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Symposium on issues confronting the world trading system
summary reports by the moderators

6 and 7 July, World Trade Organization, Geneva, Switzerland  

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Friday, 6 July

Session 1: Agriculture — Issues and Negotiations

Moderator: H.E. Mr. Pekka Huhtaniemi — Ambassador of Finland

This is a brief summary of the Work Session on agriculture that took place yesterday between 2.30 and 5.45 in the afternoon. Obviously, in such a summary of a discussion that took place over 3 hours 15 minutes, I cannot do full justice either to the panelists or to the other participants who offered views and comments, but what I have tried to do is to describe the principal points made during the discussion.

I opened the discussion by outlining the work that has been undertaken so far in the on-going negotiations on agriculture which are now in the their second phase in the WTO. The first phase had been characterised by the high level of participation by Members countries and the intensity of discussion with 47 proposals and technical papers from 127 Member countries. There were wide differences between proposals and the views of different Members. Similarly, the discussion that took place in the Work Session yesterday afternoon also showed wide differences of views, but there were also some areas where similar concerns were expressed by several speakers.

The three panelists made their introductory remarks. Mr Volanen of COPA-COGECA noted the dilemma that faces European farmers as they have to cope with falling prices as a result of agricultural reforms in the European Communities while, at the same time, their costs increase as they have to meet non-trade concerns such as environmental considerations and animal welfare standards. While trade and trade rules are essential for European farming, a completely liberal market could not apply to agriculture either in developed or developing countries. What was needed was an approach that took account of the multifunctional character of agriculture and allowed supports that enabled non-trade concerns to be addressed and agriculture to continue to provide the positive externalities associated with it.

While agreeing on the need for international trade rules, Mr Howard of the National Farmers' Federation of Australia took a different view. He noted that a growing world population would need more food and, if this was to be produced without greatly increasing the area under cultivation, productivity had to improve. This would require more efficient use of resources, which meant getting government out of markets, reducing subsidies and allowing free movement of goods and services. He noted that current agricultural policies in many countries wasted resources, harmed the environment and hurt the interests of the world's poor. Reducing subsidies that encouraged production and exports and improving market access would improve productivity and reduce many negative externalities associated with subsidised agriculture. At the same time the opportunities created for trade would help farmers improve their incomes. Regarding the agriculture negotiations currently underway in the WTO, he suggested that non-governmental organisations that satisfied certain governance and transparency criteria should be able to have some input into the process.

The third panelist, Dr Farahat of the Permanent Mission of Egypt in Geneva, noted that in general in developing countries agriculture made up a much larger part of employment and their GDP than in developed countries. Developing countries needed much better access to the markets of wealthy countries. To take advantage of these opportunities, reduced domestic support was also needed to prevent subsidized production from giving an artificial advantage to producers in wealthier countries. In the agriculture reform process developing countries would continue to need special and differential treatment: for example, they should be entitled to reduce tariffs by lesser amounts and to have some flexibility to provide subsidies. In addition, any difficulties that reform might cause for least-developed and net food-importing developing countries to meet their food import needs had to be addressed through better implementation of the Marrakesh Decision. In relation to the other negotiations currently underway on services and the suggestions by some countries concerning a wider round of negotiations being launched at the fourth Ministerial Conference, Dr Farahat stated that there should be no link between these and the agriculture negotiations which should be concluded as swiftly as possible.

In the discussion that followed a wide variety of views were expressed by people from universities, delegates from some Permanent Missions in Geneva and by many NGOs representing different backgrounds and views in the debate.

It was noted, for example, that agriculture was one area where many developing countries have a comparative advantage but are unable to benefit as some wealthier countries maintain barriers hampering access to their markets while subsidising their own production and exports. Some speakers pointed out that the existing Agreement on Agriculture lacked balance as it permitted high levels of subsidies and protection for some countries while others had to liberalise, often due to the requirements associated with restructuring programmes under the IMF or the World Bank. Better balance was, therefore, needed so that developing countries could develop their agriculture sectors and improve their exports while facing less competition from subsidised production.

Some speakers stressed that for developing countries with limited financial resources, tariffs were often the only tool available for managing trade. In these cases, it could be argued that the tariffs were less trade-distorting than the subsidies used by wealthier countries regardless of the category the subsidy fell into under the Agreement on Agriculture. Some link was therefore needed between the tariff reductions in poorer countries and subsidy reductions in wealthier countries.

The idea of a "Development Box" was put forward. This would be designed to address the needs of small farmers in developing countries that had both low incomes and poor access to resources. By giving some flexibility to developing countries in terms of the tariffs they could charge and the subsidies they could provide, they would be better able to address the needs of these farmers and to improve the food security of their countries.

The concept of multifunctionality and the importance of many non-trade concerns were stressed by a number of participants. They noted that if agriculture was to continue to provide benefits associated with production, then certain protection and subsidies were needed. Others responded however, that for other countries what was more important than the actual concern or issue was they way in which it was addressed. If measures were taken that increased production or exports then this would harm other countries. Those who took this view also questioned whether trade-distorting measures are really effective in addressing individual non-trade concerns. They advocated specific policies that would target specific concerns rather than more general policies that encouraged production and often resulted in unforeseen and sometimes negative results.

One participant suggested that some issues raised in the agriculture negotiations, such as animal welfare, were not really valid when so many people were living in poverty around the world. Others responded that this was an important concern in some regions and that addressing this concern was not incompatible with trade liberalisation. This issue highlighted the positive role subsidies could play in addressing these and other concerns and the importance of ensuring that production was environmentally as well as financially sustainable.

Another specific issue of concern that was raised concerned competition policy and the ability of large international enterprises to distort markets and to capture most of the value of the subsidies provided by governments. While some countries might be able to introduce and enforce their own domestic competition legislation, others might need assistance, and there still remained the unresolved question of international rules or other arrangements that might need to be developed in this area.

Overall, the discussion between participants and panelists covered a wide range of issues. It was noted - perhaps not very surprisingly - that the discussion was similar in many respects to the discussions underway in the agriculture negotiations. Those negotiations will take time, and, likewise, it was clear that one afternoon session of our symposium was not sufficient to enable the participants to reach any agreed recommendations.

However, I would suggest that the exchange of views was very useful for all participants and gave us all a better understanding of the issues and problems being addressed both by civil society and governments in the context of the agriculture negotiations. As a moderator, I was particularly happy to witness the very respectful manner in which the participants interacted with each other and with the panelists, and the excellent auto-discipline that all speakers exercised with regard to the length of their interventions. I therefore believe, that all those who had points to make yesterday afternoon either could make them personally or saw them covered by other speakers. Hence, I take it that our exchanges served very well the purpose they were designed to serve, namely bridging the gap that is sometimes said to exist between the WTO processes and the genuine concerns of the outside world. 

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