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Doha Negotiations – obstacles and alternatives to a successful Doha Round outcome. Lecture 26 Economics of Food Markets Alan Matthews. Lecture objectives. To evaluate Chair’s revised draft modalities February 2008 How much convergence, how much divergence? Role of WTO litigation

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doha negotiations obstacles and alternatives to a successful doha round outcome

Doha Negotiations – obstacles and alternatives to a successful Doha Round outcome

Lecture 26

Economics of Food Markets

Alan Matthews

lecture objectives
Lecture objectives
  • To evaluate Chair’s revised draft modalities February 2008
    • How much convergence, how much divergence?
  • Role of WTO litigation
  • Alternatives to Doha?
    • Regionalism, protectionism
reading
Reading
  • Falconer Revised draft modalities February 2008
  • Josling on litigation
  • Schott, Neary on alternatives
revised draft modalities feb 2008
Revised draft modalities Feb 2008
  • Export subsidies
    • Elimination agreed by end-2013, but phasing of phase out still contested
  • Domestic support
    • OTDS and AMS limits
    • AMS cuts
    • Blue Box ceilings
    • De minimis cuts
    • Green Box changes
revised draft modalities feb 20081
Revised draft modalities Feb 2008
  • Market access – broad outlines
    • Tiered reductions
    • Minimum average cut in tariff commitment
    • Future of Special Agricultural Safeguard
    • Sensitive Products
    • Tariff escalation
    • Tropical products
    • Preference erosion
    • Tariff simplification
outlook for a deal
Outlook for a deal
  • US commitment to successful outcome doubtful despite Bush rhetoric
    • Farm lobby and Congress deeply suspicious (e.g. CAFTA vote)
    • Trade Promotion Authority ran out mid 2007
  • EU the champion of a Development Round
    • Has invested much in a successful Round
    • But agriculture ministers (i.e. France) keeping tight rein on the negotiators
  • Developing countries (G20) may feel no deal is better than a bad deal
    • Concerns of weakest developing countries must be addressed (e.g. cotton)
politics of the endgame eu
Politics of the endgame - EU
  • Mandelson and the mandate
    • Can the French/Irish block a deal?
  • Timing
    • Incentives for an early deal
    • German presidency
  • The shape of its acceptable deal
    • Looking for concessions on NAMA, services and rules (anti-dumping, trade facilitation and Geographical Indications)
politics of the endgame us
Politics of the endgame - US
  • The US position
    • Bush and political will
    • Timing - Trade Promotion Authority
      • Attitudes of the new US Congress
    • The new Farm Bill
    • The biofuels factor
    • Aftermath of Presidential election
    • The shape of its acceptable deal (limited offensive gains, adjustment issues)
politics of the endgame g20
Politics of the endgame – G20
  • Brazil – now experiencing exchange rate appreciation
  • China – accepted tight restraints on trade policy on accession in 2001
  • India – concerned to protect its defensive interests
  • But…context of strengthening world market prices
doha fails to conclude
Doha fails to conclude?
  • URAA continues
  • It would be wrong to conclude that the mosaic of agricultural policies across the world, post-1995, is a stable set
    • policies are being challenged, and changed
  • This would continue even if there was no conclusion to the Doha Round
  • But would it survive….?
litigation as a source of pressure for changes in rules
Litigation as a source of pressure for changes in rules
  • The significance of the WTO Dispute Settlement Understanding
  • The WTO panel process
  • Some important agricultural cases
    • EU sugar
    • EU bananas
    • US cotton
    • EU GSP
panel findings on sugar and cotton
Panel Findings on Sugar and Cotton
  • US Upland Cotton (Brazil)
    • Production flexibility contract payments (1996 Farm Bill) and Direct payments (2002 Farm Bill) are not eligible for the green box because fruit & vegetables cannot be grown on the land
  • EU Sugar (Australia, Brazil, Thailand)
    • C sugar exports are subsidised
    • ACP and Indian re-exports are wrongly excluded from EU totals
regional integration
Regional integration
  • Regional integration agreements
    • e.g. Mercosur
  • Trade creation… but also trade diversion effects
  • Stepping stone or stumbling block to more open trade?
dangers of growth in protection
Dangers of growth in protection?
  • Continuing global economic imbalances..
  • ..as well as shifts in geo-political power
  • Many of the new protectionist demands rally consumer as well as producer interests (environmental standards, labour standards, food safety standards)
  • Rising trends in income inequality linked to trade (outsourcing..)
  • Nationalistic trends (energy, sovereign wealth funds,…)