BRIDGES Weekly Trade News Digest / Vol. 5, Number 11
Following a full year of deliberations, the first phase of the WTO mandated multilateral agriculture negotiations formally concluded on 23 March, marking the end of general discussions by the Committee on Agriculture. The Committee is now preparing to embark upon the more arduous task of technical discussions in the next phase of the negotiations.
Unlike the outset of the negotiations, however, the 22-23 March meeting saw a proliferation of African country participation demonstrating the importance African countries place on their agriculture sectors. Of the 16 proposals discussed, 8 of these were submitted by African countries -- Namibia, Senegal, Kenya, Democratic Republic of Congo, Nigeria, Egypt, Morocco, and the African Group. Moreoever, of the 44 total proposals submitted to the negotiation, 10 (23%) were submitted exclusively and independently by African countries, while Uganda, Zimbabwe, Madagascar, Mauritania and South Africa were listed as joint sponsors on several group proposals.
India's "food security box"
The negotiation began with discussion on India's proposal for a "food security box" (see BRIDGES Weekly, 30 January 2001; http://www.ictsd.org/html/weekly/story1.30-01-01.htm). In the proposal, India asserts that the objective of a new agriculture agreement should be to allow measures, and design supportive disciplines, which would guarantee conditions of food security for developing countries. In general, the Indian proposal received favourable comment from other developing countries which also emphasised food security as a core objective. Yet, the Indian proposal has drawn criticism from several countries which argue against a two tiered system of rights and obligations. Such an approach they argue runs counter to the logic of the WTO which advocates a single set of rules with derogations permitted for qualified developing countries.
In contrast, several developing countries have consistently argued that the only way to rebalance the inequities of the present agriculture agreement is to discipline developed country subsidies and border measures while enhancing their own agriculture production capacity. Doing so will allow developing countries to more fully realise the trade benefits of their comparative advantage in agriculture production.
State-trading enterprises and export credits
Also discussed were two specific proposals, one from Mercosur on state-trading enterprises (STEs) and one from a developing country coalition -- Mercosur, India, Malaysia, Costa Rica, Guatemala and Chile -- on export credits. On STEs, Mercosur's message was clear. State trading enterprises possess monopoly import/export rights and distort trade in favour of domestic producers. In its proposal, Mercosur calls for disciplines on STEs. Both the US and EU were in favour of Mercosur's proposal. In response, Canada, Australia and New Zealand -- each users of STEs trade management schemes -- argued that the use of STEs is no different than the distorting effects of cross-subsidisation common in private trading practices. They argue the main issue should not be one of "ownership", but of the trade effects of cross-subsidisation.
On export credits, the "Mercosur-plus" group pressed to reinstate export credit disciplines in the new agreement. It asserts that Article 10.2 of the agriculture agreement -- an existing article in the agriculture agreement requiring that countries develop internationally agreed disciplines on a export credits -- failed to achieve its purpose of curbing their use. The US -- the largest user of export credit schemes -- argued that export credit disciplines are being negotiated at the Organisation for Economic Cooperation and Development in Paris and should continue in that forum. Export credit schemes are government-backed financing arrangements which facilitate the export of commodity surpluses mostly to developing county importers.
Phase 2 Work Plan Approved
On 27 March, the WTO Committee on Agriculture approved a work plan for the next phase of the agriculture negotiations. As with phase 1, negotiating sessions -- officially Special Sessions of the Committee on Agriculture -- have been scheduled to coincide with regular meetings of the committee in September, 2001; December 2001; and February 2002 with a formal stock-taking exercise scheduled for March 2002. Three informal Special Sessions will be held in May and July 2001 and in February 2002.
The content of the work plan, recommended by the Committee Chairperson, Peruvian Ambassador Jorge Voto-Bernales, is consistent with the phase 1 proposals and will cover: tariff quota administration, tariffs, amber box subsidies, export subsidies, export credits, state-trading enterprises, export restrictions, food security, food safety, and rural development.
This list however is not exhaustive. It refers specifically to those topics to be covered in the first two or three meetings and is meant only to guide Members' preparations as they look forward to subsequent meetings. As phase 2 proceeds, Members will be permitted to add to this list of topics. For example, Norway has said it will seek to include "environment" in future sessions.
The work plan furthermore specifies that special and differential treatment will be an integral part of all elements of the negotiations.
"Second Phase Of Ag Talks To Begin," WASHINGTON TRADE DAILY, 26 March 2001; "Work Plan Agreed For Talks' 'Phase' 2," WTO PRESS RELEASE, 27 March 2001; ICTSD Internal Files.:
