Second Grosser text

The proposed basis for agreement on the key topic of Agriculture has been distributed—at the very last moment (Friday morning in Geneva). Ambassador Grosser’s second attempt is more vague on market access and on the manipulation of the ‘blue box’ of domestic supports. But it now has greatersymmetry between the derogations available to industrialized and developing countries from the basic obligation to achieve ‘substantial reductions’ in market access barriers. ‘Sensitive products’—the cop-out category chiefly for industrialized countries—is no longer defined extensively as, potentially, all products to which a tariff-quota applies: there will now be an integer determining the scope of ‘sensitive’ tariff lines as there will be for the ‘special’ products that developing countries, alone, will be able to designate. What will be implied by ‘sensitivity’ or ‘special’ products will be for future negotiation, save that ‘substantial’ tariff cuts and some expansion of Tariff Quotas will be required for the sensitive products. The general tariff cuts to apply to all but ‘sensitive’ and ‘special’ products have not been further characterized: they will be harmonizing and tiered. The possibility of a tariff ‘cap’ remains alive. Unfortunately, there is no requirement for TQ expansion in addition to tariff cuts in any products other than the to-be-desginated ‘sensitive’ products. The press (AFP) is reporting that the proposal to eliminate the use of export credits at terms longer than 180 days is new and an additional concession by the USA. It’snot. What does seem to be new is that export credits with terms less than 180 days may be ‘non-compliant’ and subject to elimination by reason of interest rates or other provisions.

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