Grosser ‘status report’ on WTO agriculture negotiations

The stories on progress in the agriculture negotiations—including my “previous post”:http://www.petergallagher.com.au/textpattern/index.php?event=article&step=edit&ID=443—are based on the hope that the G-20 paper on market access presented at Dalian will be a basis for agreeing on real reform in market access; an aspect of the reform that the World Bank calculates offers more than 90% of the potential gains. But the differences in the positions of governments remain wide: as Chairman Tim Grosser’s ‘status report’ on the talks, issued last week reveals The press stories, such as “this from the Financial Times”:http://news.ft.com/cms/s/fca51f80-f402-11d9-af32-00000e2511c8.html reporter in Dalian, are hedged. Perhaps because the writers are, understandably, not sure whom to believe. Tim Grosser, the outgoing Chairman of the Agriculture negotiating group issued a ‘status report’ last week that reflects a much more sobering view of the lack of current agreement in most areas of the agriculture negotiations. And the WTO website is still headlining the assessment of it’s Director General that the Doha round as a whole is ‘”in serious trouble”:http://www.wto.org/english/news_e/news_e.htm’. If the prospect of reading the Grosser ‘status report’ seems too much (and I, for one, couldn’t blame you for feeling that way), I’ve included below my own summary of what the Chairman said.





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h2>Summary: Chairman's 'Status Report' Purpose: to get some more 'guidance' from WTO members on outstanding issues before attempting to produce his 'approximation' of a result for the end of July.

Domestic support


  1. General

    1. Members seem agreed that they want formulas that cut high levels of trade distorting support without focussing in the first place on 'scoring a political point' by 'harmonizing' the highest and lower levels. But those developed countries with very high levels must be ready to make a (larger?) contribution to an agreed reduction.

  2. Trade distorting

    1. Final Bound AMS



    • [Recall: The most important provision on domestic support in the 'Framework' from last July is a two-part, 'belts and braces' approach to cutting trade distorting support. It requires a formula for cutting the final bound levels of AMS reached in the implementation of the Uruguay Round Agreement on Agriculture and it requires a formula for cutting the 'overall level' of trade distorting support (there is also a 20% 'downpayment' on this cut). The 'overall level' comprises the final bound AMS, the 'de minimis' levels of support and the 'blue box'.]
    • Since more than 80% of all AMS is 'owned' by USA, EC and Japan, the key practical question is: "In what tier do their AMS levels fall" assuming that there are 3 or 4 tiers in the formula for cutting AMS
    • EC (US$59.8 billion), the US (US$19.1 billion) and Japan (US$35.9 billion)
    • Other issues about the formula will flow from this decision
    • Including where to place the AMS of the 17 developing countries that accepted AMS obligations in 1995




    1. Overall reduction in trade distorting support




    • Again: where should the two or three tier 'thresholds' be set?
    • What should be done about cuts in the support levels of the majority of developing countries that do not have AMS obligations?
    • Discussion of separate cuts in de minimis support and tighter 'blue box' criteria postponed until after September




  1. Green Box

    1. Grosser calls for guidance on some 'development friendly' criteria that could be used to assure developing countries that the 'Green box' will be available for them in the development of their agricultural sectors. He appears to give less weight to the concerns of many that the 'Green box' is being used as a circumvention measure (and therefore needs to be tightened).


Export competition


  1. The 'structure' and the 'end point' of the cuts is already agreed (progressive elimination based on end-points of the UR schedules)
  2. Questions to be left for after September

    1. How to establish parallel commitments for elimination of subsidies in export credits, STEs and Food Aid
    2. What disciplines should apply to export credits of less than 180 days
    3. Identifying a credible 'end date' for elimination
    4. 'Use of monopoly powers' by STEs
    5. Definition of the entities to be covered by the STE's provisions



  1. Decisions needed for 31 July

    1. STEs: Government financing and underwriting of STE losses (to be identified as an export subsidy)
    2. Food aid: (In view of proposals from EU, India and others that would 'fundamentally change' the food aid system to prevent food aid being used for 'commercial displacement’)a decision protecting the use of food aid in emergency situations with other issues, including monetisation of food donations, to be left until September


Market Access


  1. [Grosser says that this is the 'most complex and least advanced' of the three pillars. His report calls for decisions on the fundamental issues; there is no focus on finer detail as there is in the other pillars with the objective of getting at least partial agreement]
  2. Decisions needed on 'at least basic structural issues' by end of July

    1. Tiers and formula



    • Unlikely to agree on number of tiers or thresholds until there is agreement on the nature of formulas within the tiers
    • Must agree, therefore, by 31 July on

      • Number of tiers
      • Thresholds of each tier
      • Description of formulas within tiers (not numbers?). Grosser does not identify any of the options.




    1. Must agree in parallel on the nature of concessions for 'sensitive' and 'special' products


Cotton

Parallel action is needed on the domestic support, export competition and market access issues as they apply to the 'trade track' of the initiative on cotton.

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