Developing Countries Prepare For Agriculture Battle At Cancun Ministerial

8 September, 2003
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TWN Report from Cancun, 9 Sept 2003 (By Martin Khor)

As the WTO's Fifth Ministerial Conference begins, developing countries have given notice that they will fight to the end of the meeting to ensure that their positions on the framework on modalities for agriculture negotiations will prevail over the present draft Cancun text on agriculture and the US-EU position on which it is mainly based.

On 8 Sept evening, the Group of 21 (G21) developing countries told a media conference (chaired by the Brazilian Foreign Minister) that they will insist that their framework proposal (first submitted in Geneva on 20 and 28 August, and now re-issued as a Ministerial document WT/MIN(03)/W/6 dated 4 Sept) be at the center of the agriculture negotiations in Cancun. They rejected the text submitted by the General Council chairman, Uruguay Ambassador Carlos Perez del Castillo, as the basis of negotiations.

At another media conference, chaired by the Indonesian Trade Minister, another group of 23 developing countries announced they had formed an Alliance for Strategic Products and Special Safeguard Mechanism (SSM) to fight for the interests of "small vulnerable resource-poor farmers from developing countries" through strong SP and SSM mechanisms in the Cancun outcome on agriculture.

The G21 media conference, held after a Ministerial meeting of the group during which a Ministerial Communique was adopted, was addressed by the Ministers of Brazil, India, China, South Africa, Argentina and Costa Rica. Brazilian Foreign Minister Celso Amorin said the meeting was a historic event in that so many developing countries which represented over half the world population were able to come together .

He said the Ministers agreed it is key to keep their unity which will be tested throughout the Conference, and questions that may appear secondary or procedural will be important. Amorin said the G21 Ministers agreed that the Castillo draft does not respond to their countries' needs and is not the basis for negotiations. It is essential that the G21 paper is also taken as a basis and this can be easily done as it follows the same format as the Castillo paper. Added Amorin: "Ours is a good cause, we have the support of our population and a large proportion of world opinion, this is a chance for the WTO to show it cares for the poor."

India's Commerce Minister Arun Jaitley said the group's formation was a very important ocassion as it marked an important point where developing countries representing 65% of the world's population of farmers, are attempting to put forward their own case. "our document is not adequately addressed in the draft text and we will work together to ensure our points are addressed."

South African Trade Minister Alec Erwin said it was historic the Ministers could unify positions across such major agricultural economies and exporters. They were fighting for a balance that meets the requirements of a fair agriculture trading system with the main adjustment burden lying with industrial countries that are the main subsidizers.

The Chinese Trade Minister said the G21 proposal involves developing countries' interests as the 21 countries represent 51% of world population and over 60% of the of the rural population of the world live in these countries. He hoped the Ministers would consider the G21 text even as they are considering the Chairman's draft. Cancun could only be a success if it fully takes account of developing countries' interests.

The Argentinian Minister said the G21 proposal is both balanced and professionally well done and when the Conference starts the following day this paper must be accorded the same basis as the Chair's text, and this was not just a procedural issue but part of a constructive approach.

The Costa Rica Minister said it was very hard for Third World farmers to compete not only with farmers from other countries, but also with Finance Ministries of the rich countries. If Cancun is to make progress on other issues, such as non-agriculture products, we must have progress in agriculture too.

To a question what the group would do to ensure its text is taken on the same level as the Chairman's text, Amorin said he would not comment on the groups' tactical moves. "We want our text as a central part of the negotiations. There is no difficulty to do this. You cannot ignore this text which comes from so many developing countries. After all this is supposed to be a "Development Round."

To another question whether this alliance of countries would extend its concerns to other issues beyond agriculture, Amorin said the group had only discussed agriculture but of course in a negotiation everything is linked. "Strategically we should keep united and it may go beyond the specifics of the agriculture text."

Erwin said the group had struck a successful balance and formed an alliance not on one or two specifics but on agriculture as a whole in WTO. Given the significance of the countries involved, it is unavoidable the conference will take acont of our proposal.

Jaitley stressed two points in the alliance -- it had numerical backing (representing over half of humanity) and it is based on fairness in addressing agriculturaql trade distortions. It would thus attract others too. The Chinese Minister added that Cancun's success depends on whether it follows the fair competition principle and provides S and D for developing countries. The G21 proposal reflects this spirit and Cancun will succeed only if it heeds this.

The Argentinian Minister said agriculture is at the center of the Development Round, and there will not be substantive movement in NAMA or Singapore issues unless our agriculture needs are taken into account. "If we are successful we'll see how to approach other matters."

Ending the media conference, Amorin said in the past there was an impression that fighting for social justice took place outside the hall. But now the fight for social justice is also inside the WTO and this is part of the historic moment.

The G21's Ministerial Communique said that being a key stakeholder the Group tabled a framework proposal to make the process more inclouve and balanced, fully respecting the Doha level of ambition. It criticized the Chairman's draft fo not reflecting Doha's ambition level for it fails to deliver substantial cuts on trade distorting domestic support, substantial increase in market access and elimination of export subsidies.

To correct these imbalances, the G21 proposes an approach requiring substantial contribution from developed countries. Since they are fundamentally accountable for thed distortions, major developed countries bear a special responsibility.

In domestic support the proposed cuts are complemented with tighter rules and disciplines to ensure the reform process is effective and not "degenerate into box and product shifting". It is also targeted to avoid abuse of domestic support not subjected to reduction commitments. "Our proposal will not permit that the total level of support to commodities reach outrageous proportions which have generated for example grave problems for cotton producers in Central and West Africa."

The Communique adds that export subsidies must be eliminated and tighter rules shall be established on export credits and food aid so that these forms of circumvention of export subsidies commitments cannot continue to distort export competition.

On Market access, the G21 proposes depper tariff cuts, elimiknation of the special safeguards for developed countries, TRQ expansion and improved rules for their administration. For developing countries a differentiated formula is proposed to take account of S and D and development needs, and concerns of recently acceded members shall be addressed.

Since the Group's proposal reflects the Doha mandate, "it is and shall remain at the center of the agriculture negotiations."

Meanwhile, another meeting was held by 23 developing countries that formed an Alliance for Strategic Products and Special Safeguard Mechanism. Members include Barbados, Dominican Republic, Honduras, Indonesia, Jamaica, Kenya, Mnongolia, Nicaragua, Nigeria, Pakistan, Panama, Peru, Philippines, Trinidad and Tobago, Turkey, Uganda, Venezuela, Zambia, Zimbabwe, Tanzania, Ecuador.

In a Ministerial Communique, the countries said the Alliance represents the interests of a majority of the world's small, vulnerable, resource-poor farmers from developing countries across the continents. Their countries suffer undue stress imposed by the inequalities of the trading environment. Even on their own markets, producers of developing countries face increasingly difficult circumstances and impoverishment.

The Ministesr reiterated the need for fundamental reform, including reducing and phasing out export subsidies, substantial reductions in trade distorting domestic support, and substantial improvements in market access. For any reforms to be successful, S and D treatment must be an integral part of all elements so they can take account of development needs including food and livelihood security and rural development.

While welcoming the Cancun draft's reflection of some developing country concerns, the Ministers stressed the S and D component falls far short. The Alliance proposal for an SP and SSM mechanism must thus be an integral part of S and D. The Alliance proposal is that:

  1. Developing countries shall have the flexibility to self designate a ( ) percent of tariff lines as special products (SPs) which shall not be subject to tariff reductions and no new commitments on tariff rate quota.
  2. A special safeguard mechanism (SSM) shall be established for use by developing countries as a mechanism to protect their domestic markets against cheap and subsidized imports.
  3. Products designated as SP shall also have access to the SSM.

At the conference, the Indonesian Trade Minister said the 23 countries met to form the Alliance earlier today following their earlier work in Geneva, aimed at having strong SP and SM mechanisms in the agriculture outcome.

The Philippines Minister added it weas very important that these mechanisms be available to protect the local agriculture sector from unfair competition from outside.

To a question on the relation of the Alliance to the G21 (whose proposals on SPs is very weak), the Philippines Minister said many G21 countries also opted to join the Alliance as they felt the SP and SSM components in the G21 proposal should be more strongly worded. The Alliance could be an even larger grouping.

The Indonesian Minister agreed that in the G21 draft the SP aspect is very weak, and thus the need to have this Alliance. "We hope the G21 will understand ou Alliance and that it will support us." She added the Alliance's aim mis to focus on S and D, Sps and SSM. The key issue is the need in their countries for policy flexibility to safeguard our domestic products.

The Philippines Minister added that SPs and SSM were not aggressively pursued by the G21, so the new Alliance was formed to fill in the gap.


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