The negotiations entered a new phase early Saturday afternoon with the issue of a new ‘chairmans’ text’ (more details below). We’re now at Step 4[⇒ related story] in the negotiations where most of the bargaining takes place. This revised Chairman’s text is under detailed discussion in smaller groups of key countries chaired by the Chairman of the Ministerial Meeting (Mexican Trade Minister, Derbez), complemented to some extent by national statements in the ‘plenary’ meetings. One way to describe the situation is that this huge meeting, spread out over a 15km stretch of the Cancun peninsula, presently resembles a very confused ‘pot-luck’ buffet to which the diners have contributed plates of every variety from soup to dessert. Many of the dishes are poorly prepared and some of them probably taste every bit as bad as they seem. The buffet is now under attack by an unruly crowd of diners, each of whom is trying to push his or her way to the edge of the table to extract some sort of meal from the confusion. Whether they have their pick of the table or succeed only in picking up the left-overs, none of them seems likely to dine well … On the crucial issue of agriculture, the revised Chairman’s text that appeared early Saturday afternoon looks very much like the first version of the text, with some subtle changes in the proposals. The decision to be taken on agriculture is now being described as a ‘framework’ for negotiations: the structure of a final agreement without the numbers that will finally determine the size of the cuts to tariffs or subsidies. It’s chief characteristics are: — Domestic supports —
Slightly tighter rules and some (not yet specified) cuts. These include # A faster start to the reduction of trade distorting farmer payments
# Confirmation that the big industrialized economies that use them most will be able to continue some payments (not exceeding 5% of the value of their heir agricultural production) that require farmers to cut their production to a fixed proportion of their historical output. These so-called ‘blue box’ payments will sanction, for example, a continuing $10billion annual payment to American farmers.
# A tightening of the definition of the category of supports (‘green box’)in where governments may continue to provide payments without restraint—if they can afford to do so. — Market access —
Confused and complicated provisions for cutting tariffs and opening up tariff-quotas with ample room for protectionists in Europe, North America and North Asia to minimize the impact of liberalization on highly protected markets and even weaker requirements for ‘developing’ countries such as Brazil, India etc. # The ‘blended’ formula of optional methods of cutting tariffs survives from the EU-US joint text. In its current form it is structured in a way that allows countries to cut high tariffs on ‘sensitive’ products by much less than lower tariffs on products where they already permit imports. This is, of course, absurd since the most protected products (sugar, meat, dairy, rice and some other grains) are precisely where most of the distortions in world food trade are to be found.
# The Tariff Quotas (TQs) that were created in the Uruguay Round of negotiations to guarantee a small ‘crack’ in the highest tariff walls around protected agricultural markets may (or may not) be opened up a little more by the proposed rules. In the current formulation, this mode of liberalization seems to be optional.
# There are a number of possible ‘belts-and-braces’ clauses—some in ‘square brackets’ because they have only minority support—that pretend to either strengthen the overall outcome on market access or add more ‘flexibility’ to rules that already have very uncertain application. — Export Subsidies —
The text has not changed much apart from the addition of one clause which appears to call for the negotiation of a date for the elimination of all export subsidies, and not merely those on products ‘of interest to developing countries’—which is still the burden of the offer from the European Communities.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher