Bridges Trade BioRes • Volume 4 • Number 22 • 3rd December 2004
AGRICULTURE UPDATE: WTO TALKS INCH FORWARD, EU SUGAR REFORM DELAYED
AGRICULTURE UPDATE: WTO TALKS INCH FORWARD, EU SUGAR REFORM DELAYED
From 15-19 November, WTO delegates engaged in intense negotiations on agriculture. The talks comprised the second "agriculture week" after the July Package agreement for moving the Doha Round forward (WT/L/579) and focused on technical issues. Discussions on the Green Box subsidies (subsidies that do not distort trade, including environmental subsidies) triggered some political disagreements, however.
Meanwhile, on 22 November the EU Agriculture Council met for the first time under Commissioner Mariann Fischer Boel, to consider, among other issues, the reform of the EU sugar regime. Timed to coincide with the Agriculture Council, WWF released a new report on the environmental impacts of sugar farming.
WTO Members disagree on "Green Box"
Closing the latest set of discussions on agriculture at the WTO, Chair Tim Groser commented that the outcome was somewhat mixed, but the atmosphere had been constructive. Members had made progress on issues such as disciplining export subsidies, while talks on the Green Box had failed to move. Members also established a sub-committee under the Committee on Agriculture special session to deal specifically with the issue of cotton during the meeting. Some delegates commented that the week’s talks had covered a large range of issues, making it difficult to adequately engage on all fronts. Others said enough issues had to be tabled sufficiently early to allow Members to agree on full negotiating modalities — guidelines for how to negotiate — in time for the Hong Kong ministerial in December 2005.
During the informal talks, Members disagreed over what reviewing and clarifying the Green Box referred to. The EC felt the review only implied a "health check-up," while the G-20 (major developing countries, including Brazil, India and South Africa) and the Cairns group of agriculture exporters wanted to see new disciplines on support programmes, in particular income support programmes. The G-10 (mainly developed country net food importers) stressed that the Green Box was an important tool for the transition out of trade distorting subsidies. Brazil, on the other hand, underscored that income support programmes can help producers cover risks and general costs, thus indirectly leading to higher production.
Following the meeting, Brazilian Ambassador Luis Felipe de Seixas Correa commented that "We are in what I would say is a pre-negotiation phase. No one expects the negotiations to really pick up until March or April next year".
EU sugar reform delayed
Commissioner Mariann Fischer Boel, speaking on the reform of the EU sugar regime, commented that a reform plan issued by the European Commission in July (see BRIDGES Weekly, 21 July 2004) formed a good basis for further discussion. Among three options for the EU sugar regime — i.e. status quo, price reduction, and full liberalisation — she noted there was full agreement on the fact that retaining the status quo was not possible. On timing, she said she would provide a new draft in May or June 2005, and that the Council should aim for political agreement on a final draft before the WTO Hong Kong ministerial meeting in December 2005. Under this schedule, the reform would be implemented later than originally planned.
The EU currently maintains a sugar scheme characterised by subsidies, high internal prices, and imports from ACP countries on favourable terms under certain quotas. The EU is also a significant exporter, affecting the world market sugar price.
WWF releases report on sugar
Timed to coincide with the EU Agriculture Council, environmental organisation WWF released a report entitled "Sugar and the Environment: Encouraging Better Management Practices in Sugar Production and Processing". The report highlights the biodiversity loss caused by sugar production through habitat loss, intensive use of water for irrigation, heavy use of agro-chemicals, as well as discharge and runoff of polluted effluent associated with the industry. For example, sugar beet production in Andalucia in Spain lowered water levels in the Guadalquivir River. To help prevent problems related to sugar production, WWF outlines better management practices. However, according to WWF, the EU sugar regime does not necessarily support good practices because it supports overproduction of sugar beet in Europe, allowing excess production to be dumped on world markets. "Industry, consumers, and policy makers must work together to make sure that in the future sugar is produced in ways that least harm the environment," commented Elizabeth Guttenstein, WWF’s European agriculture and rural development officer.
Access "Sugar and the Environment" here.
"Outcome of Agriculture/Fisheries Council of November 2004," EC RELEASE, 23 November 2004; "European sugar leaves environment with bitter taste," WWF RELEASE, 22 November 2004.