WTO agriculture chair indicates change in approach

The week of agriculture negotiations at the World Trade Organisation ended a day earlier than scheduled, due to lack of any new "movement" by the major members.

Some trade diplomats pointed to the talks this week in Washington between the US and EU trade officials as having a possibly significant bearing on the position that the two majors will take on agriculture, and thus developments at the WTO would have to wait for the conclusion of their bilateral talks.

At an informal open-ended meeting on 15 September, the chair of the Special Session of the Committee on Agriculture, Ambassador Crawford Falconer of New Zealand, indicated that the negotiations would aim at achieving modalities, instead of the "first approximations" that had been targeted, unsuccessfully, for the July General Council.

He also indicated that there would be a change in the negotiation approach, from the "incremental" approach used by his predecessor (Tim Groser, also of New Zealand), to a more "comprehensive approach."

He apparently meant that a broad range of issues would be looked at simultaneously, instead of the negotiations focusing on one area at a time.

This new phase of negotiations would also consider the level of ambition, to entertain numbers and not just the structure and form of the modalities. And it would also take into consideration trade-offs and inter-linkages with other areas of negotiations.

Falconer said that the change is needed because the talks have shifted from the situation before the summer break, when negotiators were working on a "first approximation" of modalities. He explained that now because of the "manifest sense of increased urgency" negotiators are working directly towards "modalities".

During the discussions, there were differences among members on what issues to place the emphasis, as the talks broaden in the more "comprehensive" agenda. Members of the G33 and some other developing countries stressed the need to focus more on what they consider to be the "development dimension".

This includes in particular additional flexibilities for developing countries - special products, the special safeguard mechanism, and exempting developing countries from having to cut "de minimis" domestic support (Developing countries are currently allowed Amber Box-type supports up to 10% of agricultural production).

Kenya urged the Chair not to leave the special and differential treatment issues to the last in all aspects of the negotiations, since it is possible to identify the SDT (special and differential treatment) elements at this stage. It also wanted the chair to find solutions to the problem of commodities as raised in its earlier written submission.

On the other hand, the EU said that it wants to discuss geographical indications.

Another major issue of concern raised by developing countries was the need to have a participatory and transparent process of negotiations. They were implicitly referring to the unsatisfactory situation of recent months, when most of the negotiations were conducted by the so-called "five interested parties" (US, EU, Brazil, India and Australia), with other delegations mainly kept in the dark.

The Philippines, speaking on behalf of the G33 countries, underscored the need for a "bottom-up" approach where no members are excluded in the process of the agriculture negotiations. This approach will be necessary in order for members to have ownership over the outcomes of the negotiations. And this will not be achieved in the cases where decisions and texts are taken and drafted by a few and then imposed on the rest of the membership, the G33 said.

Referring to their recent declaration, the G20 also emphasized the need for a bottom-up approach. They pointed out that this would be necessary in this new phase of negotiations in order to guarantee the participation of all members.

In his conclusion, Falconer said the discussion highlighted members' insistence that the negotiations have to be "bottom-up" (a term used to mean that decisions had to be made by the membership as a whole and not imposed by small groups or by the chair).

He promised members that there would be "no papers from heaven", or "papers out of a hat". The approach would be "no surprises" sprung on delegations.

Members also spoke about the "level of ambition". The US said that a high level of ambition is needed and that this depends on how much market access would be achieved. The time has therefore come to look at the specifics and consider numbers in the modalities.

The EU said the level of ambition is not defined only in terms of numbers in the modalities but also by the tightening of rules, in particular geographical indications. New Zealand, while agreeing that rules should be included, disputed the EU's assertion that the topic of those rules should include geographical indications.

China said that the question is not whether to start talking about numbers since they had appeared in earlier drafts such as the Harbinson and Derbez texts, but whether the members could agree on the numbers. China pointed out that the level of ambition should also be weighed by development considerations and not just simply be about market access.

On the Chair's suggestion of inter-linkages with other areas of negotiations, China and some other members said that the trade-offs with other issues such as NAMA and services, would have to be handled at a higher level such as the Trade Negotiations Committee, and should not be considered within the agriculture negotiations.

In summing up the discussions, the Chair recognized many members' insistence that the negotiations have to be bottom-up: that consensus has to come from ideas of the membership as a whole and not imposed by small groups or by the chair.

The Chair informed members that the next agriculture week will start on 17 October. However, he would not wait till then to start working, and told members that they should be "on call" for consultations. He will conduct consultations over the next two weeks and would open a "clinic" at the end of the two weeks (on 26 September), where members could visit and find out what has happened in the discussions.

At a media briefing Friday morning, senior US government officials said that agriculture is the lynchpin to moving forward in the negotiations, adding that market access is the least developed area under the framework.

Responding to whether the US was prepared to move on the subsidy issue, the officials said the US had a long-standing commitment to reduce trade-distorting subsidies with a view to eliminating them. Any result that lives up to the Doha mandate will result in substantial reduction in subsidies by the US.

The officials indicated that both the US and the EU would have to move together on the domestic support and market access issues. For the US, the level of ambition in domestic support is linked to that on market access.

The recent G20 proposal on market access, the officials said, is somewhere in the middle ground between a Swiss formula and a Uruguay Round type formula and it lays down some specific parameters on the tiers for the tariff reduction formula.

The US would like to see something more ambitious and would want to see some improvement in the tiers, the type of formula and the tariff cap. The tariff cap proposed by the G20 (100% for developed countries and 150% for developing countries) is too high.

On cotton and the demand of the West African countries for a down-payment on this issue in Hong Kong, the officials said that the US has always been a supporter of sectoral initiatives, be it cotton or oil seeds, pork, beef and fruit and vegetables.

While it acknowledged that cotton will be in the negotiations, it did not want sectors to get in the way of the general formula. There is an important sequence, the officials said, which is to get the shape of the package (modalities) first before tackling the various sectors.

The officials maintained that some things are being done on cotton such as exploring technical capacity-building in these countries.

Meanwhile, at a media briefing Friday afternoon, the Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, in summing up this week's talks, said that there seems to be wide acknowledgement that members are in a new phase, and that there appears to be realization now that there is no alternative but to prepare for modalities for Hong Kong.

All the jargon that was used before July such as 'first approximation' of modalities is well and truly past, he said.

While there is a willingness to continue with the technical work that was done until July and that this should be built upon, this should be increasingly invested with the consciousness that if this is going to be done, it would be helped if there is a more concrete sense of what the numbers are going to be.

On the process, the Chair noted that the next agriculture week of meetings had been scheduled for 17 October. "We can't afford to wait until 17 October," he said. While there is no point in having meetings for the sake of having meetings, he added, he could also not allow the process to languish.

He said that he intends to hold a session at the end of September where members would be invited to exchange their views. He also hopes to hold an open-ended informal meeting of the membership in the first week of October to take the process forward. The agenda for that meeting would be devised in light of progress, if any, by that date.

(* With inputs from Kanaga Raja.)