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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

WTO Agriculture NegotiationsOutstanding Issues for Developing Countries

Tim Ruffer

Oxford Policy Management


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?
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
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

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?