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TWN Info Service on WTO and Trade Issues (Jul 05/12)
27 July 2005
Third World Network
www.twnside.org

AGRICULTURE MEETING HEARS THERE IS NO CONVERGENCE FROM RECENT AGRICULTURE TALKS

In the past weeks there were informal talks on the agriculture issue among a small group of WTO members.

At a meeting on 26 July to inform the WTO membership on the talks, it was reported that there was no convergence of views and that it was thus not possible to draw up texts of "first approximations" of modalities.

Below is a report of the 26 July meeting on agriculture.

with best wishes
Martin Khor
TWN

No progress in agriculture talks

By Kanaga Raja (South North Development News) Geneva, 27 July 2005

There has been no progress in the agriculture talks over the past days, but it is not a crisis, the Chairperson of the Special Session of the Agriculture Committee, Mr. Tim Groser of New Zealand, reported Tuesday afternoon to an informal meeting of the Special Session on Agriculture (where agriculture negotiations take place).

Meanwhile, it was announced from Brussels that the EC Trade Commissioner, Mr. Peter Mandelson would be in Geneva. But many trade diplomats and observers saw the visit and presence, not as one to unblock the impasse, but perhaps as part of the EC exercise to shift the blame for the impasse on to other players.

In his report to the informal Special Session, Groser declined to go into any details, and wanted more time to think carefully and prepare his report, which he will circulate in the coming days.

The Groser-led consultations on agriculture have been taking place among a small group of 14 countries (called FIPs-plus) since last Thursday to seek convergence on a number of issues ahead of the General Council meeting on 27 and 29 July.

Discussions were held from late Thursday to Monday on market access, domestic support, sensitive products, food aid and STEs.

The informal agriculture meeting Tuesday was to allow Groser to report to the wider membership on his assessment of the outcome of the discussions.

At the meeting, Groser said that the lack of progress since he circulated his earlier assessment on 27 June does not put the talks in "crisis", although he said that he would have to think carefully before choosing a suitable description (instead of crisis).

He had hoped to report progress on specific issues, not only in market access, but also in some topics on the other pillars (domestic support and export subsidies). This has not happened, he said.

On the other hand, added Groser, he could see areas where shifts are needed. But he did not want to elaborate until he has considered these more carefully. If he spelt these out now, he might risk being misunderstood as delegations try to interpret nuances, he said.

He also said that he recognizes the high expectations of the "outside world" for the Doha negotiations to deliver significant results for trade and for development.

Describing the approach of his forthcoming paper, Groser said members should be confident that what they have already agreed remains the "bedrock", i.e. the Doha Declaration and the 1 August 2004 agreed framework. His paper will describe progress since then but the "acqui" (i.e. what has been achieved or acquired so far in the negotiations, reflected in those two documents) remains "intact", and the negotiating positions of countries remain protected by the two documents.

He said if some subjects have not been discussed and are not mentioned in his paper, that does not mean that their importance has been reduced - discussing these issues necessarily has to follow a sequence, meaning it would have to come later, but their importance would remain as reflected in the Doha Declaration and the framework.

This was partly to allay delegations' possible concerns about the process, i.e. that their positions are not being negotiated away in their absence.

Defending the need to consult in smaller groups, Groser cited the comments of the incoming Director-General, Mr. Pascal Lamy, that negotiations cannot take place under an arc-light. He added that all members' positions on the various subjects are well known to other members and to himself (even if they are not present in some of the consultations).

In an overall view of the current situation, WTO trade officials at an information briefing after the meeting said that it has become clear that the objectives envisaged by ministers and the Director-General some eight months ago about coming up before the summer break with 'first approximations' of modalities would not be reached this week.

However, the officials maintained that progress had been made in the last few weeks and days. In agriculture, members have delineated with a greater degree of clarity where the key problems are.

While members have had real negotiations, that doesn't make the task any easier in autumn, the officials said, adding that the areas of disagreement that have been identified especially in agriculture will require extremely difficult political decisions.

The market access formula in agriculture is absolutely essential as it is now the gateway issue that is holding up many other issues.

Hard work will be required in the coming months, the officials said. It can still be done by Hong Kong but this would depend on political courage and commitment involving politicians who should also be well connected to the process in Geneva.

At the agriculture meeting Tuesday, Kenya, speaking on behalf of Zimbabwe, Nigeria, Cameroon and Jamaica, urged Groser to take their special circumstances into account when considering the tariff reduction formula in agriculture.

These countries had opted to set "ceiling tariffs" in the Uruguay Round as part of special treatment for developing countries and as a result all their tariffs could fall into the highest tier of the tiered tariff-reduction formula meaning that they would have to make the steepest cuts, Kenya said.

In the Uruguay Round, developing countries were allowed to have (higher) bound ceiling tariffs instead of converting non-tariff barriers into (not so high) equivalent tariffs under a process known as tariffication. They agreed that because the bound ceilings would be higher, they would not seek to use special safeguards, a measure allowed only on products that were tariffied.

The WTO World Trade Report shows the following bound ad valorem rates for agricultural products:

Kenya - bound average 100% with no variance (but applied rates averaging 20.1% with small variance); Zimbabwe - bound average 143.4% with negligible variance (but applied rates averaging 26.1% with small variance); Nigeria - bound average 150% with no variance (applied rates averaging 53.9% with small variance); Cameroon - bound average 80% with no variance (but with applied rates averaging 22% with small variance); and Jamaica - bound average 97.4% with negligible variance (but with applied rates averaging 15.8% with small variance).

Kenya said that if their ceiling bindings all fall within the highest tier, then they would have to make the maximum adjustment, meaning that they would have to adjust more than developed countries. They also said that because of using the ceilings they were unable to use special safeguards and other flexibilities.

Kenya said that the very structure of the tiered approach combined with the proposals on the table regarding possible thresholds for the bands, could further penalise these countries by placing all their tariffs in the tier for maximal cuts. Developing countries with ceiling bindings would under such circumstances make concessions much beyond those that may be required from developed countries.

Kenya said that such an outcome would be contrary to the Doha mandate and the July framework. These countries could not support any approach for tariff reductions that do not effectively and clearly address these particular concerns, Kenya added.

Kenya proposed the following options:

* These countries will be subject to an overall average tariff reduction only. This is necessary given that the very structure of the tiered approach puts countries with ceiling tariff bindings at a disadvantage.

* Countries with ceiling bindings should spread their tariff lines across the various tiers of the formula, on the basis of their own assessment of sensitivities.

* No developing country with ceiling bindings will be placed in the tiers for highest reductions, irrespective of the thresholds agreed for general application.

Zimbabwe and Nigeria also spoke in support of Kenya's statement.

There were no comments from the major delegations or groups. Barbados asked what Groser's plans were for the rest of the week. Groser replied that he has not worked this out yet.