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

AGRICULTURE NEGOTIATIONS: BACKGROUNDER
Update Phase 2: Development and related issues

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UPDATED 10 OCTOBER 2002

Contents
> In a nutshell
Proposals received in Phase 1
Proposals received in Phase 2
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
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
Environment
Trade preferences
Food aid
Consumer information and labelling
Sectoral initiatives
> Development box, single commodity producers, small island developing states, special and differential treatment
Additional issues (food aid, the Green Box, tariff quota expansion)
Modalities 2002–2003
Exports
Market access
Domestic support


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.


Development Box, single commodity producers, small island developing states, special and differential treatment

See also Phase 1. These four closely-related subjects were discussed in the final informal meeting of Phase 2 (with some further comment on the record in the formal meeting). A number of comments under these headings were similar, with some differences, depending on the specific proposals contained in the non-papers. The relationship between the development box and special and differential treatment (S&D) was mentioned: e.g. one delegation described the development box as a subset of S&D, another said it is an “operational extension” of S&D.

Broadly speaking, the debate was about how to treat developing countries’ problems in the negotiations’ outcome. Two or three strands featured in the discussion:

  • Market orientation v. protection: whether special protection and support (for example exempting certain products from all commitments) should be allowed for developing countries to address their particular situations, or whether liberalization with some flexibility is more effective
  • Unique v. shared concerns for developing and developed countries: whether issues such as food security and rural development should be handled uniquely for developing countries, or whether others such as transition economies and developed countries should also be covered
  • Unique v. shared weaknesses among developing countries: whether provisions should apply generally to all developing countries, or whether specific groups of developing countries need extra provisions. Underlying this discussion is the question of whether a liberal trade regime would favour some developing countries with inherent advantages in agriculture, or whether other developing countries would be hurt by more liberal trade.

    The debate developed into a discussion about whether the “enabling clause” might be revised. (The enabling clause is officially the “Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries”. It was adopted under GATT in 1979 and enables developed members to give differential and more favorable treatment to developing countries. Although it allows flexibility, including additional special treatment for least developed countries, the clause interpreted to require preferential treatment to be generally available to all developing countries.)      > more on enabling clause

    In the formal meeting, some developing countries (Malaysia, Paraguay) said they oppose reopening the enabling clause and stressed that special and differential treatment should be available equally to all developing countries. Some others (Mauritius, Grenada) said that all subjects should be open for negotiation and members should not prejudge the result.

 
Development Box
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One proposal envisages provisions that would only apply to developing countries, and would consist of broad flexibilities rather than specific prescribed policies. The emphasis is on targeting low-income farmers lacking resources, and on secure supplies of staple foods. The means would be: exemptions from commitments on these staples, the possibility of negotiating higher tariffs, allowing developing countries to use simple safeguards to protect staples, a ban on developed countries “dumping” agricultural products, an international food security fund, and so on. Another agrees with the idea of flexibilities for developing countries, but raises questions about how these would be handled.

All who spoke accept the need for special treatment for developing countries. A number of developing countries add their own ideas for the development box’s contents, including better market access to developed countries’ markets and binding commitments on technical assistance. However, views differ on what groups of countries should qualify for what kind of special treatment.

A lot of other developing countries (from several groupings) oppose this proposal. They say it would harm trade between developing countries, which should be encouraged instead. They also say some of the ideas were in the opposite direction set in the Doha Ministerial Declaration — the objective of achieving a more market oriented agriculture trading system through reductions in support and protection applies to all WTO Members.      > more

Many countries oppose the idea of different sets of rules for developed and developing countries. They caution against adopting policies that increase trade distortion. Some also argue that instead of raising tariffs, developing countries should target low-priced subsidized exports through countervailing duty. Some countries say concerns such as food security and rural development apply to them as well. Many developing countries oppose extending development box provisions, such as those dealing with food security, to developed countries.

Papers or “non-papers” from: 9 developing countries (Cuba, Dominican Rep, El Salvador, Honduras, Kenya, Nigeria, Pakistan, Sri Lanka and Zimbabwe), Switzerland, Mauritius, and Japan.

 
Single commodity producers
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The proposal under this heading envisages special treatment for these countries and technical assistance to help them diversify. Among the specific ideas: transparency in the operations of multinational corporations, similar to those applying to state trading enterprises; improved market access (including removal of tariff peaks, tariff escalation and non-tariff barriers); price stabilization schemes; access to technology; diversification and capacity building.

Many developing countries support these points. Others pick points they agree with such as getting rid of tariff peaks and escalation. Some argue that dependency on single commodities can be the result of trade preferences in developed country markets. Some argue that the question of multinational corporations is a good reason for having negotiations on competition policy. Some also point out that commodity agreements designed to stabilize prices have failed.

The discussion includes the question of domestic reform. Some developing countries say they no longer rely on a small number of commodities because they have successfully diversified into other agricultural products and into other economic sectors such as tourism and manufacturing. They say domestic reform is often needed for any country to make use of new trade opportunities. Some others say diversification is not always possible.

Papers or “non-papers” from: African Group, Japan, and Mauritius.


Small island developing states
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The proposals under this heading seek special treatment for small island developing states because these countries suffer from remoteness, vulnerability to natural hazards, lack of resources and lack of economies of scale. Among the detailed points are: continued trade preferences and numerous derogations or exemptions from commitments.

Many other countries sympathize with the problems these countries face. Some add that the Doha Development Agenda includes work on small economies. Several caution against having too many categories of countries. Again the debate hinges on whether additional protection and support is the best solution, or whether it should be increased technical assistance and help to integrate into a more market-oriented world economy.

And again, the discussion includes the question of whether diversification is always possible with domestic reform.

Paper or “non-paper” from: 9 countries (Dominica, Fiji, Jamaica, Madagascar, Mauritius, Papua New Guinea, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago), Japan, and Mauritius

 
Special and differential treatment
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This debate is similar to the one on the development box, with the added dimension of two papers on programmes to grow crops as substitutes for illicit narcotics. Again, the debate hinges on whether protection and support is needed or whether market orientation (and the reduction of protection and support in developed countries) is the solution; and on whether some proposals might affect trade among developing countries.

Among the specific proposals are: better access to export markets; protecting domestic markets for some products by re-evaluating current tariff bindings; and flexibility to support and encourage domestic production. Some developing countries want to be able to use special safeguard in response to import surges. Others advocate using countervailing duty instead, to react to imports of subsidized products.

Many countries note that special and differential treatment has a high priority in the Doha Development Agenda and is an integral part of the negotiations. Some note that the Ministerial Declaration sets special and differential treatment within the overall objective of achieving a fair and market orientated agricultural trading system, meaning that all members would have to participate in reform. Special and differential treatment would be reflected in flexibilities.

Papers or “non-papers” from: Colombia, a group of developing countries (African Group, Cuba, Dominican Rep, El Salvador, Honduras, Kenya, Pakistan and Sri Lanka), India, Bolivia, Mauritius, and CARICOM

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The second phase consists of detailed discussions on the many issues raised in the first phase, organized topic by topic. The meetings are largely “informal”, meaning that there is no official record except for chairperson’s summaries presented at the formal meetings. Papers presented so far have not been official WTO documents. Despite the increased complexity, developing countries continue to participate actively.