I’ve been traveling a lot in the past month and haven’t posted here as often as I should (I’m writing this after a day spent at the headquarters of the Andean Economic Community in Lima, Peru). In a visit to Washington, Brussels and Geneva in the past month it was pretty clear to me that, as the Economist magazine suggests, the agriculture negotiations are far from the top of the trans-atlantic agenda. This doesn’t mean that the issues have lost their importance: only their urgency, compared to other matters (airbus, China and … China). In Washington and Brussels senior officials and industry leaders know very well what the deadline is (the Economist is right on the timetable) and they recognize that a confection of the sort that they proposed before Cancún won’t work. But Brussels has, more or less, made up it’s mind what it’s prepared to give away (subisides, and about the same level of market access as last time) and Washington has not yet made up its mind to turn up the heat, on this issue. How it does so probably depends, in my view, on the contribution of the G-20 (the Economist is right, again) and when … depends on Ambassador Portman. The Chairman of the Agriculture negotiations in WTO (Amb. Tim Grosser of New Zealand) robustly maintains that he’ll be able to put together an approximation of the final deal in July this year. He’s drafting bits and pieces of it right now. Neither he nor the prinicpals in the negotiations are really phased by the hiccup in the recent technical talks over the “ad-valorem equivalents”. Experienced negotiators recognize that these technical questions—although they make a difference on the content of the deal—won’t prove the main sticking points in an agreement. Can a draft agreement be prepared on agriculture before the Ministerial meeting in Hong Kong? Yes, I think so; it’s possible, although 2006 is more likely. Will the appointment of the Director-General make a difference? No, I don’t think so. The next DG doesn’t take his seat until September. By then the shouting should have begun if we’re to have a deal. He can help steer the process. But it must be kicked-off well before September or we’re looking into 2006 for an agreement. Will the ‘non-agriculture’ market access negotiations (NAMA) go anywhere before the market access aspects of Agriculture are sorted out? No, I doubt it. But my guess is that they’ll follow very closely behind. A bigger question-mark hangs over the outlook for three other crucial elements in the final deal
# Services (market access) negotiations are almost comatose
# There is no obvious consensus on how to draft a practical agreement on the in-principle-extremely-valuable matter of Trade Facilitation
# There is no general solution to the mix of access concessions and other arrangements that should be made to ensure that developing countries (a profoundly various group)
** derive benefits that are at least commensurate—and in a limited number of cases more than commensurate—with their contributions to a more open world trading system
** are appropriately compensated for any shortfall in their expected net benefits from particular aspects of the agreements, such as from the elimination of agricultural export subsidies. A general solution with specific (‘modulated’ is the EU term) effect that distinguishes between the countries that call themselves ‘developing’ in some non-contentious way is a sine qua non of a deal. A drop dead necessity.
Peter Gallagher is a leading Australian consultant on trade and public policy.[bio].
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