Rajan Sudesh Ratna Professor Centre for WTO Studies Department of Commerce Indian Institute of Foreign Trade firstname.lastname@example.org. WTO AGREEMENT ON AGRICULTURE.
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Established through negotiation under the UN Conference on Trade and Employment as the “third” of the Bretton Woods “institutions” for conduct of international relations
The 15 original Uruguay Round subjects
TariffsNon-tariff barriersNatural resource productsTextiles and clothingAgricultureTropical productsGATT articlesTokyo Round codesAnti-dumpingSubsidiesIntellectual propertyInvestment measuresDispute settlementThe GATT systemServices
Sep 86 Punta del Este: launch
Dec 88 Montreal: ministerial mid-term review
Apr 89 Geneva: mid-term review completed
Dec 90 Brussels: “closing” ministerial meeting ends in deadlock
Dec 91 Geneva: first draft of Final Act completed
Nov 92 Washington: US and EC achieve “Blair House” breakthrough on agriculture
Jul 93 Tokyo: Quad achieve market access breakthrough at G7 summit
Dec 93 Geneva: most negotiations end (some market access talks remain)
Apr 94 Marrakesh: agreements signed
Jan 95 Geneva: WTO created, agreements take effect
The original GATT did apply to agricultural trade, but it contained loopholes. For example, it allowed countries to use some non-tariff measures such as import quotas, and to subsidize. Agricultural trade became highly distorted, especially with the use of export subsidies which would not normally have been allowed for industrial products. The Uruguay Round produced the first multilateral agreement dedicated to the sector.
(a) the experience to that date from implementing the reduction commitments;
(b) the effects of the reduction commitments on world trade in agriculture;
(c) non-trade concerns, special and differential treatment to developing-country Members, and the objective to establish a fair and market-oriented agricultural trading system, and the other objectives and concerns mentioned in the preamble to this Agreement; and
(d) what further commitments are necessary to achieve the above mentioned long-term objectives.Agriculture - the original mandate (Article 20)
Subsidies in general are identified by “boxes” which are given the colours of traffic lights:
GREEN BOX (Annex 2 of AoA):
Uruguay Round did not bring about trade liberalisation in agriculture to the desired extent.
13. We recognize the work already undertaken in the negotiations initiated in early 2000 under Article 20 of the Agreement on Agriculture, including the large number of negotiating proposals submitted on behalf of a total of 121 members. We recall the long-term objective referred to in the Agreement to establish a fair and market-oriented trading system through a programme of fundamental reform encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets. We reconfirm our commitment to this programme. Building on the work carried out to date and without prejudging the outcome of the negotiations we commit ourselves to comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support. We agree that special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development. We take note of the non-trade concerns reflected in the negotiating proposals submitted by Members and confirm that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture.
14. Modalities for the further commitments, including provisions for special and differential treatment, shall be established no later than 31 March 2003. Participants shall submit their comprehensive draft Schedules based on these modalities no later than the date of the Fifth Session of the Ministerial Conference. The negotiations, including with respect to rules and disciplines and related legal texts, shall be concluded as part and at the date of conclusion of the negotiating agenda as a whole.AGRICULTURE - THE DOHA MANDATE (November 2001)
Cuts in Overall Trade-distorting Domestic Support (Amber + de minimis+ Blue Box)
Fifth Ministerial Conference in Cancún, Mexico, 10–14 September 2003. The conference ended without consensus.
Ten months later, the deadlock was broken in Geneva when the General Council agreed on the “July package” in the early hours of 1 August 2004, which kicked off negotiations in trade facilitation but not the three other Singapore issues. The delay meant the 1 January 2005 deadline for finishing the talks could not be met.
In the Sixth Ministerial Conference in Hong Kong in December 2005, the Ministers resolved to complete the negotiations in 2006. In pursuance of this objective, they further resolved to establish modalities in agriculture and NAMA no later than 30 April 2006 and to submit comprehensive draft schedules based on these modalities no later than 31 July 2006. In respect of Services, they agreed that Requests may be submitted by 28 February 2006; a second round of Revised Offers by 31July 2006; and Final Draft Schedules by October 31, 2006. The April and July 2006 deadlines were missed because of lack of convergence on the major issues in agriculture and NAMA.
Several mini - Ministerial level meetings were held. Next mini Ministerial is being held on 21st July 2008 in Geneva.POST DOHA
NAMA – Chair: Don Stephenson
Draft modalities paper issued on 17th July 2007.
Draft blueprints issued – 8th February 2008.
Revised – 19th May 2008.
Further revised papers – 10th July 2008 ( Still has 15 + 2 square brackets).FURTHER DEVEOPMENTs
(1) OTDS: US to cut to between $13-16.4 billion ( size of cut 66-73%) Its present OTDS is below US $10 billion. EU to reduce to €16.5-27.6 billion (size of cut 75-85%). For US $ equal or less than 10 billion, the size of cuts would be 50-60%. Reduction 6 cuts in 5 years for developed countries & developing countries will do 2/3rd of the cuts - 9 cuts in 8 years.
(2) AMS: EC to cut by 70% to €20.15 billion; US to cut by 60% to $7.6 billion.
(3) Product specific: AMS caps: Base period for all countries except US to be 1995-2000; special dispensation for the US on the base period.
Proposals on domestic support
Rc = Rg + (100 – Rg) * 100
3 * Rg
Rc = Specific reduction applicable to cotton as a percentage
Rg = General reduction in AMS as a percentage
This shall be applied to the base value of support calculated as the arithmetic average of the amounts notified by Members for cotton in supporting tables DS:4 from 1995 to 2000.DOMESTIC SUPPORT PROPOSALS
Maximum overall average cut for the developing countries is 36% .
If the above formula for the developing countries imply an overall cut of more than 36%, flexibility to apply lesser reductions in proportionate manner across the board.MARKET ACCESS PROPOSALS
Criteria: Food Security, Livelihood Security and Rural Development needs
Rationale: Protection against import surges (leading to price dips) for poor and vulnerable farmers of developing countries
“[For developing country Members other than those referred to in the preceding paragraph, they may apply the maximum remedy provided for above even if this would otherwise entail breach of a pre-Doha bound tariff provided that (a) the maximum increase over the pre-Doha bound tariffs would be no more than 15 ad valorem percentage points or 15 per cent of the current bound tariff, whichever is the higher; (b) the maximum number of products for which this provision would be invoked would be no more than 2-6 in any given period; and (c) this would not be permissible for two consecutive periods. All other provisions would be applicable.] “SSM Proposal contd.
Subsidies to be halved by end 2010 and remaining commitments eliminated in equal installments by end 2013.
As a flexibility, the developing countries to continue to have right for some export subsidies up to 5 years after the end date for elimination of all subsidies.
Disciplines to Export credits, State Trading etc. prescribed in the proposal ( Annexes – J,K & L to the main document).Export Competition
Mr. Pascal Lamy, Director General, reported “that the main blockage is on the Agriculture legs [domestic support and market access] of the triangle of issues” that were being sought to be addressed, and that “it remained clear that the gaps remain too wide”.
The main reason of the deadlock is lack of consensus in Agriculture. The most crucial country is USA.