Bridges Weekly Trade News Digest • Volume 6 • Number 30 • 13th September 2002
Split On GIs Overshadow Market Access Talks At WTO’s Agriculture Committee
Members met from 2-6 September at the Committee on Agriculture (CoA) to continue talks on market access as well as to prepare for the special (negotiating) session on domestic support scheduled to be held end of this month. Reading out his summary at the 6 September formal meeting, Chair of the CoA negotiating session, Stuart Harbinson, said that the last four days of informal negotiations had provided a lot more detail, but cautioned that "due to lack of specificity in some areas" he might not be able to prepare a first draft of the general rules (’modalities’) for further farm trade liberalisation, as scheduled for the end of February 2003. His concerns may have been added to by recent statements from the EC and Switzerland indicating that they would only move in the agriculture talks if ’sufficient progress’ was made on highly contentious issues such as the precautionary principle, mandatory labelling and expanding the protection of geographical indication (GIs). These subjects are currently being discussed (and/or negotiated upon) in various WTO Committees.
Market access
Following up the 29-30 July "intersessional consultations" on market access (see BRIDGES Weekly, 8 August 2002), Members at the 2-3 September informal special session turned to the topics of: special agricultural safeguards (SSG); state trading enterprises (STEs); and "other market access issues". On SSG [a special mechanism that protects some -- mostly developed -- countries from sudden surges in imports of certain agricultural products], many developing countries indicated that they wanted to address the technicalities leftover from the Uruguay Round that prevented them from using the SSG. The 18- member Cairns Group of agricultural exporting nations, although reiterating its call for eliminating the SSG for developed countries, said that it would be willing to accept a new safeguard mechanism for developing countries under agreed circumstances. Trade sources reported that other Members also showed some "sympathy for this call." For their part, Japan, Korea and Switzerland proposed a new and additional safeguard for perishable and seasonal products, a suggestion that was clearly rejected by some Members, such as those from the Cairns Group.
"Alternative modality" from the Philippines
Notably, the Philippines (a Cairns Group member) tabled an interesting "contribution" aimed at interlinking tariff reductions with reductions in export subsidies and domestic support, as well as setting up a "responsive mechanism that penalises the persistence of trade distorting support." Pursuing a two-stage approach on tariff reductions, they suggested bringing down tariff peaks and tariff escalations (the existence of higher tariff levels on certain products) to a harmonised level within the initial three-year phase, with further reductions from this level during the second three-year period. However, developing countries would only be required to enter the second phase of reductions if all developed counties had eliminated export subsidies and "substantially reduced their production- and trade- distorting support." Another element of the proposal was a detailed formula for additional duties that would be available to developing countries importing products from developed countries that provided "trade-distorting export competition and domestic support measures" to such products. This latter provision is based on a proposal from last October on a special and differential countervailing measure (see BRIDGES Weekly, 2 October 2001).
Non-trade concerns
Further, in the market access discussions, the EC and Switzerland indicated that non-trade concerns (NTCs) such as food safety and consumer information needed to be duly taken into account in the current modalities talks. Switzerland went as far as to say that "only a minimum result appears to be attainable in the agricultural negotiations" if Members failed to reach agreement on these related NTC concerns as per discussions in other WTO Committees. Addressing food safety, the EC said that it would like an interpretation of the AoA to allow use of precautionary measures instead of seeking an amendment of the Sanitary and Phytosanitary Agreement (SPS) or relying on dispute rulings to address the issue. Therefore, the EC suggested that the agriculture negotiations should be used to clarify under which circumstances precautionary measures could be imposed. Countries such as Norway, Korea and Japan supported this proposal, while others as the US, Cairns Group members and China said that precaution was an SPS issue. The EC, Norway and Japan further said that mandatory labelling should be allowed under WTO rules as it was needed to provide information for consumers, and to cover issues like production methods [e.g. "organic" products] and product tracing. US, China, and the Cairns Group, however, insisted that labelling was to be discussed at the Technical Barriers to Trade Committee.
Geographical indication (GIs)
The EC also called for negotiating — as a direct market access issue — the extension of the level of protection of geographical indications (GIs) in the agriculture talks, with the aim to include an index of additionally protected agricultural GIs in the Agreement on Agriculture (AoA). While they agreed that the "issue also entails a market access dimension," Switzerland indicated that it would prefer to leave what it sees as an NTC to the ongoing discussions in the Council for Trade- Related Intellectual Property Rights (TRIPs) as long as progress was made there. Fellow ‘Friends of Multifunctionality’ Norway, Japan and Korea remained silent on the GI issue, while Cairns Group members Thailand and Bolivia allegedly showed some support for extending GI protection. Nevertheless, the latter agreed with Switzerland that this should rather be handled at the TRIPs Council. At the TRIPs Council, Members are currently at odds over whether Article 18 of the Doha Declaration contains a negotiating mandate on GI extension or not (see BRIDGES Weekly, 3 July 2002).
Domestic support
With regards to domestic support, Members started to exchange their views on the five key items identified by the Chair: i.e. the Green Box, Article 6.2 [so-called Special And Differential Treatment (S&D) Box], the Blue Box, the Amber Box and "other domestic support issues." Mainly addressing the Green Box, Members discussed, inter alia, whether the eligibility criteria of the Box needed to be revised and whether a maximum level of each Member’s spending under the Green Box should be established. While it was reported that Members such as China and the Philippines supported the idea of capping the Box, the EC, Switzerland and Japan suggested expanding it so that non- trade objectives such as animal welfare and rural development could be better pursued. Nevertheless, a European delegate pointed out, there was general consensus amongst Members that the "Green Box remains green." For its part, Cairns Group country Thailand proposed to revise the general requirement of the Box, such that the words "or at most minimally" were removed from the caveat that subsidies registered here have "no, or at most minimally trade-distorting effects". A developed country source indicated, however, that such a change was not likely in the current agriculture talks.
The discussions on domestic support will be continued at the forthcoming special session to be held on 23-25 (informal) and 27 (formal) September. A mid-November meeting will provide Members with the opportunity to address so-called inter-pillar issues.
ICTSD reporting.