Must do list for agriculture negotiations

Next week will see the first seri­ous attempt by WTO offi­cials and cab­i­net-lev­el nego­tia­tors to draft deci­sions by the Hong Kong Min­is­te­r­i­al Con­fer­ence. Agri­cul­ture remains a lynch-pin: as indi­cat­ed by the reports that the Five Inter­est­ed Par­ties (FIPS) will meet in Lon­don to try to bridge dif­fer­ences face-to-face that they have already spelled out over video-con­fer­ences in the past week. I do not believe that they can yet bridge the gap on the ‘head­line’ tar­iff-cut num­ber, but there are three or four oth­er items they need to nail down.

The gap between the US/Cairns/G‑20 demand that the EC lift its tar­iff cut offer from an aver­age 39% to an aver­age 54% (or more) is too big to bridge right now and I believe that nei­ther the USA nor EC wants to force this issueyet. One rea­son is that forc­ing the point of dis­agree­ment means a pos­si­bly mor­tal wound to the nego­ti­a­tions. Expe­ri­ence tells the nego­tia­tors that if you ham­mer home the sharpest dis­agree­ment, all you get is blood; not an agreement.

But, there are at least two more rea­sons. Both sides know they have more time (at least until the end of the first quar­ter next year) and plan on using the pres­sure of the real last days to extract con­ces­sions; from their inter­locu­tors, of course, but also from the intran­si­gent groups in their own domes­tic lob­bies. Also, they want to use that time to probe fur­ther for advances in their own objec­tives and con­ces­sions from the oth­er side. The USA wants to see devel­op­ing coun­try pres­sure build up for more con­ces­sions from the EC. The EC could use more time to secure a sub­stan­tial ‘sup­port­ing deal’ on Geo­graph­i­cal Indi­ca­tions (GIs) and to pres­sure the USA over anti-dump­ing mea­sures (both men­tioned in its pro­pos­al on 29 Octo­ber) and its nar­row con­ces­sions on the trade of the poor­est coun­tries (the ‘least developed’).

They can­not, how­ev­er, let Hong Kong slip by. First, there’s too much to decide to leave every­thing until next May or June (my guess for the ‘last days’). There must be some inter­im steps tak­en in Decem­ber. Sec­ond, there’s the cred­i­bil­i­ty issue. They have the same pres­sure oper­at­ing on them in Hong Kong as they felt post-Can­cún to come up with a cred­i­ble set of deci­sions that con­veys assur­ance that the nego­ti­a­tions will con­clude before they run out of time ( real­ly out of time).

There is no agree­ment until every­thing is agreed: so any­thing done in Hong Kong remains ad ref­er­en­dum to the final pack­age. But it’s time some things were put away. My list for the ‘must do’ at Hong Kong, on agri­cul­ture at least:

  1. Sen­si­tive prod­ucts: there must be more clar­i­ty around the num­ber (pro­por­tion of tar­iff lines), ‘flex­i­bil­i­ty’ and the gen­er­al for­mu­la. There is a chick­en-and-egg conun­drum here between the degree of pro­tec­tion for ‘sen­si­tive’ prod­ucts and the size of the tar­iff cuts. But some more clar­i­ty is need­ed on the mech­a­nisms for the expand­ed use of tar­iff-rate-quo­tas as an off­set for small­er tar­iff cuts affect­ing these prod­ucts. The EC’s pro­pos­als have been round­ly dis­missed by the USA, Cairns Group and the G‑20, but there must be more con­cret­ed pro­vi­sions made in Hong Kong

  2. Spe­cial prod­ucts: the devel­op­ing coun­tries who want to have prod­ucts where there will be low-or-no access improve­ments (for spe­cif­ic, devel­op­ment-relat­ed rea­sons) have failed, so far, to pro­duce any details on the prod­uct list, the means of selec­tion or the excep­tions that will apply. They must come up with the goods in Hong Kong or see their claims loose all momen­tum

  3. Elim­i­na­tion of export sub­si­dies: a sched­ule for elim­i­na­tion of all forms of export sub­sidy and details on the food-aid ‘anti-cir­cum­ven­tion’ mea­sures must be agreed, or most­ly agreed, to get these less con­tro­ver­sial (but still hot) issues out of the way.

  4. Domes­tic sup­port: cuts in de min­in­mis sup­port lev­els, ‘blue box’, and the head­line AMS (‘amber box’)measures. The gaps here are, frankly, small enough. They can be bridged ad ref­er­en­dum, par­tic­u­lar­ly since most of the horse-trad­ing will come when the nation­al sched­ules are pre­sent­ed and ver­i­fied in the months fol­low­ing an agreement.

Three things that would be Nice To Do at Hong Kong (but will prob­a­bly wait until the last minute):

  1. Geo­graph­i­cal Indi­ca­tions: the poor­ly-rea­soned deci­sion of the Euro­pean Court last week (press release, PDF file about 160k) ver­i­fy­ing that the Com­mis­sion act­ed with­in its pow­ers in grant­i­ng a ‘Pro­tect­ed Des­ig­na­tion of Ori­gin’ to Greek feta cheese—thus for­bid­ding the Danes who have made and mar­ket­ed feta since the 1930s (and the French, and the Ger­mans) from con­tin­u­ing to use the name—has appar­ent­ly re-awak­ened the Commission’s flag­ging fer­vor for GIs. The EC’s claims have inflat­ed to the point where they now demand not only that agree­ment be reached on a legal­ly-bind­ing inter­na­tion­al reg­is­ter of GI’s (to pro­tect their 7–800 GI’s) but that the extend­ed pro­tec­tion giv­en to wines and spir­its names should be now pro­vid­ed for ‘all prod­ucts’. Only the reg­is­ter deci­sion fig­ures in the Doha nego­ti­at­ing man­date, how­ev­er. Although the EC on the one hand and the USA, Aus­tralia, Argenti­na and oth­ers remain dia­met­ri­cal­ly opposed, there are sub­ter­ranean pro­pos­als that may bridge at least the ‘reg­is­ter’ issue. It may not be pos­si­ble at Hong Kong, but it would be good to put it away.

  2. Spe­cial Safe­guards: the EC and the G‑10 per­sist with demands for access to a ‘Spe­cial Safe­guard’ that would allow already-high pro­tec­tion to be increased if there were signs of import com­pe­ti­tion while the tar­iff cuts were being imple­ment­ed. Nev­er mind that this is what the Agree­ment is sup­posed to achieve. If the SSG is approved at all, it should be on a strict­ly lim­it­ed basis with a strict­ly lim­it­ed time-frame and should not be avail­able on ‘sen­si­tive’ prod­ucts that would already ben­e­fit from addi­tion­al lev­els of pro­tec­tion.

  3. Due restraint: the ‘peace clause’ that both the EC and USA want to immu­nize them from dis­putes action dur­ing the course of the sub­sidy elim­i­na­tion phase. The US attempt to claim a ‘peace clause’ cov­er for it’s cot­ton sub­si­dies should leave it with few friends on this issue—apart of course from the EC.

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