On Tuesday, July 17, New Zealand Ambassador Crawford Falconer, chairman of the agricultural negotiations at the World Trade Organization (WTO), and his Canadian counterpart Don Stephenson, chairman for industrial products, presented their revised draft "modalities" to the members of the WTO. These documents, "developed based on the positions adopted by WTO member governments over several months (…) are in no way to be considered final texts. They serve as a way to put possible areas of agreement on paper so that members can react and further revise the texts." These texts were announced several weeks prior to their presentation, and were much anticipated after the failure of the G41 meeting on June 21 in Potsdam, Germany, which came to an early close when the Brazilian and Indian delegations walked away from the negotiating table. These influential members of the trade negotiations have been trying for months to reach a compromise, essential for concluding the Doha round, between opening the industrial markets of emerging countries and reducing customs duties and agricultural subsidies in developed countries.
The United States is particularly affected by this reduction of agricultural subsidies; according to the text submitted by Falconer, the country would be expected to reduce these subsidies by between 66% and 73% to a total of between $13 and 16.4 billion. This proposal is not acceptable either to the United States, which had set the bar at $17 billion, or to Brazil and India, which were demanding $10 to 11 billion. The proposal's presentation coincided with revisions to the Farm Bill, an American agricultural policy. "The WTO is obviously naive enough to think that this could influence Congress," wrote a wry observer in Washington, DC, in the July 19 issue of the Tribune. The level of reductions required by Falconer is between 75% and 85% for the European Union and between 50% and 60% for Japan and the other developing countries.
In opening the agricultural markets, Falconer proposes a differentiated reduction of customs duties according to the maximum levels tolerated. The European Union, which is under constant pressure on this issue, would have to reduce duties by an average of between 52% and 53.5%, a rate previously mentioned by Peter Mandelson, European Trade Commissioner. Each industrialized country would have to respect a limit of 4% to 6% of its tariff lines on its number of 'sensitive products,' i.e., products receiving special treatment for liberalization. This range is higher for developing countries, which would be authorized to protect a further one- or two-thirds of their products.
In terms of export subsidies, the third "pillar" of the agricultural negotiations, Falconer's document suggests eliminating them by 2013, half of them by 2010. The new provisions for export credits and insurance, food aid, and state-owned export companies are to be monitored more closely.
In exchange for these "concessions" on agriculture, Don Stephenson's paper specifies that emerging countries are to open their industrial markets by setting a ceiling on customs duties of between 19% and 23%, a range below the level tolerated by Brazil and India (30%), which fear an influx of Chinese products into their national markets.
An issue of particular interest to developing countries, cotton subsidies are to see a greater reduction than subsidies on other agricultural products, in keeping with the decision by the Hong Kong Ministerial Conference in December 2005. This would mean that 80% of American and European subsidies on cotton would be eliminated a third of the way into the implementation period for the potential agreement.
As for "special products" and the "special safeguard mechanism"2 , two major demands by the G333 , Crawford Falconer indicates he has nothing new to add given the current state of negotiations. The issue of geographical indications (such as AOC) – a real problem for the EU – is not mentioned.
The member countries were quick to react to the proposals: the United States referred to the drafts as "rough copies," while Michel Barnier, French Minister of Agriculture, stated that he was "concerned by the lack of reciprocity required of the various WTO members." He shares this point of view with COPA-COGECA4 , which insists that through these new trade documents, "the WTO is bending to the will of the United States." The representatives of agricultural professional organizations and co-operatives in Europe are also concerned about "the influx of low-cost imports from countries where standards for food safety, the environment, and animal welfare are distinctly less strict, which will result in substantially lower levels of production within the EU," in the meat sector in particular.
Although Pascal Lamy called upon the WTO members present at the July 26 meeting in Geneva to return in September "determined to undertake intensive negotiations" in order to reach an agreement by late October, the talks do not seem to be nearing an end.
Source : AFDI and articles from the national and international press. 1 Brazil, United States, India, and European Union. See the news item entitled The Doha Round: no possible solution as things currently stand, published on our website on July 9, 2007.
2 The special safeguard mechanism is designed to allow any developing country to temporarily protect its agricultural products in an unfavorable foreign context (increasing import volumes and/or falling prices) "for an appropriate number of products designated as Special Products based on criteria of food security, livelihood security and rural development needs." (WTO, 2004 framework agreement).
3 The G33 includes 42 developing countries, 10 of which are also G20 agricultural exporters, and 28 of which belong to the G90 (African Union, Least Developed Countries, African, Caribbean, and Pacific countries). Its main role is to defend the right of developing countries to maintain high levels of protection against imports of agricultural products.
4 Committee of Professional Agricultural Organizations in the EU and General Confederation of Agricultural Co-operatives in the EU. |