GENEVA--Top trade officials from the United States, the European Union,
Brazil, India, and Australia ended two days of meetings in Paris July 11
claiming some progress in efforts to finalize a framework agreement by
the end of July for advancing the stalled World Trade Organization talks
on agriculture.
At the same time, the ministers said substantial work remains on
overcoming differences in the three negotiating "pillars" of market
access, domestic support, and export competition. "There is still a
considerable way to go," U.S. Trade Representative Robert Zoellick
declared at the end of the meeting.
Officials said the meeting of the so-called "Five Interested Parties"
(FIPs), which has taken a lead role in the framework negotiations,
failed to deliver any breakthroughs in the last ministerial gathering of
the group before a crucial July 27-28 meeting of the WTO's ruling
General Council, where the framework is due to be finalized.
Difficult Decisions Pushed Off Until Later
As a result, the officials said, difficult decisions on several
outstanding issues are likely to be pushed off until after July, with
delegations now searching for more general language in the framework
that could safeguard WTO members' positions.
One example is in the area of market access, where WTO members were
expected to decide on a formula for reducing tariffs on agricultural
imports. The FIPs countries--as well as most WTO members--generally
agree that the formula should utilize a "tiered" or "banded" approach
under which higher tariffs would be subject to deeper reduction
commitments.
But the FIPs members have been unable to agree on the reduction formula
that should apply under each tariff band or, more importantly, what
exceptions should be made for sensitive products of both developed and
developing countries.
India's commerce minister Kamal Nath warned that any deal in market
access would need to take account the specificity of Indian agriculture,
in particular its millions of small farmers. Otherwise, he warned, the
framework "plane cannot take off."
Delay for Domestic Support Pillar
Another area where a decision is likely to be put off until after July
is under the pillar of domestic support, where the United States and the
EU have been pushing for an amendment to the so-called "blue box" which
would allow them to shift some of their farm subsidies out of the "amber
box" of spending-capped, trade-distorting subsidies.
The United States in particular wants to shift billions of dollars in
countercyclical payments from the amber box to the blue box, which is
currently exempted from any spending limits, in exchange for sharp cuts
in other amber box support. Countercyclical payments are used to
compensate U.S. farmers when global commodity prices fall below a
government-fixed target price.
But facing pressure from its domestic farm lobby, Brazil has been
increasingly reluctant to accept any changes to the blue box without
additional disciplines on spending and the programs themselves. One
senior official involved in the talks said it was now expected that
whether and how to reform the blue box would be addressed in the
post-July phase of the negotiations.
In a letter addressed to WTO agriculture negotiating group chairman Tim
Groser July 9, the Washington-based Institute for Agriculture and Trade
Policy, a group critical of U.S. farm subsidies, warned that an
expansion of the blue box to include countercyclical payments "will
prolong the existence of farm programs that are universally acknowledged
to distort world markets by contributing to export dumping the sale of
agricultural commodities at less than cost of production prices."National Affairs Bureau:
