JULY 2008 PACKAGE: BRIEFING NOTES

Agriculture

The negotiations aim to reform agricultural trade principally in three areas: market access, domestic support and export subsidies. The modalities spell out how to achieve this.


Other briefing notes:
Director-General's letter to journalists
> Agriculture
Non-agricultural market access (NAMA)
Services
Rules
Intellectual property
Other Doha issues
Aid for Trade
Jargon buster
Country groupings

 

See also:
Agriculture negotiations
Doha declaration
Doha declaration explained


What does this mean for... ?

Market access: tariffs, tariff quotas and safeguards

For wheat, rice, beef, sugar, cheese, potatoes, pineapples, etc - how deep the cuts on tariffs would be for these depends on:

  • how high the current tariff is: higher tariffs have higher cuts, ranging from 50% to 66-73% subject to a 54% minimum average for developed countries, 33.3% to 44-48% for developing
      
  • whether the product is "sensitive" (all countries) or "special" (developing): sensitive products would have cuts of only 1/3, 1/2 or 2/3 of the normal cut but with a quantity allowed in at a lower quota; special products would also have smaller cuts, and some might be exempt completely
      
  • whether the applied tariffs are lower than the bound tariffs. Cuts are made from legally bound rates. Tariffs actually charged can be lower. If a developing country has a bound tariff of 100% but only charges 25%, the bound tariff would be cut by 42.7% ie, cut to 57.3%. That means no change in the 25% tariff actually charged, with room to more than double the tariff.
      
  • the country's status: least-developed countries would make no cuts on any products, developing countries in general would make smaller cuts and have more flexibilities than developed, small and vulnerable economies would make even smaller cuts with even more flexibilities, and countries that recently joined the WTO would also have special terms.

 

Support for farmers and for agriculture

Support for prices, or for earnings according to how much is produced or sold, would be substantially cut but not eliminated. Countries providing large amounts of support would cut these the most, many are already reforming their programmes. They and the rest would still be allowed a conceptually small or "de minimis" amount limited to 2.5% of the value of production for developed countries, 6.7% for developing. This amount of support for individual products would also be limited to avoid concentration.

But a wide range of support for agriculture as a whole would be allowed without limit under the "Green Box", considered non-trade distorting, i.e., for development, infrastructure, research, agricultural extension, structural adjustment, etc. Conditions would be tightened to prevent direct income supports, etc, from stimulating production.

 

Export subsidies

These would be eliminated by 2013, including subsidies hidden in export credit, disciplines on state trading enterprises and non-emergency food aid.

 

Latest draft text back to top

The latest draft was circulated on 10 July 2008. Its 116 pages are summarized below.

HIGHLIGHTS OF THE 10 JULY 2008 DRAFT

Numbers in the draft tend to be in square brackets (ie, they are still to be negotiated) and in some cases the text offers ranges or alternatives. Terms used here and more details are explained in the longer summary.

DOMESTIC SUPPORT

(Explanation of the "boxes")

  • Overall trade distorting domestic support (Amber + de minimis + Blue). EU to cut by 75% or 85%; US/Japan to cut by 66% or 73%; the rest to cut by 50% or 60%. "Downpayment" (immediate cut) of 33% for US, EU, Japan, 25% for the rest. Bigger cuts from some other developed countries whose overall support is a larger % of production value. Cuts made over 5 years (developed countries) or 8 years (developing).
      
  • Amber Box (AMS). Overall, EU to cut by 70%; US/Japan to cut by 60%; the rest to cut by 45%. Bigger cuts from some other developed countries whose AMS is larger % of production value. Also has downpayment.
      
  • Per product Amber Box support: capped at average for notified support in 1995-2000 with some variation for the US and others. Countries' caps to be annexed to these "modalities"
      
  • De minimis. Developed countries cut to 2.5% of production. Developing countries to make two-thirds of the cut (no cuts if mainly for subsistence/resource-poor farmers, etc). (Applies to product-specific and non-product specific de minimis payments)
      
  • Blue Box (including "new" type). Limited to 2.5% of production (developed), 5% (developing) with caps per product.
      
  • Green Box. Revisions and tighter monitoring and surveillance.

 

MARKET ACCESS

  • Tariffs would mainly be cut according to a formula, which prescribes steeper cuts on higher tariffs. This is now largely in single numbers instead of ranges of cuts. For developed countries the cuts would rise from 50% for tariffs below 20%, to 66-73% for tariffs above 75%, subject to a minimum average, with constraints on tariffs above 100%. (For developing countries the cuts in each tier would be two thirds of the equivalent tier for developed countries, subject to a maximum average.)
      
  • Some products would have smaller cuts via a number of flexibilities designed to take into account various concerns. These include: sensitive products (available to all countries), the smaller cuts offset by tariff quotas allowing more access at lower tariffs; Special Products (SP, for developing countries, for specific vulnerabilities).
      
  • Contingencies. Scrap or reduce use of the old "special safeguard" (SSG, available for "tariffied" products). Developing countries have a the new "special safeguard mechanism" (SSM).

 

EXPORT COMPETITION

  • Export subsidies to be eliminated by end of 2013 (longer for developing countries). Half of this by end of 2010.
      
  • Revised provisions on export credit, guarantees and insurance, international food aid (with a "safe box" for emergencies), and exporting state trading enterprises.
      

 


Download this briefing note in MS word format

  THE STORY SO FAR

 
• 2000: Agriculture negotiations launched (March). See backgrounder

• 2001: Doha Development Agenda launched. Agriculture included (November)

• 2004: "Framework" agreed (August)

• 2005: Further agreements in Hong Kong Ministerial Conference (December)

• 2006: Draft modalities (June)

• 2007: Revised draft modalities

• 2007-2008: Intensive negotiations with working documents (September-January)

• 2008: Revised draft modalities (February, May and July)
  

 

"MODALITIES":
The way or method of doing something - in the Doha Development Agenda negotiations these are blueprints for the final deal, eg, how to cut tariffs, and reduce agricultural subsidies and support, along with flexibilities to deal with various sensitivities. Once the modalities have been agreed, countries can apply the formulas to tariffs on thousands of products and to various support programmes.