Canadian move for “new landing zones” spurned

A Canadian initiative to advance the Doha Round agriculture talks has met with rejection from major developing countries for veering from existing mandates for the Round.

by D. Ravi Kanth

GENEVA: Major developing countries – China, India, Brazil and South Africa – unambiguously rejected on 3 July a proposal from Canada to set “new landing zones” in the Doha Round agriculture package without adhering to the existing mandates that have been negotiated since 2001, trade envoys told the South-North Development Monitor (SUNS).

In an attempt to frame elements for the post-Bali work programme by the end of July, Canada has circulated a “matrix” proposal which broadly suggested a plan for the so-called “gateway” issues in the Doha Round agriculture package.

At a meeting hosted by Canada on 3 July, trade envoys from the United States, the European Union, Norway, Switzerland, Australia, New Zealand, China, India, Brazil, South Africa, Colombia and Mexico took part in discussions on the elements in the Canadian proposal.

The proposal has listed individual elements as well as the 2008 Rev. 4 revised draft modalities in a detailed matrix framework. In agriculture, for example, it says that “consensus on Rev. 4 as an overall package [is] not possible” on the three pillars of the agriculture negotiations, i.e., domestic support, market access and export competition.

This is misleading and factually incorrect, as a large majority of WTO members have repeatedly demanded that the Rev. 4 text must remain the basis for concluding the negotiations in all the three pillars of agriculture, several developing-country officials told SUNS.

In the domestic support pillar, according to the Canadian proposal, the “level of ambition foreseen in Rev. 4 is no longer doable for some members.”

Until now, only one member – the US – is not able to accept Rev. 4 because of the country’s current farm bill which was enacted last year. The US farm programmes go well beyond the proposed draft commitments in Rev. 4 and the US cannot agree to overall trade-distorting domestic support within the $14.5 billion limit under that text.

On public stockholding for food security in the developing countries, Canada has suggested three points. They include: (i) “G33 insists that discussion be based on November 2012 proposal,” (ii) “other members reject the concept of including market price support in the green-box regardless of stated policy objectives,” and (iii) “members also concerned with possible trade-distorting ‘spillover effects’ (including export and import substitution).”

All the three elements on public stockholding programmes in the Canadian proposal are based on statements that have been made by the US, the EU, Canada, Australia, Pakistan and Thailand, among others.

The Canadian paper does not reflect the views expressed by an overwhelming majority of developing and least-developed countries seeking a permanent solution based on the three alternatives the G33 developing-country grouping had proposed, including Green Box consideration for market-based support for public distribution schemes.

As regards the market access pillar of the agriculture negotiations, the Canadian proposal claims that “new ideas and proposals are generally seen as lowering ambition relative to Rev. 4 tiered formula”, and “some members favour recalibrated and simplified approaches to reducing tariffs, while other members remain resistant to departures from Rev. 4.”

Further, it maintains that “there are sharp divergences among members over the degree to which safeguards and flexibilities are linked to overall ambition [and] G33 rejects [the] linkage.”

Canada’s proposals on market access seem factually incorrect as a large majority of developing and the poorest countries demanded that the Rev. 4 tiered formula with flexibilities must remain as the basis for the post-Bali work programme.

On export competition, the Canadian proposal has maintained that this pillar is “generally seen as most doable and stabilized ... Requires outcomes in other pillars to be politically viable.”

Even on export competition, Canada is incorrect because several countries pressed for clear disciplines on export competition and food aid in line with the 2008 revised draft modalities.

In short, without mentioning the 2004 July Framework and the 2005 Hong Kong Ministerial Declaration, Canada is preparing the ground for imposing new landing zones that are not based on any of the previous mandates, several trade envoys maintained.

RAMs’ exemption

At the meeting, Canada proposed that a major gateway issue in the post-Bali work programme is the removal of the exemption for the Recently Acceded Members (RAMs) such as China from undertaking any reduction commitments in the domestic support pillar.

Canada also sought to know what needs to be done with the 2008 revised draft modalities, and how to proceed on setting new landing zones on overall trade-distorting domestic support.

Ottawa’s proposal received support from the trade envoys of major industrialized countries, who want to give short shrift to the existing Doha Round mandates like the 2004 July Framework, the 2005 Hong Kong Ministerial Declaration and the unsettled 2008 revised draft modalities.

In sharp response, major developing countries told Canada that they will not enter into any discussion based on the matrix proposal because it violates the previous mandates. China pointedly asked Canada whether it prepared the matrix proposal for its junior officials, said participants familiar with the meeting.

The RAMs like China, for example, are exempted from undertaking reduction commitments in the existing mandates. “For us the entire domestic support pillar and all the unresolved issues in that pillar are a gateway issue,” said a trade envoy from a developing country.

“Unless there is complete clarity on the domestic support pillar, including the issue of Aggregate Measurement of Support (AMS) in which major industrialized countries are required to substantially reduce their current entitlement, there is no way we can move forward,” the envoy argued.

A trade envoy from a major developing country at the meeting asked the US whether it is going to reduce its AMS, which is supposed to be brought down to $14.5 billion as part of the agriculture negotiations.

Commenting on the 2008 revised draft modalities, the four major developing countries said categorically that Rev. 4 must remain the basis for concluding the negotiations at the 10th WTO Ministerial Conference in Nairobi, Kenya, later in the year.

As regards the landing zones for the overall trade-distorting domestic support, the EU suggested that it should be decided by the Nairobi ministerial meeting.

The developing countries also flatly turned down a move to fix a deadline for submitting initial offers because of lack of resolution of all major outstanding issues in the Doha Round agriculture package.

“There is no prospect for a post-Bali programme with precise modalities,” a developed-country trade envoy maintained. “Countries must stop adopting tactical positions and avoid cherry-picking,” the envoy argued.

Another developed-country envoy suggested that the “recalibration” package remains uneven, due to which it is failing to get support. So far, only a few industrialized countries are willing to support “recalibration” while a majority of developing and least-developed countries have expressed their opposition, the envoy argued.

In a separate development, several trade envoys of the African countries maintained on 3 July that all issues in the Doha Development Agenda are open for the Nairobi meeting.

Rwanda, Uganda, Tanzania and Egypt, among others, said they will not tolerate attempts to remove all major issues in the Doha agriculture and developmental dossiers to appease some major industrialized countries, an African trade official told SUNS.

In a nutshell, Canada has now taken the leadership role in cobbling together a dubious work programme with elements that do not correctly reflect the views expressed by a large majority of members during the last six months. Canada’s proposals signal the ugly and undemocratic method to kill the Doha Round negotiations without addressing the core issues for which the Round was launched in 2001. (SUNS8057)            

Third World Economics, Issue No. 596, 1-15 July 2015, pp9-10