Diverse Positions On Agriculture In The Recent Negotiations

There have been several 'informal consultations' or 'Green Room meetings' (to which only some delegations are invited) on agriculture in the past several days. There had also been a heads-of-delegation meeting on agriculture on 21 July

As on the night of Monday 26 July, many delegations have reported that in their view there are still many deep differences among members and major groupings, and no breakthrough in the talks.

According to trade diplomats familiar with the negotiations, it is acknowledged during the informal meetings on agriculture that major issues in the three pillars of domestic support, export competition and market access are closely related to one other, and therefore if there are changes in specificity in one pillar it will inevitably affect the level of specificty in other pillars.

Market Access

On market access, the meetings have reportedly focused on the treatment of three issues: that of sensitive products for the developed country members, tariff rate quota expansion, and special products for the developing country members.

The G10 and EU have stated that as long as the tiered approach is adopted for the market access pillar where deeper cuts will be made for high tariffs, there should be specificities that include flexibilities for the treatment of sensitive products. The number of allowed sensitive products should also be 'equitable' taking into consideration the historical background of each country in this regard. The expansion of tariff rate quotas (TRQs) should also not be made mandatory. Furthermore the G10 has opposed paragraphs proposing tariff capping in the Annex on agriculture.

On the other hand, the US, G20 and Cairns group members such as Australia complained that the current Annex text on sensitive products allows too many products to be designated as sensitive products. Moreover, the annex is insufficiently clear on how sensitive products are to be treated. Consequently, this could create loopholes for substantial improvement in market access as mandated in the Doha Ministerial Declaration. In addition, these countries have demanded for mandatory TRQ expansion. The US also would like tariff capping to be included. The Africa Group said sensitive products of developed countries should be limited in range.

On the issue of special products for developing countries, the G33 want to see more specificity on this issue. This is especially so because there is a higher degree of specificity for sensitive products of developed countries. They also demanded that the number of special products should not be limited and its selection should be based on self-designation. At a heads-of-delegation meeting, Indonesia (which coordinates the G33) said besides the obvious differentiation in the level of specificity, the method of selection between sensitive and special products was also very imbalanced. The draft framework allows sensitive products to be self selected by developed countries. On the other hand the special products selection is to be negotiated under conditions to be determined.

The Africa Group (during the heads of delegation meeting) said it wanted the text on special products to read: 'Members will have the flexibility to designate special products.

There will be no requirement to expand TRQs and tariff reduction on special products.'

The US however does not want to see an 'unnecessary number of special products' and wants the number of special products to be limited and its selection to be done on the basis of objective criteria.

Domestic support

According to diplomats, on the domestic support pillar, the main issues covered in the meetings have been on capping and reduction of product specific AMSs, the blue box (especially the proposed 'new blue box') as well as the issue of de minimis for developing countries.

During the negotiations, the G10 rejected the proposal of the current Annex on the capping and reduction of product specific AMS. The G20 on the other hand supports in principle the current annex on this matter and wants conditions to operationlise it to be discussed in the post July package phase of the negotiations. It proposed that disciplines on a product-specific basis will be established for trade-distorting domestic support, including through capping levels and based on criteria to be determined. In addition, the G20 wants this approach (product specific capping and reduction) to cover blue box (especially new blue box) measures as well.

The US said that they are still reluctant to accept but may be prepared to consider specific AMS capping in relation to cotton. However, they are against having a certain product to be targeted for reduction.

The EU expressed their acceptance of product specific AMS capping and reduction.

With regards to the blue box, many countries view the proposal for new criteria for the blue box as being accommodating to the US, which would then be able to relocate some of its existing subsidies in the Green Box to the Blue Box.

The G10 complained during the negotiations that the introduction of the new blue box in the current Annex sets back the reform process. In a document proposing amendments to the Annex, the G10 proposed the deletion of the proposed measure of 'direct payments unrelated to current production.' The G20 position seems to be that a review of article 6.5 (dealing with the blue box) may (but not will) include possible modifications, but any new criteria to be developed have to abide by several disciplines.

The US has insisted that it needed the proposal for the new blue box.

The EU seems to have accepted a new blue box, but with a proposal to make the following amendment to the paragraph 13(b) dealing with members having recourse to the new blue box measures: 'subject to the establishment of further criteria to be negotiated, direct payments linked to current prices but unrelated to current production..[words in italics are the new proposed additions]'

With regards to its own usage of the existing blue box measures, the EU seeks for greater flexibility in the current draft Annex. The EU has accordingly proposed the complete deletion of paragraph 15 which is aimed at ensuring that blue box payments remains less trade distorting than AMS measures. In addition the EU has also proposed that the first two sentences to paragraph 14 which reads 'by the end of the implementation period to be agreed, Blue Box will not exceed an agreed percentage of the average total value of agricultural production during a historical period. Both the percentage and the historical period will be established in the negotiations.', be deleted.

The Africa Group, during a heads of delegation meeting, noted that the text legitimizes the use of new forms in the blue box as a permanent feature, which could undermine the aims of the reform process. It also called for the review of trade distorting elements of the Green Box measures of developed countries and for development of tighter disciplines through notification, surveillance and monitoring.

On de minimis, the G20, Africa Group and other developing country members reiterated their opposition to their having to make any commitment to reduce the level of their de minimis domestic support. The present text obliges developing countries to also reduce their de minimis support. Apparently the US is against exemption for developing countries.

Export competition

With regards to export competition, the discussions in the informal consultations have reportedly centered on disciplines (i) to eliminate the export subsidy element of export credits; (ii) to address the monopoly power of state trading enterprises. However, Canada, Australia and New Zealand complained that this could be too onerous for them. The G20 expressed that developing country member should be exempted from any further disciplines on their state trading enterprises, including monopoly powers and (iii) to avoid the commercial export of food aid. This was supported by the EU.

The Africa Group said there should be effective SDT provisions for LDCs and NFIDCs, and exemption for developing countries from additional disciplines on state trading enterprises due to their developmental role.