Bridges Weekly Trade News Digest • Volume 12 • Number 33 • 9th October 2008

WTO Members Revive Ag Talks through Chair’s ‘Walk in the Woods’

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The chair of the WTO’s committee on agriculture, Crawford Falconer of New Zealand, outlined a strategy to work on outstanding issues in the agriculture negotiations at an informal meeting on 1 October open to all of the organisation’s Members. The meeting was the committee’s first since world trade talks collapsed in Geneva at the end of July. No objections were raised or speeches made at the open-ended informal meeting held by Ambassador Falconer.

Ambassador Falconer told delegates that he planned to consult informally with Members on issues of specific interest to them. In particular, Falconer outlined that he wanted to start on issues “furthest away from agreement.” Among those to be covered in the negotiations are tariff rate quota creation, tariff simplification, sensitive products, the Special Safeguard Mechanism (SSM), green box, blue box and cotton. After small-group and private consultations, Falconer hopes to convene a ‘Room D’ meeting of 36 representative delegations to be followed by a meeting of the full membership. At the informal open-ended membership meeting, which Falconer predicted would be “not very far away,” he said that he hoped that the membership would engage on “matters of substance.”

Through the ‘walk in the woods’ process, the term given to the small-group meetings that take place away from the WTO, the chair intends to move discussions in a multilateral direction. The current ‘walks’ are being held at the ambassadorial or senior-official level and are not expected to iron out technical details. The chair began holding the private consultations as a means of allowing Members to offer ideas in an informal, non-committal manner over the summer to help resolve what where considered key topics in preparation for the July mini-Ministerial.

The debate on tariff rate quota creation is an area that has not been explored in detail during formal negotiations. It centres on whether countries that use the sensitive product partial exemption from full-fledged tariff cuts can extend that exemption to tariff lines that were not declared tariff rate quotas during the Uruguay Round. This would allow import-sensitive countries such as Japan and Switzerland to better protect farm goods of interest to them with tariff rate quotas. A source close to the discussions on tariff rate quota creation noted that the usual strong opposition to the measure, especially from exporters, was not present because the “scenario is different now,” thanks to the repeated collapse of farm talks.

Tariff simplification is another subject that many Members are eager to address. Discussions on this matter will focus on determining how to convert non-ad valorem tariffs to ad valorem tariffs, or from non-percentage measures to percentage tariffs. In cases where tariff calculations are extremely complex, Members would simplify them to the specific tariff level, or a predetermined tariff-per-unit measure.

Some Members have criticised WTO Director-General Pascal Lamy for focussing the July ministerial-level talks among the G-7 group of major trading powers - Australia, Brazil, China, the EU, India, Japan and the US. That group reconvened in September in an attempt to overcome the differences that led to the July collapse. According to some delegates, volatile issues such as cotton, among others, were not sufficiently discussed in the September G-7 meetings, and too much emphasis was placed on the Special Safeguard Mechanism (SSM), a controversial protection tool that many say triggered the collapse of the July talks. A delegate noted that resolving the overlap between the G-7 discussions and the “walk in the woods” was going to be a difficult task.

Falconer’s strategy was put into play on 2 October, when key delegations began meeting in small groups and holding private consultations. First on the agenda was tariff quota creation - or non-creation - and tariff simplification. Green Box domestic subsidies were scheduled to be discussed the following day.

This week’s schedule includes the controversial SSM, cotton subsidies, sensitive products and Blue Box headroom.

At the meeting Falconer said that he had created his schedule after getting input from Members at a recent Green Room meeting, in one-on-one talks, and in various consultations held with around 25 delegations at the New Zealand embassy.

Countries involved in the discussions have described them as informal and said that they have not led to any concrete progress.

Falconer will leave the WTO and return to his home country in December. Among farm trade officials, opinions of Ambassador Falconer continue to be positive.”Falconer will do his job until the end,” one delegate said.

ICTSD reporting.