work already undertaken in the agriculture negotiations, confirms and elaborates the objectives, and sets a timetable. Agriculture is now part of the single undertaking in which all the linked negotiations are to end by 1 January 2005 (except some “early harvest” subjects which have earlier deadlines).

The declaration reconfirms the long-term objective already agreed in Article 20: to establish a fair and market-oriented trading system through a programme of fundamental reform. The programme encompasses strengthened rules, and specific commitments on government support and protection for agriculture. The purpose is to correct and prevent restrictions and distortions in world agricultural markets.

Without prejudging the outcome, member governments commit themselves to comprehensive negotiations aimed at:

  • market access: substantial reductions
  • exports subsidies: reductions of, with a view to phasing out, all forms of these
  • domestic support: substantial reductions for supports that distort trade

The declaration makes special and differential treatment for developing countries integral throughout the negotiations, both in countries’ new commitments and in any relevant new or revised rules and disciplines. It says the outcome should be effective in practice and should enable developing countries to meet their needs, in particular in food security and rural development. The ministers also take note of the non-trade concerns (such as environmental protection, food security, rural development, etc) reflected in the negotiating proposals already submitted. They confirm that the negotiations will take these into account, as provided for in the Agriculture Agreement.

 

Key dates in the declaration  back to top

  • Formulas and other “modalities” for countries’ commitments: by 31 March 2003
  • Countries’ comprehensive draft commitments: by 5th Ministerial Conference, 10-14 September 2003 (in Canc˙n, Mexico)
  • Stock taking: 5th Ministerial Conference, 10-14 September 2003 (in Canc˙n, Mexico)
  • Deadline: by 1 January 2005, part of single undertaking.

 

‘Modalities’  back to top

Originally a 12-month programme, this phase deals with one of the most critical stages of the agriculture negotiations. It aims to set “modalities” or targets (including numerical targets) for achieving the objectives set out in the Doha Ministerial Declaration: “substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support”. It will also include some rule making. This stage will therefore determine the shape of the negotiations’ final outcome.

The “modalities” will be used for members to produce their first offers or “comprehensive draft commitments”. The Doha Ministerial Declaration said this had to be done by the Fifth Ministerial Conference in Canc˙n, Mexico, 10-14 September 2003, a few months after the 31 March 2003 deadline for modalities.

As it turned out, members failed to meet the March 2003 deadline for agreeing “modalities” and then turned their attention to an outline or “framework” of the modalities, which was eventually agreed on 1 August 2004. The periods involved can therefore be described as: “preparations for modalities” (March 2002-July 2003), “Cancún and the framework phase” (August 2003-August 2004), and “the modalities phase” (September 2004- ).

(As an indication of the process needed even to arrive at a work schedule, the programme for preparing the “modalities” was agreed after a series of consultations that produced the necessary consensus backing. Four informal consultations open to all WTO members were held to report on smaller group discussions and to hear comments before a consensus compromise was struck. One of the constraints was the need to avoid a schedule that clashed with other meetings — including negotiations in other subjects — in a busy year.)

 

Pillar by pillar  back to top

The preparations for “modalities” began with technical work on detailed possibilities for each of the three main areas (or “pillars”) of the Agriculture Agreement: export subsidies/competition; market access; and domestic support. Special treatment for developing countries is treated as an integral part of all of these, and non-trade concerns are taken into account.

The first set of meetings covered the export side: subsidies, competition, taxes, and restrictions. These were “intersessional” informal meetings (3-4 June 2002), informal “special sessions” (17-18 June 2002), and a formal “special session” (20 June 2002). Then came market access with “intersessional” informal meetings (29-30 July 2002), informal “special sessions” (2-3 September 2002), a formal “special session” (6 September 2002). This was followed by domestic support with “intersessional” informal meetings (4-5 September 2002), informal “special sessions” (23-25 September 2002), and formal “special session” (27 September 2002).

Chairperson Stuart Harbinson said the discussion on all three pillars in these meetings added to the depth of knowledge and understanding of the various positions. But he noted that delegations tended to repeat existing “maximal” positions in key areas, in some cases with “a continuing lack of specificity” (a reference, for example, to the lack of figures in some proposals). This, he said, is “not particularly helpful from the point of view of drafting the ‘overview paper’ towards the end of the year.” But, he added, the negotiators still have a bit more time, including stock-taking meetings scheduled for November.

“The time has now come to change gear,” he said. “We have prepared assiduously over the last two and a half years. The clock is now running fast and the critical period is upon us. We do not have much time in hand if we are to meet the deadlines of 18 December for the ‘Overview Paper’ and 31 March for establishing modalities.

“In the process we must also change our mindset. We need a more creative approach in which participants start looking actively for compromises and for ways to bridge gaps.”

Common ground exists, he said, but in critical areas much more flexibility is needed. “I therefore, urge you all to reflect deeply and urgently on what your delegation can contribute in order to bring this exercise to a conclusion acceptable to all by the end of next March.”

He had expressed these sentiments at previous meetings and he would repeat them again. But members could not respond to the call. By the November stock-taking meeting some had not supplied proposed figures for reducing export subsidies, domestic support and tariffs. One of the biggest participants did not do so until January — after the chairperson had circulated his overview paper.

 

Three key papers  back to top

The ideas developed in the preparations for “modalities”, and those proposed earlier, were compiled in an overview document (TN/AG/6), which the negotiations chairperson, Stuart Harbinson, circulated to members on 18 December 2002. This document is around 90 pages long — a comprehensive listing of positions on all the issues.

As members continued to show no sign of movement towards any middle ground, the responsibility for trying to meet the deadlines remained with the chairperson. After hearing negotiators’ comments in informal and formal meetings, he produced his first attempt at a compromise: the “First Draft of Modalities for the Further Commitments” (TN/AG/W/1) circulated to members on 12 February 2003 and released to the public five days later. The draft focused the negotiations on bridging differences — the search for the compromises that are necessary for a final agreement. So far, delegations had concentrated on spelling out what they wanted rather than on narrowing the gaps between them.

Further comments in negotiations meetings led to a revised draft circulated on 18 March 2003 (TN/AG/W/1/Rev.1), later called unofficially the “Harbinson text” and re-circulated with some revised attachments in a report to the General Council (TN/AG/10, 7 July 2003, and TN/AG/10/Corr.1, 13 October 2003). The chairperson described it as “an initial, limited revision of certain elements of the first draft of modalities”, and not a second draft. “Overall, while a number of useful suggestions emerged, positions in key areas remained far apart. In the circumstances, there was insufficient collective guidance to enable the chairman, at this juncture and in those areas, significantly to modify the first draft as submitted on 17 February 2003,” he explained.

The 31 March deadline came and went, but positions remained wide apart and there was no consensus on the draft or on how to modify it. Some countries, notably some of those seeking more moderate reforms, said they could not accept it as basis for negotiation unless it were altered.

 

After the missed deadline  back to top

The negotiators’ failure to produce the modalities was not for lack of trying. In the three years before the end of March 2003, the commitment to negotiate was unprecedented, not least judging by the number and range of countries involved. And, despite the missed deadline, negotiators continued to work hard at a more technical level, where some progress was possible. What was missing was a political direction from member governments, that would allow some movement towards compromise on the major issues.

In the 31 March negotiations meeting, chairperson Harbinson told delegations that the failure to meet the deadline was “certainly a setback. We must all be disappointed that all our efforts have not come to fruition.”

He added: “I get a strong sense from all sides of a continuing commitment to the Doha mandate. I have also been told by many delegates that they are committed to continue working on the issues before us. We should not gloss over the difficulties, but we must also look to the future.”

He concluded: “The task ahead and our common responsibility is simple and clear — we must continue working together towards completing the job given to us by ministers in Doha as soon as possible.”

After the missed 31 March 2003 deadline, negotiators busied themselves sorting out a number of important and complex technical issues that are a necessary part of the package. Among them are: the domestic support categories (various “boxes”), tariffs, tariff quotas (including their administration), export credits, food aid, various provisions for developing countries, provisions for countries that recently joined the WTO, trade preferences, how to measure domestic consumption (a proposed reference for several provisions), and so on.

But the negotiators lacked their governments’ decisions at a political level, which would start the long-awaited move towards a consensus on the main questions. At a negotiating session at the end of June 2003, chairperson Harbinson reminded delegations that they should negotiate with each other, not with the chair.

In a 7 July 2003 report to the Trade Negotiations Committee (TN/AG/10, dated 7 July 2003, and TN/AG/10/Corr.1, 13 October 2003) he said that the 11 technical consultations held from April to mid-June had achieved “worthwhile further progress [...] in a number of the rule-related areas.”

He went on: “However, the same could not be said with respect to core issues regarding the modalities for the further commitments, notwithstanding repeated appeals by the chairman for all delegations to work on and come forward with solutions that might contribute to the development of a basis for compromise. In these circumstances, achieving the objective of establishing modalities as soon as possible has continued to remain elusive. [...] Clearly, any modalities established must faithfully reflect the Doha mandate. As matters stand, collective guidance and decisions are required on a number of key issues in order to clear the way for reaching this goal.”

As the September 2003 Cancún Ministerial Conference approached, members started looking for practical ways to resolve outstanding key issues so that modalities could be produced.



previous page    next page


Want to download and print this backgrounder?
Download here