Bridges Weekly Trade News Digest • Volume 9 • Number 9 • 16th March 2005
Agriculture Week Kicks Off On High Note
A week of agriculture negotiations at the WTO started with two days of informal meetings from 14-15 March. Members discussed domestic support, and also took stock of progress on the conversion of ’specific’ agricultural tariffs based on quantities into ‘ad valorem’ equivalents (AVEs), i.e., tariffs based upon the price of the product.
Key Members gathering in a mini-ministerial meeting in Mombasa a week ago had agreed to postpone the decision of whether Members would be able to retain specific tariffs following a conversion in order to allow the technical work to proceed (see BRIDGES Weekly, 9 March 2005). The chair of the agriculture negotiations, New Zealand’s Tim Groser, said he felt considerable progress had been made, and was optimistic regarding the prospects for Members agreeing on a ‘first approximation’ of modalities (such as percentages for tariff and subsidy cuts, reduction formulae, criteria for domestic support, schedules, deadlines, and transition periods) by July. Meanwhile, the G-20 (which includes major developing country players such as Brazil, India and China) and Cairns group of agricultural exporters are preparing for upcoming ministerial-level coordination meetings.
Domestic support - scope for agreement broadens
Members discussed the reduction of Amber Box (trade distorting) support, de minimis support, and Blue Box support (partially de-coupled and linked to production limiting programmes). Amber Box reductions will be made according to a tiered formula, with higher levels of support being cut more steeply. Members discussed how to categorise different countries’ support, noting that while overall the EU provides its farmers with the most support, smaller countries such as Switzerland and Norway provide significant support in relation to their farm output. These two countries said they sought to make a real contribution in terms of cutting support, even though the impact of their support is smaller on the world market than that of the EU, for example. Australia and New Zealand had been arguing that the support paid by small countries also contributes to distortion.
At the meeting, the G-20 presented a proposal on the Blue Box, seeking to prevent ‘box shifting,’ i.e. a situation in which Members would simply move their Amber Box support into the Blue Box and avoid strict reductions. The group said that any Amber Box commodity support had to be completely reformed to fit the Blue Box before it could be moved, as the Blue Box has been created to help countries transition out of trade distorting subsidies. In addition, the group called for checks on price-linked support, such as countercyclical payments, if these were to be considered Blue Box support measures.
G-20 ag ministers to coordinate positions
The G-20 ministers are meeting in New Delhi from 18-19 March to coordinate positions on agriculture in view of the December Hong Kong WTO Ministerial. India’s trade minister Kamal Nath commented that "The aim of the New Delhi meeting is to help us consolidate. When you have diverse interests, how do you remain united?" The ministers attending the G-20 meeting will work on a joint position. They will specifically address the issue of what methodology to use for calculation of AVEs, and are expected to come up with a common position against the expansion of the agriculture negotiations in the current phase beyond the "three pillars" of market access, domestic support and export subsidies to issues such as sectoral initiatives or geographical indications. Other issues on the table include the tariff cutting formula.
A number of developing countries outside the G-20 plan to attend as observers, including G-33 countries seeking to secure Special Products classifications and a Special Safeguard Mechanism for developing countries, as well as representatives of African, Caribbean and Pacific (ACP) countries and least developed countries (LDCs).
The Cairns group of agriculture exporters also is scheduled to meet at the ministerial level in Cartagena, Colombia, on 30 March.
The agriculture negotiations at the WTO are held in three different settings: in informal negotiating sessions open to the full Membership allowing for a first reading of issues; in more focused open-ended technical consultations that delve deeper into the issues; and in small group consultations involving technical experts. The ‘agriculture week’ is continuing in informal mode, with a formal meeting of the Committee on Agriculture special (negotiating) session scheduled for Friday, 18 March.
ICTSD will provide a full report of the agriculture week in the next issue of BRIDGES Weekly.
ICTSD reporting; "Cairns Group Ag Group Renews Push On Trade Reform In WTO," DOW JONES, 15 March 2005; "India Says G20 Meeting To Consolidate Alliance," REUTERS, 15 March 2005; "G-20 Meet To Finalise Stand On Scope Of Trade Talks This Week," FINANCIAL EXPRESS, 14 March 2005; "Focus On Agricultural Subsidy At G-20 Meet," CALCUTTA TELEGRAPH, 15 March 2005; "G-20 Outlines Further Disciplines Sought for New Blue Box Support," WTO REPORTER, 15 March 2005.