WTO agriculture market access — the movie

You can access the mar­ket access pro­pos­als, as of about 12 Octo­ber, here on the ICTSD site along with a fair­ly good cov­er­age of the lat­est devel­op­ments. I thought about pro­vid­ing some analy­sis of the dif­fer­ent impacts of these pro­pos­als. But by the time I had that done, they might well have changed again—there were sev­er­al sig­nif­i­cant changes between Zurich (10 Octo­ber) and the infor­mal agri­cul­tur­al nego­ti­at­ing com­mit­tee ses­sion on 12 Octo­ber. I decid­ed, instead, you might get more val­ue­from an graph­i­cal com­par­i­son show­ing the dif­fer­ences in the main proposals. 

Click­ing the thumb­nail will show com­par­isons of the impact on tar­iffs of the USA, EC, G‑20 and G‑10 pro­pos­als (.png, 88k). Each chart of pro­pos­als for the devel­oped coun­tries shows the top ‘tier’ as a tar­iff of 300% for the sake of com­par­i­son, but the top tier has in fact no upper thresh­old. In the case of the U.S. proposal—which con­tains a pro­gres­sive lin­ear cut—I have shown the max­i­mum cut in each tier.

There’s an ani­mat­ed ver­sion of the charts here (Quick­time movie, 2.2mb).

This is a nego­ti­a­tion, so the details of the offers will change as pro­pos­als are put for­ward, test­ed and evolve1. In fact, it would be more accu­rate to say that what’s going on is two nego­ti­a­tions, with the most heat­ed being the one that hap­pens in cap­i­tals. The U.S. Con­gress and farm groups and the EC Mem­ber States are try­ing their best to steer from the back seat, as are agri­cul­tur­al and food indus­tries around the world.

It’s impor­tant to under­stand that USTR Port­man, Trade Com­mis­sion­er Man­dle­son share a strat­e­gy for deal­ing with the polit­i­cal econ­o­my at home: they are putting their pro­pos­als in pub­lic for a cou­ple of rea­sons. On the sur­face, it’s the old game of trans-Atlantic one-upman­ship, designed to elic­it quick exchanges. But they won’t nego­ti­ate in pub­lic. The under­ly­ing strat­e­gy is more impor­tant; they’re both try­ing to stay ahead of the pub­lic debate, risk­ing objec­tions from the gallery in order to move quick­ly and hop­ing that the rapid­i­ty of exchanges and top-lev­el support—such as Man­del­son has from his Com­mis­sion Pres­i­dent and from the UK Presidency—will allow them to keep their oppo­nents at home ‘off bal­ance’ and always slight­ly out-of-touch, for now.

More than any oth­er sin­gle fac­tor, it’s this strate­gic ploy that con­firms this is a deter­mined push by both the USA and EC to ensure that most aspects of the agri­cul­ture deal can be ready for Hong Kong. There are still many oth­er things to be done, on mar­ket access alone.

  • The devel­op­ment aspects will be crucial—particularly the treat­ment of ‘spe­cial products’—but dif­fi­cult to sort out before Hong Kong because their pro­po­nents are hope­less­ly late in com­ing for­ward with prac­ti­cal ideas.

  • The lib­er­al­iza­tion of imports of ‘sen­si­tive’ prod­ucts in devel­oped coun­try markets—in effect, those imports con­trolled by tariff-quotas—will demand a hard and prob­a­bly com­plex deal to ‘align’ changes in the pro­tec­tion para­me­ters (size of the quo­ta, in-quo­ta duties, out-of-quo­ta duties) with the lev­el of cuts achieved in sim­ple duties.

The num­ber of ‘sen­si­tive’ prod­ucts allowed in each agri­cul­tur­al tar­iff sched­ule is also cru­cial to the over­all impact of the deal. The EC has shaved it’s ini­tial claim for 10% of tar­iff lines to 8% of tar­iff lines; the USA is propos­ing no more than 1%. As the World Bank point­ed out in the Trade Note I ref­er­enced here, if just 2% of tar­iff lines at the 6‑digit lev­el of tar­iff are exempt­ed from full lib­er­al­iza­tion, the ben­e­fits of the deal could shrink by three-quarters.

1 Since the pro­pos­als first emerged on 10 Octo­ber the EU has mod­i­fied it’s stance; drop­ping the idea of ‘piv­ot­ing’ lin­ear cuts in each of the four tar­iff tiers and accept­ing the tar­iff ‘cap’ that could not be agreed last August (the G‑10 diehards of Switzer­land, Japan, Tai­wan etc may be the last to hold out against the tar­iff cap). The G‑20, too, has offered more pre­ci­sion; adding to the ideas that I iden­ti­fied as a poten­tial break­through in July.

Leave a Comment

Your email address will not be published. Required fields are marked *