Inside US Trade / Vol. 18, No. 40
The U.S. is seeking a working party in agriculture negotiations at the World Trade Organization to rework definitions of what domestic support programs would be exempt from WTO disciplines, U.S. special agriculture negotiator Greg Frazier told reporters last week.
Clearer definitions of what domestic support programs are exempt are necessary because new programs in the 1996 farm bill are not addressed in current disciplines, Frazier said. The U.S. tabled a proposal in June that would break domestic support into two categories: support that is considered not at all or only minimally trade-distorting, which would be exempt, and trade-distorting support, which would be subject to reduction commitments. The proposal alters the current system that includes a third category, a blue box, which exempts certain trade distorting support if it is tied to production restraints.
Industry sources said the U.S. is concerned in particular that emergency supplemental payments made under the Agricultural Market Transition Payments (AMTA) program over the last two years be classified as exempt. USDA had raised concerns last year that those payments could run afoul of the Agriculture Agreements' section 6(c) because they are tied to low commodity prices (Inside U.S. Trade, July 2 1999, p. 8).
The definition of which products are exempt is one of the key questions the Cairns group of agriculture exporters have about the comprehensive agriculture proposal the U.S. tabled before the June session of talks, Australia Deputy Trade Secretary David Spencer told reporters separately.
The Cairns group tabled its own domestic support proposal last week, calling for product specific limits on trade- and production-distorting support and a 50 percent reduction in such support in the first year of implementation.
Both those proposals drew fire from the European Union's Deputy Director General for Agriculture David Roberts in comments to reporters last week.
The call for a steep 50 percent reduction goes beyond the mandate for negotiations under the agriculture agreement's article 20, which has as its objective "substantial progressive reductions in support," Roberts said. The demand for product specific limits unduly limits governments' flexibility in setting internal policy and gives "credibility to arguments that the WTO is becoming a non-elected world government."
Roberts also said the EU could not agree with proposals by both the Cairns group and the U.S. that agriculture export subsidies be eliminated.
"We do indeed accept that export subsidies should be reduced but not eliminated, but only in conjunction with disciplines on export credits and state trading enterprises," Roberts said.
On the issue of accepting disciplines for state trading enterprises, which is called for in both the EU proposal on export competition and the U.S. comprehensive proposal, Australia's Spencer acknowledged that the Cairns group did not have a unified position, since all its members did not have such single marketing boards.
Australia and Canada, which use such boards, would be "happy to address the trade distorting aspects [of their operations] if they are proved," Spencer said. But allegations that state-trading enterprises are untransparent and distort trade have never been proved, Spencer said.
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