A meeting last weekend of 20 major economic powers in Washington gave a fresh impetus to the troubled Doha Round of global trade talks by agreeing to strive for a blueprint deal by the end of 2008 (see related article, this issue). But the extent to which that rhetoric will translate into actual movement in the negotiations remains to be seen.

Negotiators are expecting WTO Director-General Pascal Lamy to call a December ministerial meeting aimed at reaching agreement on the formulas for tariff and subsidy cuts for agriculture and industrial goods, and exceptions to them. Although no date has been set, many suggested that a meeting could be held around the 10th, with some suggesting dates a few days later than that.

Any such deal would have to be formally adopted by the WTO’s General Council, which is scheduled to begin a two-day meeting on 18 December – shortly before trade negotiators stop work for the winter holidays. Sources suggested that a new draft text would have to be issued some time around 28 November by the chair of the agriculture talks, Ambassador Crawford Falconer (New Zealand), in order to allow policy-makers enough time to analyse it before ministers arrive in Geneva.

Onus on 20 countries

Falconer has challenged negotiators to show flexibility in their positions in order to allow him to produce a new draft. “I certainly don’t feel…I have the basis to do a revised version of the July text,” he warned an informal meeting of the full membership on 17 November.

Falconer told Members that he expected the 20 countries that had met in Washington to show signs of new flexibility very quickly. “I am looking forward to hearing this afternoon, at least from those 20 Members, the concrete changes in their positions that they had foreshadowed to their heads of government,” he announced wryly, before acknowledging that it may take negotiators “a day or two” to share information on any new room for manoeuvre they may now have.

Changes in position would have to be clear to him by “no later than the end of next week” if the year-end target date was to be met, Falconer cautioned.

He indicated that he was ready to begin intensive consultations immediately, and continue these in the week of 24 November. Members were also expected to meet within coalition groupings. Falconer will also hold an informal meeting of the full Membership on Friday afternoon.

The likelihood of an imminent ministerial meeting appears to have galvanised much-needed momentum in the Doha talks, which as recently as last week seemed to be juddering to a near halt. “It now seems inevitable that we’ll have a meeting,” said one delegate, admitting that, before the weekend, the likelihood had seemed nearer 60 percent.

Delegates suggested that the severity of the economic situation - the biggest financial crisis for eight decades, and the real risk of widespread recession in 2009 – had focused minds on the need for a Doha trade deal. One pointed out that, when governments are obliged to take such major steps as nationalising their banks, they may find it easier to make some concessions that at other times might seem too painful.

Five key issues

Delegates reported that they suspected Falconer was particularly awaiting signs of movement on around five key outstanding issues. He had already identified four of these in an August report to the Membership, written after the July mini-Ministerial collapsed: the special safeguard mechanism, tariff rate quota creation, tariff simplification and cotton. A fifth issue has also surfaced more recently: the number of permitted ‘sensitive products’ which developed and developing countries will be able to shield from tariff cuts in exchange for expanded import quotas.

Special safeguard mechanism still deadlocked

The special safeguard mechanism, which developing countries will be able to use to raise tariffs temporarily in the event of import surges and price depressions, remains highly controversial. Developing countries in the G-33 have insisted that an effective and usable mechanism to safeguard their poor farmers is a precondition for a Doha Round deal, while exporters in both developed and developing countries have argued that any such safeguard must not interfere with ‘normal trade’. The issue was widely seen as a major cause of the mini-ministerial breakdown in July (see BRIDGES Weekly, 7 August 2008, http://ictsd.net/i/news/bridgesweekly/18034/).

Since September, Members have discussed various options that could lead to convergence on the issue, such as modifications to the maximum number of months that countries would be allowed to apply the safeguard, or the option of prohibiting successive impositions of the safeguard until a given period of time had elapsed. However, no clear consensus has emerged on these options, said sources familiar with the talks.

Sensitive products: Japan and Canada seek more flexibility

Two developed countries, Japan and Canada, were reportedly seeking greater flexibility in the negotiations on the number of sensitive products that they would be allowed. Members currently are allowed to designate four percent of tariff lines as sensitive, provided tariff quotas were expanded accordingly; those with over 30 percent of tariff lines in the top band would be allowed another two percent, provided again that Members compensate for this through quota expansion. Sources indicated that Japan was trying to obtain the right to designate an additional two percent of tariff lines as sensitive. Canada was also reportedly seeking to expand the flexibility available to them on sensitive products, in a move that was also resisted by exporting countries.

TRQ creation

Several trade sources agreed that, despite exporters’ initial demands, there appeared now to be an emerging consensus that some limited form of tariff rate quota (TRQ) creation would be allowed. It remained unclear, however, what form this would take. Falconer had previously outlined four categories of products for which new quotas could conceivably be created (see BRIDGES Weekly, 23 October 2008, http://ictsd.net/i/news/bridgesweekly/31623/). One delegate suggested that Falconer’s new text could propose a figure for the number of tariff lines for which TRQ creation could be allowed.

Tariff simplification

Tariff simplification - the conversion of ‘specific tariffs’, which are set at a precise level, to ad valorem tariffs, which are expressed as a percentage of the product’s value – has long been controversial amongst Members. Trade sources reported that some exporting countries were exploring new options that tried to move away from the issue of the percentage of tariff lines that needed to be converted to ad valorem equivalents (see BRIDGES Weekly, 23 October 2008, http://ictsd.net/i/news/bridgesweekly/31623/).

Cotton

While the draft modalities text on cotton currently reproduces the proposal of the C4 group of African cotton producers that seek ambitious reductions in developed country subsidies, rich countries have so far failed to make alternative proposals. The issue is widely seen as another make-or-break issue for the round.

Looking forward

Falconer indicated that he would be willing to meet with delegates to discuss tariff simplification, as well as other outstanding issues on domestic support or export competition. He encouraged Members to ensure representation at a senior level, warning that he may cancel meetings if there was an insufficient quorum of capital-based officials. Trade sources also indicated that another ‘green room’ meeting, with around 20 to 25 senior officials, could be held this Sunday, to be followed by more intensive meetings all next week.

Explaining the sudden push for a deal, some delegates pointed to the depth of the economic crisis; others suggested that some saw a political window of opportunity in the time between the US elections earlier this month and 20 January 2009, when President-elect Barack Obama takes office. However, others also pointed to the crucial role played by Falconer, who is returning to New Zealand at the end of the year. “People will regret his departure” said one developing country delegate, noting that it would be hard to find a replacement who could display both the listening skills and technical knowledge of the current agriculture chair.

ICTSD reporting.

Of  the  nine  countries  selected  for  the  series of  country  studies,  Mauritius  is  not  only  the smallest  one  but  also  possesses  very  specific characteristics  that  may  apply  to  a  range  of developing countries. It is therefore considered appropriate to have an elaborate presentation of the situation of agriculture in Mauritius and the challenges  facing  it  so as  to better understand the impact of the Falconer Text on Mauritius.

With the end of the bottom-up approach, in which the WTO (World Trade Organization) Members defined the parameters for agricultural modalities, the top-down approach, based on documents prepared by the chair of the Special Session of the Committee on Agriculture, has prevailed in negotiations. Based on the last version of the agricultural modalities document of July 10th 2008 (referred to in this document as the Draft Modalities), this paper seeks to:

(i)    Evaluate the implications of commitments set forth in the modalities on domestic support and market access for Brazil’s agricultural sector: in other words, how do the proposed disciplines affect applied levels of domestic support and tariffs?

(ii)    Discuss whether Brazil’s offensive interests will be satisfied. Are the disciplines proposed for export competition, domestic support and market access for Brazil’s agriculture sector likely to create trade opportunities for Brazilian agribusiness exporters? As most of the parameters for the three pillars are already well defined in the last Draft Modalities, this paper provides a critical analysis of the level of ambition within the document.

In 1992, at the end of the Uruguay Round negotiations, the EU instituted reforms, significantly lowering support prices for grain and beef and compensating farmers by paying them directly. Lowering prices enabled the EU to allow the volume of subsidized exports to be reduced through reductions in surpluses.

The EU has subsequently continued its reform process. In the 2000 reform, it reduced the support price of cereals by 15 percent, and in the 2003 reform reduced the support prices on dairy products, with the price of skimmed milk powder being lowered by 15 percent and that for butter by 25 percent.

In the 2005 reform, the EU finally reduced the support price for sugar (previously unchanged for 40 years) by 36 percent, and switched to direct payments corresponding to 64 percent of the price reduction. For these reasons, the EU could make a commitment to eliminate export subsidies for sugar, dairy products, cereals and beef, and could tolerate 100 percent tariff caps in the current Doha Round of negotiations.

Since the 1960s, price support has dominated Japan’s agricultural policy, supporting farmers’ incomes but placing a huge burden on consumers. In order to maintain high prices, Japan has had to rely on tariffs and non-tariff measures so as to isolate its domestic market from the international market.

In the Uruguay Round, the country resisted tariffication and resorted to special treatment stipulated in Annex 5 of the Uruguay Round Agreement on Agriculture (URAA), compensating for not tariffying rice by providing more minimum access than would have otherwise been required. Japan, however, finally recognized that it could no longer bear the excessive minimum access burden and applied tariffication in 1999.

The Japanese position in this Round has not changed much from the Uruguay Round, since the country has not changed many of its domestic policies. In 2000, Japan introduced direct payments for farmers in disadvantaged regions. In 2007, it changed the 70 percent of deficiency payments for wheat, barley, sugar and some other dry farming products into green box payments. These policy reforms, however, did not change the domestic prices of agricultural products. Japan therefore has to continue to rely on high tariffs in order to maintain those prices and protect its agricultural sector.

To what extent would a successful conclusion of this Round along the lines of the Revised Draft Modalities paper issued by the chair of the agriculture negotiations, Ambassador Falconer, require changes in Japanese agricultural policies?

How much increased market access is likely to be generated as a result of tariff cuts and tariff rate quota expansion? Could Japan play a more aggressive role in the world market, taking advantage of the expansion of market access generated in other countries?

This paper makes attempts to address these issues by exploring the implications of the Revised Draft Modalities paper.

In addition to quantitative analysis of the extent to which tariffs would be reduced, this paper attempts to analyze the probable and possible effects of the paper on Japanese agriculture and agricultural policies, taking into accounts recent developments in the world market.

The first section of the paper gives an overview of the current state of Japanese agriculture and agricultural policies, insofar as these relate to the disciplines introduced in the Uruguay Round Agreement on Agriculture (URAA). The second section reviews briefly the Japanese positions in this Round. The next three sections discuss in more detail the implications of the domestic support, market access and export competition modalities.

The following section tries to point out several legal drawbacks to the proposed commitments on subsidies, the lack of disciplines on export tax, and the overly lenient disciplines on export quantity restrictions. It also refers to some environmental concerns which are just as important as trade concerns. The final section makes an overall assessment of the impacts of the suggested modalities on Japan.

Fisheries trade relations between the EU and ACP countries are governed by World Trade Organization (WTO) provisions, as well as those of the Cotonou Partnership Agreement (CPA) between the EU and ACP countries. These relations are undergoing a period of change, with the negotiation of new economic partnership agreements (EPAs) that will replace current unilateral trade preferences offered by the EU with reciprocal preferences. The ACP-EU EPA negotiations have given rise to concerns about potential loss of preferences that could result in a significant decrease of export revenues for ACP countries. Other issues of concern for ACP countries relate to tariff escalation and tariff peaks, reforming rules of origin, and the implications of EU regulations on sanitary and phytosanitary (SPS) measures. The inclusion of investment in the negotiations brings a new dimension that warrants careful consideration.

The continuation of uninterrupted market access for fish and fish products was a primary motivation for several ACP countries to agree to initial interim economic partnership agreements (IEPAs) or to agree to full EPAs with the European Community at the end of 2007. In certain cases a specific fisheries chapter was included in a regional IEPA/EPA. This was the case for the East African Community (EAC) and Eastern and Southern Africa (ESA) IEPAs, and similarly for the chapter on agriculture and fisheries in the Caribbean EPA (CARIFORUM). In other cases, fisheries were part of bilateral IEPAs between the EU and certain non-least developed countries (LDCs) in the ACP. This was the case for Côte d’Ivoire and Ghana, as West Africa did not come to an agreement with the European Community on a regional EPA at the end of December 2007.

The process of negotiating EPAs, including negotiations on rules governing trade and market access for fish and fish products, has been complex, challenging and divisive for the ACP groupings. At present, ACP groups yet to finalize their negotiations with the European Community are under pressure to do so. In regions that have already initialled an interim agreement, a number of questions subject to possible renegotiations remain. Overall, there is an urgent need for regions with IEPAs to ensure satisfaction with fisheries provisions already negotiated, and for regions without interim EPAs to learn from others in order to better articulate their positions in the process of negotiating full EPAs.

In response to these concerns, the International Centre for Trade and Sustainable Development (ICTSD) is initiating a process of analytical review of negotiations on fisheries under the EPA negotiations. This effort seeks to provide a better understanding of the substance of the provisions contained in IEPA/EPA agreements and to assess their significance from a trade, livelihood and sustainable development perspective.

As part of this process, this study is intended to be a practical tool for national and regional policymakers and stakeholders. It is meant to contribute to enhancing preparedness for negotiations of full EPAs such that the outcome contributes effectively to improving livelihoods and food security, ensuring meaningful market access, and achieving broad sustainable development objectives in ACP countries.

Liam Campling is currently a PhD candidate in development studies at the School of Oriental and African Studies, University of London. His research examines the global commodity chains in canned tuna (centred on the EU and US), with a focus on their developmental relationship with Fiji and Seychelles.

He has published on development in small island states, the politics of international trade relations and commodity studies in the Journal of Developing Societies, the Journal of Agrarian Change (with Henry Bernstein), Sustainable Development (with Michel Rosalie), Island Studies Journal (with Elizabeth Havice) and Development Policy Review (with Jesper Nielson and Stefano Ponte). He is on the editorial board of the journal Historical Materialism and is reviews editor of the Journal of Agrarian Change. Since November 2007 he has been consultant trade policy analyst to the Pacific Islands Forum Fisheries Agency (FFA). He has also worked as a consultant for the Common Market for Eastern and Southern Africa (COMESA), the Commonwealth Secretariat, the Center for the Development of Enterprise (CDE), the governments of Mauritius and Seychelles, the Pacific Islands Forum Secretariat, the Regional Trade Facilitation Programme and United Nations Research Insitute for Social Development (UNRISD). He previously taught international politics and history on the University of Manchester Twinning Programme, Seychelles Polytechnic.

This paper is part of ICTSD’s project on fisheries, trade and sustainable development, which aims to foster an inclusive and informed process for crafting multilateral, regional and domestic trade rules and policies in the fisheries sector that are supportive of sustainable development.

The chair, Ambassador Crawford Falconer (New Zealand), has been holding informal consultations with Members on tariff simplification, tariff quota creation and the special safeguard mechanism (see BRIDGES Weekly, 23 October 2008, http://ictsd.net/i/news/bridgesweekly/31623/). While Members have expressed willingness to engage, “no tangible movement” has taken place, sources said.

Delegates confirmed Falconer was unlikely to host another ‘room E’ meeting, with around three dozen delegations representing a cross-section of the membership, until there was more to report. At present, “there’s kind of nothing to say,” one negotiator acknowledged.

While some Members (such as Brazil) have suggested that a ministerial meeting could still be held before the year end, possibly preceded by revised draft texts on agriculture and industrial goods, most others remain sceptical that the round can be concluded soon. The US elections may also have influenced the general mood, as negotiators await signals of political will from the new administration (see related article, this issue). In the meantime, discussions appear to be in limbo, with one delegate describing the talks as “very quiet.”

ICTSD reporting.

Least Developed Countries (LDCs)[2], Small and Vulnerable Economies (SVEs)[3], and Small Islands Developing States (SIDS)[4] are already highly vulnerable to climate change physical impacts. In addition, they may also be hurt by some of the responses to the challenges of climate change taken by other countries and the international community.

These countries face significant levels of poverty and increased levels of climate-related threats such as droughts, floods, hurricanes, superimposed upon existing vulnerabilities. While these countries represent only a small portion of world trade, they are amongst the most open and trade-dependent in the world. Their key trade sectors such as agriculture, fisheries and tourism will be major impact-takers under climate change, yet many of these countries have already struggled, and achieved only a limited success in diversifying their economies. All these factors make LDCs, SVEs and SIDS particularly vulnerable to emerging climate change challenges.

Given the importance of trade in the economies of LDCs, SVEs and SIDS, trade policy will be an important element to strengthen these countries’ resilience to external shocks, including those arising from climate change physical impacts and policies. Although the interface between trade and climate change has entered the international policy arena, much is yet to be explored in order to deepen our knowledge on the links between these two issues and their future sustainable development implications.

Competitiveness policies[5] can play a major role in creating the supply-side capacity that these countries require in order to adapt to climate change, build resilience, and connect to the world economy on better terms. To strengthen competitiveness and build supply-side capacity in the context of climate change, these countries will most likely need to deal with both mitigation and adaptation aspects. Moreover, for these countries to respond to the urgent adverse effects of climate change, face the potential negative side-effects from the implementation of climate change mitigation activities, and meet the costs of adaptation, additional effective financial resources will be required.

The purpose of this meeting is to explore key interests and concerns of LDCs, SVEs, and SIDS in the context of climate change negotiations and identify crucial issues for a positive agenda for the trade and climate change regimes. Moreover the meeting seeks to explore effective tools to reduce the vulnerability and enhance the resilience of these countries from a competitiveness and adaptation prism. It will discuss the role of trade policy and the international trading system in this context.

The dialogue will bring together Geneva-based trade negotiators from LDCs, SVEs, and SIDS; climate change and development analysts and policy-makers; civil society and private sector representatives; experts; academics; and IGOs for two days to discuss these issues and identify the policy priorities and future research agendas to address key trade and climate change issues for these countries.

Moreover, this meeting has been envisioned as a follow-up to the discussions held on the “Stakeholder Dialogue on Climate Change and Trade: Key Issues for Developing Countries” co-organised in Mauritius on September 2-3, 2008 by ICTSD, the Commonwealth Secretariat, and the Ministry of Finance and Economic Development of Mauritius. Furthermore, it will provide a space to discuss the results from the Commonwealth Finance Ministers Meeting in St. Lucia held on the 6-8 October, 2008 and prepare for the upcoming XIV Conference of the Parties to the UNFCCC, in Poznan, Poland, in December 2008.

Seats are limited. We would be very grateful if you could confirm your participation with your name, title/organization, full contact information, by the 15th November 2008, to Paolo Ghisu (Tel.: +41 22 917 8815, E-mail: pghisu@ictsd.ch).

*********************

[1] This dialogue is undertaken under ICTSD’s Global Platform on Linkages between Trade Policies, Climate Change and Sustainable Energy. An initiative supported by DANIDA (Denmark); Ministry of Foreign Affairs of Finland; the Commonwealth Secretariat; and ICTSD’s institutional funders.

[2] Least Developed Countries (LDCs) are countries which according to the United Nations exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. A country is classified as a Least Developed Country if it meets three criteria based on (1) low-income, (2) human resource weakness and (3) economic vulnerability. [source: www.un.org/special-rep/ohrlls/ldc/ldc%20criteria.htm]

[3] “Many small economies face specific challenges in their participation in world trade, for example they lack economies of scale, have limited natural and human resources and face high transport costs for their exports. Some studies show that a small size may limit an economy’s possibilities to diversify local production and that this, in turn, could make it more difficult for small economies to fully integrate into the multilateral trading system.
The Doha Declaration mandates, in its paragraph 35, the General Council to examine the problems faced by small and vulnerable economies and to make recommendations to improve the integration of such economies into the multilateral trading system. This is to be done, however, without creating a new or separate sub-category of WTO members. Discussions on the mandate have taken place since 2002 in the Committee on Trade and Development (CTD) meeting in dedicated session”. [source: http://www.wto.org/english/thewto_e/minist_e/min05_e/brief_e/brief12_e.htm]

[4] Small Island Developing States (SIDS) are small island and low-lying coastal countries that share similar sustainable development challenges, including small population, lack of resources, remoteness, susceptibility to natural disasters, excessive dependence on international trade and vulnerability to global developments. In addition, they suffer from lack of economies of scale, high transportation and communication costs, and costly public administration and infrastructure. At present, fifty-one small island developing States and territories are included in the list used by the United Nations Department of Economic and Social Affairs. Theses States and territories often work together through the Alliance of Small Island States (AOSIS). [source: http://www.sidsnet.org/]

[5] Competitiveness Policies for Sustainable Development should be understood as “Strengthening and enhancing the production structures, trade capacity and policy institutions of a country, with a view to improving its ability for positive integration into the global system securing long term stable economic growth, based on producing goods and services that meet the test of international competition under fair market conditions, while expanding the real incomes and real freedoms of their citizens and using their natural resources and the environment in a sustainable manner, preserving their values for the benefit of present and future generations” (Corrales, Sugathan, and Primack 2003).

Emissions of greenhouse gas emissions (GHGs) between 2000 and 2006 increased on average by 3.1 percent per annum, compared to 1.1 percent in the previous decade, and are likely to continue to grow rapidly in view of high economic growth and lack of effective mitigation strategies. The impacts of climate change—such as rising temperatures and increased frequency of extreme weather events—puts severe pressure on food availability, stability, access, and utilisation.

Although rich countries are responsible for most GHGs, the impact of climate change is expected to be most severe in developing countries and on the poorest populations. Many low-income countries are located in tropical and subtropical regions, which are particularly vulnerable to rising temperatures, and in semi-desert zones, which are threatened by decreasing water availability. By 2080, agricultural output in developing countries may decline by 20 percent due to climate change, compared to 6 percent in industrialised nations. Also due to climate change, yields in developing countries could further decrease by 15 percent on average by 2080. Taking into account the effects of climate change, the number of undernourished people in Sub-Saharan Africa may triple between 1990 and 2080. Climate change shocks also erode the long-term opportunities for human development and could exacerbate inequalities within countries.

The higher susceptibility of the poor is also due to limited adaptive capacities. Low-income communities depend directly on agriculture, forestry, fisheries, aquaculture, and other climate-sensitive resources. Their vulnerability is exacerbated by inadequate complementary services, such as health, education, and insurance services, and lacking agricultural extension.

The risks climate change poses on food security are particularly pressing at a time of high oil prices. High fuel prices make agricultural production more expensive by raising the cost of fertilizers, irrigation, and transportation. This increased level and volatility of agricultural prices is negatively impacting the purchasing power and the food security of the poor. The decline of food commodity prices in the context of the financial crisis is probably only temporary. The access to capital for sustainable agricultural and water development investments is further constrained by the financial crisis.

The availability of agricultural products is also affected by climate change directly through its impacts on crop yields, crop pests and diseases, soil fertility and water-holding properties, and variable weather conditions. Last by not least, food utilisation is threatened by climate change through effects on human health and the spread of diseases in geographical areas not previously affected. As agricultural production declines, food prices rise, and purchasing power decreases, physical, economic, and social access to food is severely affected. For the poor, climate change impacts the four key dimensions of food security – availability, stability, access, and utilisation.

The problem or the solution?

While agriculture is part of the climate change problem, it is also part of the solution. However, the expansion of agricultural production as an energy source has broad and complex implications. Biofuels have raised hopes for reducing greenhouse gas emissions, mitigating climate change on a global or regional scale, and reducing the environmental risks to food security. Yet, biofuel expansion can also add to the greenhouse gas emissions problem through the conversion of forests and grassland to energy crop production. With land-use change, increased world corn-based ethanol production is estimated to increase greenhouse gas emissionsand for palm oil-based biodiesel produced even more so.

On the positive side, biofuels could benefit the poor through raising agricultural incomes, creating additional rural jobs in crop harvesting and processing, and utilising marginal lands and crop residues. The extent to which these potentials are realised depends on the farmers’ ability to access information and markets, produce at competitive prices and at sufficient economies of scale, and afford new biofuel sources. However, economies of scale in ethanol production—at least to date—favour large scale farms, while the existing subsidy regimes and import restrictions undermine the comparative advantage of developing countries. New technology such as that associated with sweet sorghum may change this pattern, however.

In terms of food availability, biofuels could unduly divert land and water resources, capital and political attention away from the production of food. Rising demand for biofuel feedstocks also puts strong upward pressure on agricultural commodity prices and thus on access to food. Further, the stability of food supplies is put at risk as volatile energy prices translate into larger food-price fluctuations, to which poor people have little capacity to adjust. These increases in crop prices are also accompanied by a net decrease in calorie consumption in all regions. The largest decrease is in Sub-Saharan Africa, where calorie availability is projected to fall by more than eight percent if biofuels expand as drastically as planned. In addition, the pressure biofuels put on water for household use could pose health risks and undermine food utilisation. At the same time, however, local biofuel production could provide cleaner and cheaper cooking and heating fuel alternatives and have positive health consequences for the poor.

A rapid, coordinated, and multidisciplinary response is needed to respond to climate change and related emerging risks. Building on the fundamentals of good development policy is essential but not enough to ensure food security under new climate change challenges and threats. Effective adaptation and mitigation strategies must be proactive and explicitly target the impacts of climate change and energy (biomass) developments on the poor. The needed response involves a combination of science, institutional, and policy innovations, which should be taken into account in global, regional, and national strategies, and should comprise three main elements:

1. A science and technology strategy

For climate change mitigation, the technological innovations needed include early warning systems for droughts, floods, and other natural disasters, better soil and water management, and seed varieties more resistant to adverse climatic conditions. For adaptation and long-term productivity, biodiversity should also be maintained and enhanced, for example through gene banks. Carbon sequestration, a process that removes carbon dioxide from the atmosphere, should be encouraged to mitigate the increase of carbon concentration. Also, more support should be given to developing clean bioenergy technologies that do not compete with food production.

To achieve long-term agricultural growth and build a more resilient food system that can meet ongoing and future challenges, developing country governments should also increase their medium- and long-term investments in agricultural research and connect to international science and knowledge-sharing systems. In addition, new approaches to scientific partnerships should be developed and expanded. Co-funding and cooperation among public institutions, foundations, and private enterprises should play an important role in building and advancing the scientific base.

2. Markets and trade policy strategies that call for global institutional arrangements of carbon and biofuels trading

Developed countries should eliminate domestic biofuel subsidies and open their markets to biofuel exporters for biofuels from sustainable production. In view of high food prices, measures to make more agricultural products available for food and feed include freezing biofuel production based on grains and oilseeds. Transparent and equitable standards of carbon and biofuels trading are needed, including sustainability and performance-based standards rather than technology-based standards that will quickly become outdated.

On the policy side, post-Kyoto Protocol rules of access must change to include activities important for developing countries such as avoiding deforestation, soil carbon sequestration, and mitigating methane and nitrous oxide. The Clean Development Mechanism rules should be refined to encourage small farmer participation and to change existing regulations that impose high costs on developing carbon markets in poor countries. Ongoing climate change negotiations under the Bali Action Plan should lead to a new binding international climate change agreement with appropriate carbon-trading and carbon-offset policies (e.g. cap-and-trade and carbon-tax instruments) that include economic incentives for engaging small farmers in developing countries. Farmers’ organisations should cooperate at the national and international level to link small farmers to global carbon markets. Ensured by efficient contracts, the private sector and small farmers can engage in mutually-beneficial projects in carbon sequestration and decentralised bio-energy crop production.

3. An insurance and social protection strategy for the food insecure poor to respond to the growing complexities of food system changes

To reduce the vulnerability of poor households to adverse climate and energy price shocks and to prevent new households from falling into poverty, there is an increased need to strengthen public and market-based social protection mechanisms. Examples of social protection policies include social safety nets (such as conditional or unconditional cash transfers, public works and school feeding programs, subsidies on items consumed by the poor, microcredit, and crop insurance), health insurance, and social security. In addition, the triggers of emergency agencies to respond to crises should be improved. New and innovative insurance mechanisms and private-public partnerships should also be introduced at a larger scale to expand coverage among the poor. Insurance and social protection must be adjusted to the individual circumstances of each country and should be supported by investment in rural infrastructure and services, and good governance.

The way forward

It is clear that action is needed to address the acute and long-term impacts of climate change, particularly in the developing world. Each country should develop and implement a viable national action plan, which takes into account future development paths, expected climate change impacts, and adaptation and mitigation costs. Appropriate prioritisation, sequencing, and institutionalisation of mechanisms are essential. Proposed solution for the short-term should also not undermine long-term climate mitigation options. Global actors should coordinate their transfer of resources, knowledge, and technology, and build a global response to address climate change risks, beyond a single post-Kyoto agreement.

Joachim von Braun is Director General of the International Food Policy Research Institute (IFPRI)

Ways forward for the multilateral trading system

World Food Crisis: Are Trade Rules a Problem or a Way Forward?
 
Moderator: Mr. Christian Häberli - World Trade Institute
 
Speakers:

Ms. Carmel Cahill -Trade and Agriculture Directorate, OECD

Mr. Ricardo Meléndez-Ortiz - Executive Director, ICTSD
Amb. Mario Matus, Permanent Mission of Chile
Amb. Teehankee, Permanent Mission of the Philippines
Amb. Manzoor Ahmad, Director, FAO Liaison Office, Geneva

Sources indicate that a primary focus of their discussions will be the the Special Safeguard Mechanism (SSM), a tool that would allow developing countries to raise tariffs temporarily when import volumes increase or prices fall suddenly. Deadlock on the SSM was at least the proximate trigger of the breakdown in the negotiations six weeks ago.

The meetings this week will include representatives from to so-called G-7 — Australia, Brazil, China, the EU, India, Japan and the US — the same players that were at the centre of talks in July. In addition to the SSM, tariff rate quota creation and tariff simplification were also on the agenda for the talks, a source said.

A source close to the negotiations told Bridges that the US, the host of the talks, rejected a request from China that Indonesia, the coordinator of the G-33 group of developing countries and a key player in the contentious SSM debate, be allowed to participate in the meeting.

“The G-7 process is exclusive,” a developing country trade official told Bridges, emphasising that the negotiations should be made more inclusive and brought back to the WTO if any real results are to be achieved. “I am sceptical about what will come out of the meeting,” he said, indicating that he thought the gathering was only meant to achieve political ends. “The credibility of the process is in question.”

Critics of the closed-door negotiation process also pointed to the absence of four cotton-producing African nations - Benin, Burkina Faso, Chad and Mali - from the talks. The C4, as they are known, are the primary players, along with the US, in negotiations on potential cuts in US cotton subsidies, a topic that was never broached at the July meetings and that remains a key stumbling block to progress toward a world trade deal.

But what will ultimately emerge from the meetings is, at this point, anyone’s guess.

“People are waiting to see what comes out of this process of the G-7,” WTO spokesman Keith Rockwell said, Reuters reported. “Nobody is rushing into anything. People are examining the situation and trying to find ways forward.”

But despite the resumption of talks, many have expressed scepticism over the potential for significant progress.

“Support for the…deal as a whole is very fragile and not just a question of the US and India resolving their differences in agriculture,” EU Trade Commissioner Peter Mandelson said in a speech to the European Parliament on 3 September.

“I feel as if we have a priceless, wafer-thin vase of great craftsmanship in our hands but which now has to be carried from here over a very slippery floor,” he said.

Things may be especially dicey for Mandelson, who is still trying to manage differences among EU member states over how hard to push for a world trade deal.

Indeed, as Agence France-Presse reported last week, French Prime Minister Francois Fillon says his country, which currently holds the EU presidency, will not agree to a deal that compromises French or European interests.

“We must not drop our guard,” Fillon said during at recent agricultural event in western France. “The determination of some to obtain an agreement at all cost is intact. You can count on the president and the government not to harm the interests of France and Europe. For us too, our determination is intact,” he said.

WTO Director-General Pascal Lamy said last week that he was “neither a pessimist nor an optimist” on the prospects for a successful resolution of the talks, AFP reported.

“There’s nothing shocking about a round that lasts seven or eight years,” he went on. “Especially if you consider the rounds in the 1960s and 1970s, when there were only four countries at the table and three subjects to deal with. Today, you have 153 Member countries and a score of items on the agenda.”

ICTSD reporting. “Trade officials consider resuming Doha Round talks,” REUTERS, 9 September 2008; “OMC: Lamy annonce une reprise des négociations au niveau technique,” AFP, 4 September 2008; “France digs in heels ahead of WTO,” AFP, 9 September 2008.