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.

> See details and Phase 1, Phase 2

During the discussion, new members and transition economies repeatedly argued for special and differential treatment for countries in their position, because of the state of their economies and because the new members are still implementing market-access commitments under their membership agreements.

Again, some important players have not proposed specific numbers, and this has led to criticism from others.

 
Tariffs   >  Back to top

What kind of formula for reductions?

• “Swiss formula” or similar, which would produce much steeper cuts on higher tariffs. Two proposals from several countries would leave a maximum tariff of 25% after five years. Critics say this would be too ambitious, requiring too much adjustment, and some say it would be inequitable because countries with lower tariffs would not have to do much. Some also argued that a Swiss formula would be too complicated because it would require converting specific tariffs into ad valorem tariffs (see below). Some other variants of a non-linear approach were also proposed.
  
  (The Swiss formula was first proposed by Switzerland in the Tokyo Round negotiations in the 1970s, and was for negotiations on industrial tariffs. Switzerland does not support this approach in the current agriculture negotiations.)
   
• “Uruguay Round approach”, which is “linear”, i.e. the same percentage reductions no matter what the starting tariff rate is. Variations are allowed for specific products so long as a simple average across all products meets the target. The rate would be negotiated along with reduction rates for export subsidies and domestic support, and other issues, proponents said.

Both include special and differential treatment for developing countries. (Uruguay prefers the Swiss formula, Switzerland prefers the Uruguay Round approach!)

Ad valorem (percentage of price) or specific (dollars per ton, etc) tariff rates?

A number of countries criticize specific tariffs as being untransparent and for providing increased protection when prices fall. They want to get rid of all or most specific tariffs. Others say specific tariffs have advantages (for example, traders know what they are going to pay without having to refer to prices), and converting them to ad valorem tariffs would be too complicated.

Exempting certain products: several developing countries say they should be exempt reduction commitments on staples, for food security.

 
Tariff quotas   >  Back to top

Volumes: Most want quotas to expand. Some say the final objective must be tariffs only. Some countries propose expanding quotas according to levels of domestic consumption, arguing that this would be more meaningful. Others say it would be simpler to expand from final bound import volumes under the tariff quotas. Some want some quotas to be recalculated to reflect more up-to-date levels of domestic consumption. Others oppose anything that would allow quotas to be reduced in size.

In-quota tariffs: Some want these to go to zero. Some others say keeping in-quota tariffs above zero will help narrow the gap between in- and out-of-quota rates, and ultimately bringing a tariff-only system. Another group opposes zero in-quota tariffs in general, except in preferences for least-developed countries.

Quota administration: Some members want to set principles: administration methods should be practical, predictable, transparent; they should allow trade to take place on a commercial basis; they should encourage full use of quotas; unused import licenses should be reallocated; allocations to specified countries should be phased out; imports from non-WTO members should be excluded from WTO quotas; etc. They also want auctioning outlawed because it means money going to governments, possibly exceeding their tariff bindings.

Others defend auctioning as transparent and efficient. Some would prefer an indicative list of methods that can be used, and some among these want the negotiations to clarify whether auctioning complies with WTO rules, so that governments can use these methods with confidence. Some argue that a range of allocation methods should be available to members for use in different circumstances. Some defend auctioning as transparent and efficient.

 
Special safeguards (SSGs)   >  Back to top

Many developing countries want to be able to use special safeguards or something similar. Currently these safeguards are only available to countries that “tariffied” in the Uruguay Round, and on the products they tariffied. Few developing countries did this. There is some sympathy for this call. One group of countries proposes simplifying the methods of charging duties to “countervail” export subsidies on imported products.

Some countries are proposing a new safeguard for perishable and seasonal products. Others oppose this.

 
Importing state trading enterprises   >  Back to top

Among the key issues is the question of whether tariff quotas could be allocated to state trading enterprises. Some say the monopoly power and state ownership can allow the enterprises to disrupt market access through the quotas and want this outlawed. Others disagree.

There is broad support for improving transparency when state enterprises handle quotas.

 
Other market access issues   >  Back to top

Food safety: Advocates of including this in the negotiations say members should not rely on dispute rulings, but use the negotiations to clarify essential elements, taking Appellate Body and dispute panel reports into account. In particular: measures should be proportionate to the food safety target; they should not discriminate; they should be applied consistently; costs and benefits of alternative measures should be compared; scientific data should be re-evaluated as new information emerges; measures should be based on science. Others counter that this is an Sanitary and Phytosanitary Measures (SPS) issue and not one for the agriculture negotiations. Some complain that in general, SPS measures are already replacing tariffs as unwelcome trade barriers.

Mandatory labelling: Advocates say this is needed to provide information for consumers, and to cover such issues as production methods and traceability. Others say labelling is a technical barriers to trade (TBT) issue, not agriculture.

Geographical indications: Some countries are calling for the higher level of protection currently given to geographical indications of wines and spirits to be extended to other products. They want this to be negotiated in the agriculture talks. Some others also seeking the extension say they would be content to leave the subject in the intellectual property (TRIPS) Council so long as progress is made there. Others oppose the extension.

 
Chairperson’s summary   >  Back to top

At the formal meeting on 6 September 2002, chairperson Stuart Harbinson concluded:

“It was clear during our discussions, and I hope even more clear from my summary, that a lot of work was done. Many specific proposals were made and we had a very useful debate on the pros and cons.

“In this regard as I consider the possible shape of the overview paper which I must produce in the not too distant future, I have to say I am concerned about the lack of specificity in some areas.

“It is clear that in the coming weeks and months we need to intensify our efforts here in general, in capitals and also between delegations. I would also wish to mildly discourage you, at this late stage, from working in isolation. By now all of us should be able to understand the positions of others and begin working towards refining our positions and narrowing our differences.”

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