Bridges Weekly Trade News Digest • Volume 7 • Number 36 • 30th October 2003
WTO: MEMBERS MEET INFORMALLY TO CONSIDER AG
On 24 October, Chair Perez del Castillo and Director-General Supachai Panitchpakdi held an informal "Ambassador plus one" ‘green-room’ consultation with a smaller group of key Members to discuss how to revive the multilateral farm trade negotiations. Talks have been stalled since the Cancun Ministerial ended abruptly before trade ministers had the chance to address agriculture in greater detail. According to Chair Perez del Castillo, it was a positive first step and a good meeting. "Everyone said they were willing to engage, without exception," the Uruguayan Ambassador said.
The agriculture talks form part of a process set out by General Council (GC) Chair Ambassador Carlos Perez del Castillo (Uruguay) on 14 October and endorsed by the GC on 21 October, wherein Members have indicated some willingness to engage in Geneva. The process involves a focus on four key areas: agriculture, NAMA, cotton and the so-called ‘Singapore Issues’ of investment, competition, transparency in government procurement and trade facilitation (see BRIDGES Weekly, 15 October 2003; see also related stories, this issue).
According to trade sources, Chair Perez del Castillo is aiming for a solution that would obtain results similar to what could have been achieved in Cancun had the talks not collapsed, to be agreed at a senior-level GC meeting in mid-December. In terms of process, sources indicated that Chair Perez del Castillo was opting for the approach taken by Members in the immediate lead-up to the Cancun Ministerial, i.e. to adopt a framework for establishing modalities in agriculture, rather than agreeing on full modalities including clear targets, numbers and rules-based elements. Most Members appeared to back this approach, while some others — such as G-20 leader Brazil — reportedly preferred establishing real modalities (including numbers), as Members still had one and half months for further negotiations.
Which text to use?
Following the meeting, Perez del Castillo reportedly said that no Member had outright objected to the idea of using the second revision of the Draft Cancun Ministerial text — produced by Ministerial Chair Luis Ernesto Derbez on 13 September — as the basis for further work (JOB (03)/150/Rev.2, available at http://www.ictsd.org/ministerial/cancun/docs/draft_cancun_minist_text_re v2.pdf). However, he stated that the Derbez text was "more acceptable to some than to others". While the 21 Members of the Asian-Pacific Economic Cooperation (APEC), including the US, Japan, China and Australia had agreed at the recent APEC summit in Bangkok "to build on Chair Derbez’s text of 13 September," (see BRIDGES Weekly, 23 October 2003), other Members such as India expressed doubts as to whether they could accept the Derbez draft as the only basis for further agriculture trade talks. According to Indian Ambassador K. M. Chandrasekhar, India would prefer a hybrid approach under which various "positive" elements from different texts, such as the Harbinson draft modalities, would be combined.
According to trade sources, India has most problems with the language on agricultural market access in the Derbez text, as it would require developing countries to cut a certain percentage of tariff lines using the so-called ‘Swiss formula’ — which would result in steeper reductions of high tariffs than low tariffs. Some net food-importing developed countries such as Japan and Switzerland also feel uncomfortable with the market access provision, especially its requirement to expand tariff rate quotas (TRQs) for products whose tariffs are cut under the (much more flexible) Uruguay Round formula.
Nevertheless, almost every Member "seems to have some sort of difficulties with certain elements of the Derbez text," one developing country delegate said. Perez del Castillo is therefore trying to come up with a revised text for further discussion, which would be based on whatever "common ground" emerges during the consultative process.
Unlike the US, which according to the APEC statement has clearly expressed its preference for the Derbez text, the EU has not yet revealed whether it could live with it. EC Trade Commissioner Pascal Lamy has, however, voiced some doubts about the Derbez text (see related story, this issue). The European trade bloc is still in "reflection mode," holding internal consultations with its constituencies to assess the Cancun collapse and to determine the EU’s post-Cancun strategy.
Plan A or plan B?
Perez del Castillo reportedly called on Members to also consider a "plan B" in the event countries would not be able to adopt a framework text by 15 December. He did not reveal what such an alternative result could look like. According to trade sources, a "plan B" could take the form of a mere process outcome, which could pack some agreed principles in a statement, determine which text to use as a basis for further work, and establish a work programme by relaunching the Committee on Agriculture special (negotiating) sessions.
Castillo plans to hold another consultation on agriculture in mid- November. A separate consultation on the cotton initiative pushed by a number of African countries at Cancun scheduled for 27 October was postponed.
ICTSD reporting; "Agriculture: WTO Chair says key members back draft text for post-Cancun Ag talks," WTO REPORTER, 27 October 2003.
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