Agriculture and the Doha Development Agenda
Keynote address by the Director-General to the World Food and Farming Congress
I am particularly pleased to be with you today. I think this meeting is both timely and important in bringing together agricultural experts from different backgrounds and nationalities to discuss agriculture from the perspective of global markets and global needs. In our interdependent world, we can no longer think of our domestic interests and policies without reference to the wider global context. Likewise, it is only with the maximum of international cooperation that we can find solutions to difficulties which we know transcend political and cultural frontiers. With the health of the global economy already clouded by uncertainty, we need urgent and constructive international action to get our economies back on the path of stable growth and ensure the benefits of this growth are spread as widely and as justly as possible.
This is why it is critical that the Doha Development Agenda — the round of multilateral trade negotiations launched last year in Qatar — should be successfully concluded on time. The Doha Development Agenda is one key element of multilateral cooperation that will stimulate economic growth, bring greater stability into international economic relations and help developing countries grow their way out of poverty. And bringing this Agenda to a successful end will take courage and leadership. If history has taught us anything it is that in periods of economic difficulty the temptation to turn inwards and seek to address our difficulties purely in a national context is greatest. But history has taught us equally, that such a course of action can be fatal. It is precisely at times like these that it is important to remind ourselves of the importance of securing and advancing open markets.
I should like to talk to you today about three key issues; Firstly, I want to emphasise that negotiations on agriculture must be seen in the broader context of the whole trade round. Secondly, I shall briefly report on the state-of-play of the negotiations. And finally, I should like to share with you some specific comments on the agriculture negotiations.
Agriculture and the broader Trade Round
One could be forgiven for thinking the Doha Development Agenda is an agriculture negotiation, by the high profile press coverage this sector has received. It is of course true that agriculture is a key element in the negotiations. Agriculture is politically sensitive in many countries and there are also high expectations for serious reform from the vast majority of our Members, so finding accommodation will be challenging. But beyond agriculture there is a very extensive Work Programme, often overlooked. In fact, the Doha Development Agenda is the most ambitious and wide-ranging trade negotiation ever undertaken. This includes market access in non-agricultural goods, services, the environment and possible new framework agreements on investment, competition, government procurement and trade facilitation. Members will also be looking at the links between trade, debt and finance; trade and the transfer of technology; the specific circumstances of small economies. And the list goes on.
We should think of this Work Programme, not just in sector specific terms, but also in terms of the potential cross-sectoral gains that can be reaped. Those of you from industry will have a far better idea than I of the inputs needed in producing feed and foodstuffs and in getting agricultural produce to markets — but I am sure that, for example, access to reasonably-priced machinery, efficient transportation and distribution networks and speedy customs procedures are all important elements in this process. Many of these issues are under negotiation in the DDA. The negotiations on market access cover all non-agricultural products, including pesticides and fertilizers, agricultural tools and machinery, and the many other goods required in production and marketing of feed and foodstuffs. The services negotiations cover virtually all service sectors – from financial and telecommunication services to distribution and transportation services that I mentioned earlier. The trade facilitation mandate addresses all of the issues relevant to the movement of goods in international trade, and a successful negotiation would go far to reduce the costs and delays at borders involved in doing international business. These are just some examples.
State of Play of negotiations
The Doha Development Agenda has been under negotiation now for one year and my assessment, I would say, is rather mixed. The good news is we have made progress on all fronts and we have not seen any signs of gridlock. I am concerned, however, that there is a certain unevenness in progress between different areas of the Work Programme and in general we are not moving forward as quickly as we need to. We need more clarity in negotiating positions so we can begin to forge consensus. And we need all areas of negotiation to move forwards together so Members can have an early idea of the possible overall balance of gains and concessions. This is important because the negotiations will be concluded on the basis of a single undertaking. This means that nothing is agreed, until everything is agreed together. So a picture of what the final package might look like must emerge, with due time for all Members to give it their consideration. There is no room for cobbling together a deal at the last minute.
We are now entering a crucial phase of the negotiations with a number of deadlines looming on the near horizon. The first batch of deadlines are coming up in December. They are essentially issues of particular concern to developing countries. They include making more operational obligations on special and differential treatment — these are the special rights given to developing countries to account for their lower levels of development and the differences in benefits they can reap from the trading system. They also include addressing the issue of access to essential drugs for countries with insufficient domestic manufacturing capacity. And they include a package of “implementation issues”, which relate to developing country concerns about imbalances in the Uruguay Round agreements. We must make progress in these areas to give confidence to developing countries that the Doha Development Agenda is a development agenda not only in name, but also in substance.
In early 2003 we also have deadlines in non-agricultural market access, for modalities in agriculture, and the request / offer process for services. And then we will be holding our Fifth Ministerial Meeting in Cancun, Mexico in September — where Ministers will, among other things, decide upon the future of the “new” issues; investment, competition, government procurement, and trade facilitation. There is a real risk that if the early deadlines are not met, then the agenda for Ministers will be overloaded. If the Cancun Ministerial Conference is not a success, then I believe the whole round would be put in jeopardy. I cannot stress enough, how important it is to have a good result from this meeting. Following Cancun, we will have just over a year to conclude the negotiations by the mandated deadline of January 2005.
Progress on Agriculture
Unlike in the Uruguay Round, we have not started from scratch in agriculture, but with a mandate to continue the reform process that was only begun with the Agreement on Agriculture. That has facilitated some aspects of the negotiations, but some other developments have added complexity.
The negotiations have seen an unprecedented engagement and involvement of developing countries. This is as it should be. Agriculture trade is of critical importance to the economic development of poor countries, both importers and exporters. Along with textiles, clothing and a few other sectors, trade liberalization in agriculture is probably the single most important contribution the multilateral trading system can make to help developing countries, including the poorest among them, to trade their way out of poverty. More players at the table may complicate the game, but it is the only way to ensure that all gain from the end results.
The negotiations have also seen the submission of an unprecedented number of negotiating proposals. They include very concrete ideas concerning the all important formulae and quantitative targets for further trade liberalization. However, they have also brought to the table an array of other issues, reflecting trade as well as non-trade concerns.
The Doha Ministerial Conference put the negotiations on a new footing. The Ministerial Declaration clearly identifies the direction of reform and the level of ambition aimed at in the areas of market access, export subsidization and domestic support. It confirms that special and differential treatment for developing countries will be an integral part of all elements of the negotiation. And it confirms that non-trade concerns will be taken into account. This mandate has provided new impetus for the negotiations, and has set a ruthless timetable.
Thus far the negotiations could be kept on track. However, we are now in perhaps the most difficult phase of all. As I mentioned earlier, in barely more than four months, the modalities for further commitments in the three areas, including provisions for special and differential treatment, must be established. And of course, the negotiations do not end with the establishment of modalities. Subsequently, for example, draft schedules of commitments must be put together for submission by Cancun and negotiations to fine-tune rules are likely to continue well beyond 2003.
At this stage, as we are trying to make headway in establishing modalities, we are up against a number of key problems.
First, there are still wide gaps in the ambitions of governments, from those seeking rapid and fundamental reform and liberalization of trade, to those who are advocating a much more gradual approach. While one side has very clearly put down what it wants, the other side has not yet come forward with counter-proposals at the required level of specificity. This is an observation, by the way, that does not just hold for one or two issues nor is it just addressed to one or two participants.
Another point is that there are still differences in views among developing countries about what would be appropriate provisions for special and differential treatment. A delicate balancing act will need to be played out. On the one hand S&D needs to give space and flexibility to developing countries in their efforts to promote agriculture and to address adjustment needs in response to a changing trading environment. On the other hand, any provisions must ensure that developing countries contribute to the broadening of trading channels, including channels for the dynamic South-South trade in agriculture, as a means to generate income, employment and economic growth.
Finally, there are also still strongly held views about the extent and the ways to take into account a range of non-trade concerns that have been raised in the negotiations.
The lack of movement towards convergence in all these areas is worrying, because March 2003 is approaching fast. We will now have to move rapidly from position- and coalition-building to deal-making on the modalities for further commitments. I have been urging Members, who have not done so to further specify their proposals for modalities in market access, export competition and domestic support, including their ideas of the quantitative targets for further reform. I have been encouraging all Members to sit down with their trading partners, particularly those with opposite views, to show flexibility and understanding, and to look for negotiating solutions which, taken together as a package, are acceptable. And I have been urging Ministers to keep perspective – to look at agriculture in the context of the broader round and the gains that can be made elsewhere. I can only agree with the Chairman of the negotiations on agriculture: it is time to stop maximizing national positions, and to start crafting compromises and bridging gaps.
There is a lot at stake in the negotiations on agriculture, and a lot of benefits that could flow from reform in this sector, particularly, but of course, not only for developing countries. Dismantling trade barriers and trade-distorting subsidies will help boost agricultural production in countries where food can be produced most efficiently and in a sustainable way, including in many developing countries where problems of food security are endemic. It will help developing countries to broaden and deepen their economies, including by diversifying their exports and production, helping to shield themselves from damaging fluctuations in world commodity prices. More competitive markets can stimulate innovation – promoting diffusion, both nationally and internationally, of cost-effective, environmentally-friendly agricultural production technologies and advances in farm management practices. Moreover the growth that trade brings, can add to resources available for improving agriculture infrastructure – such as national transport and food distribution and marketing systems and it can enhance the power of people to buy food.
I hope that my brief report may have given you some food for thought. I also hope this forum will help in seeking creative solutions to agricultural reform, both for its own sake and also in the wider context of the Doha Development Agenda. I look forward to listening to your comments, suggestions and insights.
Thank you for your kind attention.