Edging toward a WTO ‘‘framework’’ agreement

The mem­bers of WTO con­tin­ue to patch togeth­er vague agree­ments promis­ing the lib­er­al­iza­tion of agri­cul­tur­al mar­kets, dri­ven more by the fear of fail­ure than a shared con­vic­tion about the val­ue of suc­cess. But the signs are slight­ly bet­ter today than yes­ter­day that a frame­work for fin­ish­ing the Doha round of WTO trade nego­ti­a­tions will be agreed at the end of this month before the US Pres­i­den­tial elec­tion and the replace­ment of the EC Com­mis­sion puts the talks on hold next (north­ern) autumn. One rea­son to be less pes­simistic is that the so-called “G‑90”—a group of maybe 70 coun­tries from Africa, the Caribbean and very poor (‘least developed&#8217)economies from oth­er regions—may be ready to allow a frame­work agree­ment to go for­ward. This is the group that ‘pulled the plug’ on the Can­cún meet­ing of WTO last Sep­tem­ber because they had­n’t been able to fig­ure out what was at stake for them in an agree­ment. Sev­er­al items on this group’s agen­da have not seen much progress—including a clar­i­fi­ca­tion of the the WTO’s prin­ci­ple of ‘spe­cial and dif­fer­en­tial treat­ment (for poor coun­tries). Today’s “Finan­cial Times”:http://www.ft.com reports that the group has been cajoled by the US, EU and the Direc­tor Gen­er­al of the WTO at their meet­ing last week­end in Mau­ri­tius.  If this is accu­rate, then the hur­dle that nego­tia­tors have to jum to agree the frame­work will be slight­ly low­er. But there are plen­ty of oth­er prob­lems still stand­ing the in way of agree­ment: the great­est of them being the con­tin­ued dis­agree­ments over how to reform world agri­cul­tur­al trade. The terms on which the Euro­pean Com­mu­ni­ty’s (chiefly) would elim­i­nate the use of export sub­si­dies on agri­cul­tur­al prod­ucts now seem near­ly to be agreed between them­selves and the Unit­ed States. The terms include strict future lim­its on the use of gov­ern­ment export cred­its (cred­it terms no longer than 6 months) and on the use of ‘food aid’ dis­pos­al pro­grams as well as on the behav­ior of ‘state trad­ing entre­pris­es’. Still con­tro­ver­sial is the pro­pos­al to ban the use of dif­fer­en­tial export tax­es that advan­tage one class of prod­ucts over anoth­er. But oth­er aspects of a pos­si­ble deal on agri­cul­tur­al trade—particularly agree­ment on cut­ting bor­der protection—remain elu­sive. Attempts by senior trade offi­cials to bridge the gaps in nine months since the col­lapse of the Can­cún meet­ing have not been able to nar­row the dif­fer­ences. The prob­lem is that most par­tic­i­pants want to achieve the ‘sig­nif­i­cant reduc­tions in mar­ket access bar­ri­ers’ that was promised by the Doha man­date, but many includ­ing the EU and USA and most devel­op­ingh coun­tries (India fore­most) also want to hold on to high lev­els of pro­tec­tion for some ‘sen­si­tive’ prod­ucts or, in the case of devel­op­ing cout­nries, a wide range of prod­ucts that they pro­duce domes­ti­cal­ly. Diplo­mats have tried to resovle this basic con­tra­dic­tion by writ­ing around the prob­lem, craft­ing ever more com­plex for­mu­las and ever more pro­lix caveats and ‘escape claus­es’ that would allow every coun­try to sign-on to the same agree­ment but to tai­lor the results to its own lik­ing. They have added claus­es that ‘soft­en’ the impact for dif­fer­ent class­es of coun­tries, ensur­ing ‘flex­i­bilty’ for devel­op­ing cout­nries and even for rich coun­tries such as Japan that are like­ly to refuse to open select­ed mar­kets (e.g. for rice) very much. As I’ve not­ed here before, the result is a mess. Last week­end, off­i­cals and Min­is­ters from the key group of ‘Five inter­est­ed par­ties’ (FIPS: Aus­tralia, Brazil, the EC, India and the USA) met in Paris for a last-ditch attempt to cut through the dis­agree­ments. The five del­e­ga­tions came up with eight vari­a­tions on this approach to mar­ket access. Even­tu­al­ly, they gave up. The chair­man of the Agri­cul­ture Nego­ti­at­ing Group, Ambas­sador Tim Gross­er of New Zealand, is attempt­ing to craft a sin­gle pro­pos­al that all mem­bers could agree—or more like­ly that no mem­ber will disagree—could be a basis for fur­ther nego­taition. It will sur­face as an annexe to the ‘frame­work’ for future nego­ti­a­tions next weekend.

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