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WTO Agriculture Negotiations Outstanding Issues for Developing Countries. Tim Ruffer Oxford Policy Management tim.ruffer@opml.co.uk. Presentation Outline. Background Key issues, what has been agreed and what remains to be negotiated Market access Domestic support Export competition

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WTO Agriculture Negotiations Outstanding Issues for Developing Countries

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Wto agriculture negotiations outstanding issues for developing countries

WTO Agriculture NegotiationsOutstanding Issues for Developing Countries

Tim Ruffer

Oxford Policy Management

tim.ruffer@opml.co.uk


Presentation outline

Presentation Outline

  • Background

  • Key issues, what has been agreed and what remains to be negotiated

    • Market access

    • Domestic support

    • Export competition

  • Key issues for developing countries

  • Timing and requirements for agreement


Background to the negotiations

Background to the negotiations

  • Under ‘built in agenda’, negotiations began in 2000

  • New mandate under DDA 2001

  • Work on technicalities of modalities began October 2003

  • Framework agreed July 2004

  • Deadline of 1 January 2005 postponed

  • No new deadline, but unofficial target of agreement at Hong Kong in December 2005. But behind schedule – failed to reach deal on “first approximations” in July

  • However some progress made in Dalian – agreement to use G20 framework (which focused on market access) as a starting point for future negotiation


Market access

Market Access

  • Most important part of modalities and most difficult to negotiate

    Key issues:

  • Tariff reduction formula (precondition for setting modalities in other market access areas)

  • Sensitive & special products

  • Special safeguards

  • How to address preference erosion

  • Quota size, administration and in-quota tariffs


Market access what has been agreed

Market Access What has been agreed

  • Ad valorem equivalents (agreement reached in May)

  • Tariff reductions

    • Tiered formula – steeper cuts for higher tariffs

    • Single approach – improved market access by all (except LDCs)

    • Reductions from bound rates

    • S&DT integral

  • TRQs. Expansion required

  • Sensitive products. Lower tariff reductions for an “appropriate number” of tariff lines. But “substantial improvements” in market access still required through tariff reductions and TRQ commitments

  • Special products. More moderate treatment for an “appropriate number” of products designated by developing countries

  • SSM. To be established for developing countries

  • Preference erosion. Will be addressed


Market access what remains to be negotiated

Market AccessWhat remains to be negotiated

  • Tariff reduction under the tiered formula

    • Number of bands (Dalian proposed 5/4 for developed/ developing)

    • Thresholds for defining bands (Dalian proposed 20, 40, 60, 80% for developed and 30, 80, 130% for developing)

    • Type of tariff reduction for each band (Dalian proposed linear with cuts by developing countries at 2/3 of developed. EU has proposed flexibility on the level of cut around an average). Level of reduction not agreed

    • Dalian also proposes tariffs capped at 100%/150% for developed/ developing – fiercely opposed by G10 and ACP

    • Timeframe for tariff reduction

  • Tariff simplification?


Wto agriculture negotiations outstanding issues for developing countries

  • TRQ expansion and administration

    • TRQ expansion if product shielded from major tariff cuts?

    • Ceiling on out-of-quota tariffs?

    • Improvements in TRQ administration

  • Sensitive and Special Products

    • Number of products and criteria for selection

    • Market-opening obligations (tariff reduction or TRQ expansion?)

  • SSG & Special safeguard mechanism

    • Little discussion of details

  • Preference erosion

    • Little discussion of details

    • Africa Group has proposed establishment of adequate timeframe and support mechanism for adjustment to erosion


Domestic support key issues

Domestic SupportKey issues

  • Formula and timeframe for reductions

  • Methodology for establishing Amber Box caps

  • Future disciplines for Blue Box and Green Box


Domestic support what has been agreed

Domestic SupportWhat has been agreed

  • Tiered formula for overall level of support (amber box, de minimis and blue box).

  • Downpayment. Ceiling of overall support cut by 20% in first year.

  • Amber Box. Tiered formula and limits on supports for specific products.

  • De Minimis. Reduced by amount to be negotiated. Developing countries exempt if most allocated for subsistence and resource poor farmers.

  • Blue Box. Capped at 5% country’s agric production. Definition changed to include direct payments that do not require production.

  • Green Box. Review and clarification of supports.

  • S&DT. Longer implementation periods and lower reduction coefficients. Continued access to Article 6.2.


Domestic support what remains to be negotiated

Domestic SupportWhat remains to be negotiated

  • Formula for reductions. Bands.

  • Methodology for establishing Amber Box caps. Base period and whether approach should be uniform

  • Green Box. Review and clarification of criteria. New disciplines?

  • Blue Box. How to measure BB component for cut and new measures (especially for US counter-cyclical payments)


Export subsidies and competition what has been agreed

Export Subsidies and CompetitionWhat has been agreed

  • All export subsidies eliminated by annual instalments

  • Developing countries provided longer implementation period

  • Continuation of Article 9.4 (subsidies for transportation and marketing) for a ‘reasonable period'


Export subsidies and competition what remains to be negotiated

Export Subsidies and CompetitionWhat remains to be negotiated

  • Date for elimination of export subsidies

  • Disciplines for export credit, guarantees and insurance of 180 days or less

  • Food aid: role of international organisations, whether fully in grant form, monetisation, prohibition of tied food aid, transparency, binding commitments on supply from donors.

  • State Trading Enterprises. Approach to disciplines, definition of entities covered, S&DT, etc


Groser key elements for progress

Groser – key elements for progress

  • Market access

    • Number of tiers

    • Description of nature of tariff reduction formula

    • Further elaboration of flexibilities (SPs & sensitive products)

  • Domestic support

    • Structure of reduction commitments

    • Convergence on green box criteria

  • Export competition

    • Further elaboration of parallel commitments – particularly STEs & food aid


Key issues for developing countries

Key issues for developing countries


Timing and requirements for agreement

Timing and Requirements for Agreement

  • Urgency to complete by end 2006 – expiry of US ‘Trade Promotion Authority’. Requires agreement on modalities at Hong Kong

  • Intensive negotiations in September – 11 weeks before ministerial

  • Need to narrow negotiations to areas where a few political decisions required


Wto agriculture negotiations outstanding issues for developing countries

  • Main blockages are currently tariff reduction formula (EU) and domestic support (US) – agreement required for progress in other areas. How can DCs influence?

  • Will require significant acceleration in negotiation pace and readiness by members to move away from entrenched positions

  • Concessions need to be provided for agreement  developing countries must weigh up priorities and consider where their key interests lie

    • At what cost are they willing to compromise to enable agreement?


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