US Bends a Little on Commodity Caps

Geneva - The United States indicated it will consider a combined cap on "amber box" and "blue box" domestic payments for commodity-specific subsidy payments that would specify the maximum amount that Washington could spend at any given period of time, according to trade diplomats here (WTD, 2/26/07).

Washington signaled its willingness to go along with the Brazilian proposal during five-way discussions on agriculture issues in the Doha Development Agenda negotiations in London last week.

The move was the most promising outcome from last week's meetings which otherwise accomplished little, according to one envoy.

However, the combined cap for both the "amber" and "blue" boxes as proposed by Brazil is over what each member is required to do in the DDA framework agreement for Aggregate Measurements of Support.
Brazil and India yesterday debriefed members on the outcome of the senior-level meetings. Bilateral meetings by Brazil with the United States and the European Union focused on overall trade-distorting supports and product-specific disciplines. No figures were discussed.

Although the meetings brought no dramatic shift in the Doha farm negotiations, they contributed to the sharing concepts - especially in the trade-distorting domestic support, trade diplomats said. Washington has yet to indicate how much farther it is prepared to go in reducing overall trade-distorting domestic supports. Washington made a strong case that any flexibility on trade-distorting domestic supports will be conditioned on what more key members are ready to do in market access, trade diplomats said.

Anti-Concentration For 'Blue Box'

The European Union has mooted a proposal that calls on Washington to accept anti-concentration disciplines in the "blue box" with spending limits ranging between 30 percent and 40 percent. But Brazil is understood to have said the EU proposal is a "non starter" since it does not address concerns in other products. Brazil insisted at London that Brussels accept all the parameters of the Group-of-20 proposal - and not simply "come close" to the 54 percent in average "headline" cuts. Brazil also maintained that other elements in the G-20 proposal involving the maximum deviation in the treatment of "sensitive products" from each band must be addressed.

India pressed the United States and the EU in London to agree to the Group-of-33 position on a broader definition of "special products" and the "special safeguard mechanism." India also spoke of the need to involve the chair for Doha farm trade negotiations Crawford Falconer in future bilateral meetings for the sake of transparency.

There will be no senior meetings in March because the United States will be busy attempting to complete important free trade agreements with South Korea and Malaysia, WTD was told (see related report this issue).