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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