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TRADE: WTO Agriculture Talks – So Much to Do, So Little Time

Gustavo Capdevila

GENEVA, Jun 5 2008 (IPS) - While they are not enduring the acute crisis that is affecting talks on industrial products, negotiations on agriculture at the World Trade Organisation (WTO) are still facing considerable difficulties in reaching agreement on the trade liberalisation to which the Doha Round aspires.

“At the moment, I am not predicting that (the suspension of the industrial products negotiations) makes any changes to the agriculture talks,” the chair of the committee discussing opening of trade in agricultural products at the Doha Round, Crawford Falconer, told IPS.

“But we’ll see over the next few days whether it does for some of the delegations,” he said.

Falconer was referring to Tuesday’s decision by the chair of the Negotiation Committee on Non-Agricultural (Industrial Products) Market Access, Don Stephenson, to interrupt its sessions because of setbacks in the discussions over the previous few days.

However, the suspension of talks on industrial tariffs will affect talks on agriculture because it will prevent, or at least postpone, the “horizontal process” – the WTO term for the next phase, when the 152 states party must balance and reconcile the various concessions granted in these two critical areas.

In spite of the standstill of the industrial negotiations, the agriculture debates will continue next week after having achieved “incremental progress” in the last few days, Falconer said.

“I think the agriculture talks are doing all right, from the point of view of the meetings, the efforts being made by the chairperson, the exchange of information and the clarity of the negotiating positions,” said Alberto Dumont, the head of the Argentine negotiating mission.

“But I also think it is taking a very long time, and the same is true of the entire round,” he said. The main thing is to know how many issues will remain pending for ministers to resolve in the horizontal process, he added.

If the ministers are presented with 25, 30 or 40 unsolved issues, “the negotiations will be endless,” he said. In his view, solutions for differences must be found at the Geneva discussions between heads of missions and other expert diplomats, so that only crucial political questions are left up to the ministers.

From Paris, in a speech on Thursday before the Council of Ministers of the Organisation for Economic Cooperation and Development (OECD), WTO Director General Pascal Lamy again expressed the extreme urgency of completing the negotiation process begun in Doha, the capital of Qatar, in 2001.

Lamy told representatives of the richest nations in the world that he hoped that the “modalities”, as the parameters which will condition the final stage of the negotiations are called, would be agreed by Jul. 1. The final stage will determine the actual percentages and volumes of trade concessions.

To achieve this goal, Lamy called for “an intensive engagement by senior officials in Geneva” over the next two weeks.

In agriculture alone, this aspiration represents a huge effort, because in spite of the better atmosphere in this area in comparison with the industrial negotiations, there are still points of conflict to be dealt with, which will require lengthy discussions, a trade source told IPS.

Agreement on formulas for reducing import tariffs, and on different types of subsidies, two critical aspects of the agriculture talks, is still a long way off, the source said.

Under the umbrella of tariff formulas is the thorny subject of sensitive products. Rich countries can be exempted from reducing tariffs for a fixed percentage of the products they import, in exchange for accepting a tariff-free import quota of those protected products.

In addition, the agriculture committee must discuss special products and special safeguard mechanisms in its meetings next week. The Group of 33 (G-33), now comprising 46 developing countries, is calling for “another revised draft text” that more nearly approaches its wishes in these two matters.

Like sensitive products for industrialised countries, special products are imported goods of critical importance for developing countries, that also need tariff protection. The special safeguard mechanisms, in turn, allow poor countries to defend themselves from severe volatility in the prices or volumes of imports.

The G-33 has firmly stated that “any ‘horizontal process’ shall only proceed once we all have the same level of comfort and confidence on all the agriculture issues,” especially special products and safeguard mechanisms.

Then there are two issues still being debated that specifically affect the European Union: tropical products, and the erosion of trade preferences benefiting the bloc’s former colonies.

Two further questions have arisen during the debates: the food price crisis, and the approval by the U.S. Congress of the Farm Bill, which is waiting to be signed into law.

Delegates are using the issue of food prices to bolster their particular positions, either by demanding greater flexibility in order to expand agriculture in developing countries, or, from the rich world perspective, to argue that such exceptions would harm agriculture, the trade source said.

As for the U.S. Farm Bill, two major groups at the agriculture talks, the G-20 made up of the main emerging countries, such as Brazil, China and India, and the Cairns Group of agricultural exporters, claim it is “a step backward” for trade liberalisation.

They called on the U.S. to show “leadership by committing to substantial and effective cuts in subsidies” for its farmers.

With this plethora of issues and perspectives on the agriculture committee’s agenda, Falconer accepted the possibility that another draft agreement should be written, to incorporate some of the diverse aspirations.

Such an undertaking, involving preparing and examining the text, would take at least two weeks, which would conspire against WTO Director Lamy’s hopes of having the modalities agreed by the end of June.