Inside US Trade / February 9, 2001 / Vol. 19, No. 6
In advance of a March stocktaking on agriculture negotiations, World Trade Organization members met informally this week to discuss the next phase of talks which is likely to involve more in-depth analysis of the key issues that have been discussed preliminarily through review of proposals tabled by various countries.
That review process also continued this week, with discussions becoming heated over objections to Japan's proposal which is seen as rolling back current market access commitments. Developed and developing nations were also split in their views of India's paper. Review of country proposals will continue March 22-23 in advance of the stocktaking, which has been pushed back to 26-28 March.
Fear that March stocktaking exercises in both services and agriculture negotiations will reveal that prospects are dim for trade liberalization absent a broader round is one motivating factor for broader negotiations, WTO Director General Mike Moore said in a speech in Australia this week.
"[T]hey pause for stocktaking next month. This pause could easily become a deadlock," Moore said. "A deadlock would deal a big blow to chances of launching a new round soon. Positions would harden. Tempers might flare. The progress made in the past year at improving relations between the WTO's 140 members would be jeopardized."
However, the informal meeting revealed an approaching consensus that the post-stocktaking phase would center on more in-depth discussion of the three main areas -- domestic support, export competition and market access, with either simultaneous or separate discussion of non-trade concerns and special treatment for developing countries. Such discussion could lay groundwork for compromises and commitments by developing rules for domestic support or formulas for reduction of tariffs.
The U.S. proposed a one-year deadline for this second phase, although Japan and Korea were tentative about this idea, saying it should be reconsidered after the upcoming ministerial conference in Qatar.
The informal meeting also saw discussion of whether agriculture negotiations in a possible new round would be based on Article 20 of the Agriculture Agreement or an agenda that sets higher targets for reform of agriculture trade, as Brazil and other countries argued. However, the fight over the mandate for agriculture negotiation was at the center of the breakdown of talks in Seattle last year, and countries are increasingly hesitant to push for an overly ambitious agenda that effectively "pre-negotiates" the outcome. Switzerland, Norway and Japan said that trying to change the mandate would unravel progress made in the last year.
In the review of countries' proposal this week, Japan's paper came in for strong criticism, with the U.S. accusing Japan of backtracking on liberalization. In particular, the U.S. criticized indications in Japan's paper that it wanted to reduce market access by reducing the size of tariff-rate quotas. In addition, Japan's proposal calls for a new safeguard measure for seasonal and perishable agricultural products that could be quickly imposed.
The harshest criticism came from Uruguay, which said the Japanese proposal was so bad it was not worth considering, labeling it irrational, absurd and self-seeking. This drew a rebuke from Japan which said characterized the remarks as sheer slander. Switzerland, the European Union and Norway, who all believe that agriculture's "multifunctional" role cannot be addressed by the market alone, rallied to Japan's defense.
By contrast, discussion of the EU proposal was more muted, with some of the Cairns group of agricultural exporters calling constructive the EU proposal that measures to address non-trade concerns in a targeted and non-trade distorting manner.
A proposal by small island nations for the maintenance of preferential trade market access for the exports on which they are dependent, drew sympathetic responses but calls from some Latin American producers that these special arrangements would have to be phased out. Mauritius, one of the authors of the paper, said it would need such arrangements in perpetuity. These countries have preferential access to developed countries, especially for such products as sugar and bananas.
India's proposal, which calls for special treatment for developing countries while asking industrialized nations to make substantial cuts in tariffs, export subsidies and domestic support (Inside U.S. Trade, Feb. 2, p.19), drew support from developing countries. However, Cairns member New Zealand, the U.S. and the EU joined in criticizing the proposal, saying developed countries should not be alone in liberalizing their agricultural regimes. The EU objected to India's proposal that conditioned tariff reductions by developing countries on reductions in domestic support by rich countries.
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