archives: WTO InfoUS, EC present joint proposal to break deadlock in WTO Ag talks
International Trade Daily
Thursday, August 14, 2003Lead Report
Agriculture
U.S., EC Present Joint Proposal
To Break Deadlock in WTO Ag TalksThe United States and the European Commission offered a joint proposal at the World Trade Organization Aug. 13 aimed at breathing new life into the stalled WTO agriculture negotiations.
U.S. officials, however, conceded that much work remains before the differences between the United States and the EC over the issue--as well as among other WTO members--can be overcome.
Allen Johnson, chief U.S. agriculture negotiator at the Office of the U.S. Trade Representative, said that the joint proposal, presented at a heads-of-delegation meeting in Geneva, represents a "major breakthrough" in the negotiations.
He said that the proposal effectively bridges what he called the "polarization" that has existed between the two sides with respect to the three "pillars" of the WTO farm talks: market access, domestic support, and export subsidies.
Johnson said in a teleconference call with reporters from Geneva that the impasse between the United States and the EC has "stalled" progress in the agriculture negotiations, which, he said, is key to success in the overall WTO talks.
"If agriculture doesn't move forward," Johnson said, "nothing's going to move forward. ... Getting agriculture moving is a prerequisite to getting everything moving."
Sealed after more than two weeks of discussions among officials including U.S. Trade Representative Robert Zoellich and European Trade Commissioner Pascal Lamy, and beginning on the margins of the WTO "mini-ministerial" meeting in Montreal July 28-30, the U.S.-EC agreement seeks to set a broad framework for negotiating further liberalization of global agriculture trade, Johnson said.
Numerical Targets Not Included
He conceded that specific numerical targets will have to be "filled in" later in the talks.
Johnson said that the United States and the EC presented the proposal to be considered by other WTO members between now and the WTO ministerial meeting scheduled for Sept. 10-14 in Cancun, Mexico, which will bring together trade ministers from all 146 WTO member countries.
"It's really up to the [WTO] membership at this point," he said.
On the critical issue of market access, the U.S.-EC proposal would use a "blended formula" for substantially reducing import duties--combining elements of the so-called Uruguay Round approach, favored by the EC, and the "Swiss formula," supported by the United States.
EC Agrees to Swiss Formula
Johnson said that the joint proposal represents the first time that the EC has agreed to use the Swiss formula, which would bring down tariffs by a greater amount for products with higher duties than for products with lower ones.
Market access for so-called import sensitive tariff lines would be increased through a combination of tariff cuts and tariff-rate quotas (TRQs).
The U.S.-EC proposal would also commit WTO members to eliminate export subsidies over a yet-to-be-determined time frame for some products, also unspecified, that are of particular interest to developing countries.
The proposal appears to leave open, however, the possibility of countries continuing to provide some export subsidies, saying that, for the remaining products, WTO members would commit to "reduce" budgetary and quantitative allowances--despite assurances from USTR's Johnson that the eventual aim of the U.S.-EC plan would be to completely eliminate all forms of export subsides.
The United States, in fact, has called for the scrapping of all export subsidies over five years--a demand strongly opposed by the EC.
Under the U.S.-EC agreement, member countries of the WTO would also agree to reduce "the most" trade-distorting domestic support by a still-unspecified percentage.
Certain types of domestic support, however, would be permitted.
The U.S.-EC agreement would also commit countries--notably, the United States--to eliminating export credits for products of interest to developing countries and reducing export credits for other products--in parallel "in its equivalence" with movement on export subsidies.
Disciplines would also be put in place to prevent "commercial displacement," i.e., dumping, through food aid operations, the proposal said, as well as to curb certain practices of state-trading enterprises.
Grassley Comments
Sen. Charles Grassley, chairman of the Senate Committee on Finance, issued a written comment Aug. 13 pointing to ambiquities in the agreement.
Grassley said: "At the urging of trading partners, the United States and European Union reached an agreement, in principle, on a conceptual framework for further discussions on agricultural negotiations. This framework more clearly defines the issues. And this is certainly progress. But the devil is in the details, and many aspects of the proposal need to be developed and fleshed out over the next several weeks."
He continued: "We weren't going to make good progress in the World Trade Organization negotiations without an agreement on agriculture. In a sense, much of the rest of the Doha agenda has been stalled by our inability to bridge this gap.
Grassley concluded, "There's still a lot of work to do even though many of the fundamental concepts that we worked for on behalf of American agriculture are part of the framework agreement. As Chairman of the Finance Committee, which has jurisdiction over international trade policy, I'll work closely with my constituents and colleagues for the best agreement possible for American agriculture."
By Gary G. Yerkey
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