International Trade Daily | October 5, 2001 | By Daniel Pruzin
GENEVA--The chairman of the World Trade Organization's General Council has put forward the outlines of a possible compromise text for the continuation of talks on agriculture within the context of a new trade round.
Chairman Stuart Harbinson of Hong Kong presented a select group of WTO members Oct. 4 with his initial ideas for fleshing out the heading on agriculture in his draft ministerial declaration circulated Sept. 26. The ideas were presented in oral form to a so-called "green room" meeting on agriculture which included representatives from the United States, the European Union, Japan, and the 18-member Cairns Group of agricultural exporting nations.
Among other things, Harbinson suggested that members agree to launch comprehensive negotiations on agricultural trade with three specific goals: "substantial improvements" in market access for farm exports; reductions of export subsidies, "with a view to phasing out" all forms of such subsidies; and "substantial reductions" in trade-distorting domestic subsidies.
Harbinson, whose position gives him a key role in the preparations for Doha, is expected to circulate a fuller text on agriculture for the ministerial declaration sometime the week of Oct. 8, taking into account the comments made on his initial suggestions.
The draft declaration was prepared by Harbinson for the WTO's fourth ministerial conference in Doha, Qatar, next November, where the organization hopes to launch a new round of trade talks. The text sets out a "future work program" covering agriculture, services, market access for nonagricultural products (i.e. industrial tariffs), trade-related aspects of intellectual property rights (in particular protection of geographical indications), trade and investment, trade and competition policy, transparency in government procurement, trade facilitation (customs procedures and other formalities which act as barriers to trade), WTO rules (antidumping and countervailing measures as well as disciplines applying to regional trade agreements), amendment of WTO dispute settlement rules, trade and environment, electronic commerce, and other development-related issues.
Exporters v. Home-Growers
The heading on agriculture was left deliberately vague because of continued differences within the membership over the mandate and scope of the farm trade talks. Negotiations on agriculture were launched in early 2000 as mandated under Article 20 of the WTO's Agreement on Agriculture, which calls on members to continue the reform process with the long-term objective of substantial progressive reductions in farm support and protection.
The EU, Japan, and other members with extensive farm subsidy programs such as Norway, South Korea and Switzerland argue that the negotiations should continue under the Article 20 mandate, which they note also requires negotiators to take account of "non-trade concerns." Such non-trade concerns, they argue, include issues like rural development, protection of the environment and food security that preclude farm products from being treated like other goods under WTO rules.
The Cairns Group counters that the negotiating mandate must be expanded in the new round to cover specific goals such as the eventual elimination of export subsidies, goals which were spelled out in a final draft text on agriculture for the WTO's failed 1999 Seattle ministerial meeting. Officials from Cairns Group member Brazil have warned that if the negotiating mandate were not broadened beyond Article 20, Brazil would only support the launch of a narrow round focusing on agriculture and services.
Attempt at Middle Ground
Harbinson's proposal attempts to strike a middle ground. While going beyond the language of Article 20, the General Council chair rejected the Cairns Group's call for the elimination of export subsidies (as spelled out in the draft Seattle text) in favor of "phasing out" such subsidies. He also proposed that members work towards substantial reductions in trade-distorting domestic subsidies, a qualifier that was missing from the Seattle text.
On the other hand, Harbinson offered brief language on non-trade concerns stating that such concerns "will be taken into account in the negotiations" as provided for in the Agreement on Agriculture. He also proposed that special and differential treatment of developing countries "shall be an integral part of all elements" of the negotiations.
The concise language in both areas represents a step back from the Seattle draft, which included specific references to non-trade concerns (environmental protection, rural development, food security and food safety) as well as a commitment by members to incorporate special and differential treatment in their schedules of concessions and commitments as well as in the rules and disciplines under negotiation.
Officials attending the green room meeting said the EU criticized the "phase out" language on export as well as the sparse language on non-trade concerns and special and differential treatment.
One EU official said there was essentially no difference between a commitment to "phase out" export subsidies and to "eliminate" them, which the EU opposes. "It's too close for comfort," commented the official.
EU Targets Export Credits
The EU also criticized the absence of a specific reference to export credits under the heading on export subsidies. The EU is the major user of export subsidies, accounting for 90 percent of the total provided by developed countries within the Organization for Economic Cooperation and Development (OECD). The United States on the other hand provides almost half of the export credits given by OECD nations; the EU argues such credits have a notably distorting impact on trade, which Washington denies.
Developing countries joined the EU in expressing disappointment with the language on special and differential treatment. The EU has backed developing country calls for special consideration of their needs in order to win their support for the broad round of negotiations favored by Brussels.
Cairns Group member Australia countered that the proposed language on export subsidies fell short of their expectations. Officials from the United States, which has leaned towards the Cairns Group position despite a sharp increase in U.S. farm subsidies over recent years, were unavailable for comment.
"This is a very sensitive issue," a senior U.S. trade official declared Oct. 3 prior to the green room meeting. "Our feeling is that finding common ground on agriculture is best done in a quiet and informal way rather than through press releases and putting negotiating proposals on the Internet."
"I can assure you that we are very seized with the issue of agriculture and the need to pull together an ambitious text on agriculture," the U.S. official added.
Despite the criticisms from Brussels, the EU official said they were not rejecting Harbinson's initial ideas out of hand and that they were a good basis for further discussions on the issue.
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
