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Other briefing notes:
> Agriculture
> Non-agricultural market access (NAMA)
> Services
> Rules
> Intellectual
property: geographical indications and biodiversity
> Trade and environment
> Trade facilitation
> Special and differential treatment
> Dispute settlement
> E-commerce
> Jargon buster
> Country groupings
> Briefing
note on intellectual property: non-violation complaints
See also:
> Agriculture negotiations
> Doha declaration
> Doha declaration explained
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‘Modalities’
The way or method of doing something — in the Doha Round 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.
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.
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 this
“distorting” support would cut it 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. For
individual products this type of support 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.
July 2008 negotiations and after
When ministers came to negotiate
“modalities” in Geneva in July 2008, Director-General Pascal Lamy said
they had agreed tentatively on a number of issues but were stuck on
the “special safeguard mechanism” for developing countries. This is
described
here. Summaries of the July talks (and more) can be found
here.
Now on the table
Then in December 2008, the chairperson of
the agriculture negotiations circulated the latest version of his
draft “modalities”. This is the version currently on the table.
HIGHLIGHTS DECEMBER 2008 DRAFT
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 80%; US/Japan to cut by 70%; the rest to
cut by 55%. “Downpayment” (immediate cut) of 33% for US, EU, Japan, 25% for the rest. Bigger cuts from some other developed countries,
such as Japan, 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
over three years to 6-7% (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 — particularly on income
support, to ensure it really is “decoupled” (ie, separated) from
production levels, and on developing countries’ food stockpiling — and tighter monitoring and surveillance.
MARKET ACCESS
- Tariffs would mainly be cut according to a formula, which prescribes steeper cuts on higher tariffs. For developed countries the cuts would rise from 50% for tariffs below 20%, to
70% for tariffs above 75%, subject to a 54 % 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
of 36%.)
- 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. Developed countries will scrap
the old “special safeguard” (available for “tariffied” products).
The option for them to keep some has been removed. More proposed
details of the new “special safeguard mechanism” for developing
countries are in an additional paper.
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.
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Since then …
The new agriculture negotiations chairperson, Ambassador David Walker of
New Zealand, has been holding talks on unsettled issues arising from the
December 2008 draft, and on the technical task of creating “templates” —
blank forms prepared for members’ “schedules” (or lists) of commitments,
and for data used to calculate the commitments, some of the data to be
in “supporting tables” attached to the schedules of commitments. The
commitments themselves will be prepared after “modalities” are agreed —
the “modalities” contain formulas for calculating the new commitments on
tariffs, tariff quotas and support. But the forms and data needs will be
identified with the “modalities”, which is why the work is being
undertaken now.
Find out more …
… about the agriculture negotiations, and
follow news of the farm talks |
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THE STORY SO FAR