WORLD TRADE ORGANIZATION
G/AG/NG/W/103
19 January 2001
(01-0341)
Committee on Agriculture
Special Session
Original: English
WTO Negotiations for Continuation of the Reform Process in the Agricultural Sector
Proposal by Poland
I. INTRODUCTION
The Agreement on Agriculture (AoA), achieved after long and difficult negotiations of the Uruguay Round and implemented in 1995, has been a foundation for gradual reform of the agricultural sector. The long-term objective of this reform is to create an environment for development of a fair and market-oriented agricultural trading system.
All signatories of the WTO Agreement agreed also to undertake negotiations for continuation of the reform process in agriculture. The mandate for these negotiations can be found in four paragraphs of Article 20 of the AoA. The first three paragraphs of this Article constitute an obligation to consider the following aspects in the course of further negotiations:
The fourth paragraph of Article 20 calls upon the WTO Members to undertake decisions what further commitments are necessary to achieve those objectives.
It is fair, therefore, to observe that Article 20 of the AoA determines not only objectives for negotiations but also contains a clear obligation to respect specific, enumerated above, elements concerning the way to reach those objectives. Poland believes that answers to a questions "where" and "which way" determine the answer for the question "how" - which is in the center of this negotiations.
Poland is convinced that the results of the Uruguay Round should be the starting point for further negotiations and that a continuation of the reform process requires adherence to all above mentioned paragraphs of the Article 20 of AoA.
Poland attaches a special importance to a detailed analysis of the current situation in the agricultural trade. Statistics illustrating the actual position of every WTO Member on World trade chart and experiences gained during six years of the implementation of the reform should be an indispensable part of this analysis. While embarking on new negotiations, the Members should have a clear view which factors influencing the current trade must be taken into account during development of modalities for future commitments.
The negotiations of the Uruguay Round were conducted in the framework of "three pillars" with recognition of the necessity of special and differential treatment of developing and least-developed countries. It is evident that further progress of the reform and an increase of the scope of concessions require that all concerns stemming from paragraphs: a, b and c of Article 20 of the AoA should be taken in to account on equal basis.
II. EXPORT SUBSIDIES
Export subsidies reduction commitments are among the most important achievements of the UR negotiations and laid ground for the common expectation, that decreasing share of subsidized products in the global market would successfully contribute to an improvement of the agricultural trade.
A different forecasts, published shortly after completion of the UR predicted, for example, an increase of prices for almost all important agricultural products (OECD, Agricultural Outlook: 1995 Edition). The current statistics illustrate however, that prices were at the maximum level in years 1995-1997 and declined since then (WTO, G/AG/W/42 Rev.3).
This situation is a reason for disappointment, especially for those Members who have marginal share in world exports of agricultural products and who have a limited possibility to reduce prices for their products because of specific conditions.
It can be also observed that reduction commitments in Article 9 of the AoA cover only six categories of measures and do not exhaust all possibilities of export support. Rather weak and limited impact of Article 10, aimed to prevent circumvention is yet another important factor contributing to current situation.
Poland proposes:
The WTO Members should undertake negotiations to establish complete list of all forms of subsidies, including specific forms of food aid, export credits and State Trading Enterprises activities.
The WTO Members should undertake commitments with regard to all forms of export subsidies.
A further reduction of export subsidies should be implemented according to the following scheme:
III. DOMESTIC SUPPORT
Various elements of domestic agricultural policies applied by the WTO Members with the aim to provide support for farmers are viewed as measures having a negative impact on trade but also as positive factors, indispensable to maintain domestic agricultural sector. Generally speaking, implementation of domestic support commitments is carried by the Members in a timely fashion and without greater controversy.
At the same time, it can be also observed that implementation of domestic support commitments, apart from a generally positive side, caused also considerable reduction of financial means available to producers of agricultural goods.
This bears several different implications, for example: one of the almost immediate effects of decline in production profitability is a restriction or resignation from production. Since, this process cannot be left unattended; governments are looking for various elements of domestic policies to meet challenges stemming from this new situation.
In Poland, where implementation of the Uruguay Round commitments coincides with the period of systemic transformation, the problem of production decline in agriculture is exceptionally intense. On the other hand, because of great significance of this sector for a reasons of employment and because of the fact that it supports livelihood of a large part of the population, any measures in this area should be approached very carefully. An additional problem is stemming directly from the pioneering character of changes undertaken in the transformation process and is linked to the lack of experiences in this area and difficulties with preparation of evaluation of the impact of various transition measures.
For these reasons, a certain flexibility is necessary, as far as the scope and pace of further reduction of the AMS levels specified in Members schedules is concerned.
It is also indispensable to assure the possibility to implement appropriate measures to mitigate effect of profitability decline for every Member.
Poland is prepared to undertake negotiations for further reduction of bound, specified in the schedules, levels of the AMS according to the UR formula.
Poland proposes to assure the right of every Member to introduce and maintain "blue box" payments.
IV. MARKET ACCESS
The market access commitments were developed, generally speaking, in the strict connection with results of negotiations in the other pillars. The negotiators chose a formulas of current and minimum market access opportunities and tariffication with the gradual reduction of border protection with the aim to assure, first of all, a continuation of the existing trade relations and then to enlarge access to the most protected markets.
Even first analyses made in this area were far from enthusiastic. There was quite a common concern that those commitments would not meaningfully improve situation of exporters from countries with a small share in the world trade. A significant number of quotas reserved for specific countries and a great flexibility in administration of the quotas opened for all exporters, were not considered as positive elements for entrance of new suppliers into certain markets.
Today, after six years of implementation of the reform, we can observe that statistics of imports and exports of agricultural products (e.g. G/AG/NG/S/11) confirm those concerns. The world exports of agricultural products are executed to a large extend by a limited number of countries. The deepening of the trade deficit is yet another cause of disappointment and concern in many other countries.
Poland believes that current negotiations should bring solutions leading to a more balanced world trade. This would facilitate the increase of trade share for even greater number of the WTO Members and prevent on the one hand a further concentration of exports and, on the other hand, increase of trade deficit.
Poland proposes:
WTO Members should undertake negotiations with the aim to improve access to current access quotas and minimum access quotas.
For unused parts of current and minimum access quotas Members should agree to reduce tariff rates by 50%. These parts of quotas would be open to products originating in least developed countries and net importers among developing countries and among countries in transition.
Further reduction of final bound tariffs would be conducted according to the formula adopted in the Uruguay Round.
Article 5, which is an integral part of the AoA, will not be renegotiated.
V. NON-TRADE CONCERNS
The continuation of the reform process could have a negative impact on ability of specific countries to pursuit internal economic and social polices in the areas where involvement of the state plays a significant role. On the other hand, diversity of types of agriculture among the WTO Members would create necessity for various adaptation measures. The aim of the negotiators should be to develop the framework which would ensure all the WTO Members that those functions of their agriculture of vital interest to them, could be preserved.
Following functions of agriculture should be recognized:
Poland propose:
The WTO Members recognize the right to protect vital elements of the internal policies directly linked to the NTC. The WTO Members agree that they have the right to pursue these policies and for that purpose a certain flexibility in the implementation of selected commitments in the areas of domestic support and market access, depending on specific situation of the Members, would be allowed.
VI. SPECIAL AND DIFFERENTIAL TREATMENT
Poland considers special and differential treatment as an indispensable element of negotiations and continuation of the reform process.
In Poland's view, it is essential to provide an opportunity for the least developed and many developing countries to apply a flexible approach while undertaking new commitments and to benefit from preferential treatment in the market access arrangements in other countries at the same time.
Poland is ready to participate in all activities to assess current, dissatisfying situation of the least developed countries and to develop appropriate measures.