TWN Info Service on WTO and Trade Issues (Oct07/01)

2 October 2007

Two week "break" for WTO agriculture talks

On 21 September there was a open-ended agriculture meeting in WTO at which the WTO's agriculture negotiations Chair, Ambassador Crawford Falconer, announced a two-week break in the agriculture talks and that meetings will start again on the week of 8 October.

However, many delegates believe that the real negotiations will proceed in any case, in small groups, including in the expanded G8.

At the meeting a few members directly or indirectly criticised the existence and operation of a small group of members, which they said would detract from the transparency of the multilateral process.   Although they did not mention the G8 or G8-Plus by name, it was apparent that they were referring to this process.

According to a diplomatic source, the G8-Plus will meet again at higher level from 1 October, while a lot of technical work will continue among group members next week. 

At the meeting, Falconer gave a report on the extent of progress on various issues. 

The article below was published in the SUNS (South North Development Monitor) on 24 September.  It is reproduced here with the permission of the SUNS.  Any reproduction or re-circulation requires the permission of the SUNS (sunstwn@bluewin.ch).

With best wishes
Martin Khor
TWN

Two week "break" for WTO agriculture talks

Published in SUNS #6329 dated 24 September 2007 

By Martin Khor (TWN) Geneva, 21 Sept 2007

The WTO's agriculture negotiations Chair, Ambassador Crawford Falconer of New Zealand, announced today that there will be a two-week break in the agriculture talks and that meetings will start again on the week of 8 October.

However, many delegates believe that the real negotiations will proceed in any case, in small groups, including in the expanded G8. In effect the agriculture negotiations may go "underground", or below the radar screen of the multilateral process.

At an "open-ended" informal meeting (to which all members are invited) this morning, a few members directly or indirectly criticised the existence and operation of a small group of members, which they said would detract from the transparency of the multilateral process. (See end of article).

Although they did not mention the G8 or G8-Plus by name, it was apparent that they were referring to this process. The G8 process has in the past two weeks consisted of a flurry of meetings at the level of senior officials/Ambassadors and at the level of experts.

The US chief agriculture negotiator, Joseph Glauber, told journalists he was heading back for Washington, and would be back in Geneva in the week of 1 October.

According to a diplomatic source, the G8-Plus will meet again at higher level from 1 October, while a lot of technical work will continue among group members next week.

The G8 comprises the US, European Union, Brazil, India, Japan, Australia, Argentina and Canada. Earlier this week, China, Indonesia, South Africa, Jamaica and the Dominican Republic were also invited to take part, following a complaint from India that the G8 was not representative of the diversity of views among developing countries.

There is a strong undercurrent of resentment among many developing countries about the formation of the G8 and its process, even though more developing countries are now in its fold.

They recall that in the wake of the G4 Potsdam collapse at the end of June, the G4 members had disbanded their small group, and that meetings at the WTO had then agreed that the future negotiations would be in the multilateral setting of the WTO, in which all members would take part.

The open-ended meetings (which all members can attend) and the Room E meetings (to which 36 delegations including coordinators of the various groupings are invited by the Chair of the agriculture negotiations) are seen as parts of the multilateral process.

But many developing countries consider the G8 process as un-transparent, exclusive and outside the multilateral process.

Another burning issue in the corridors of the WTO is the significance (or otherwise) of the statement by the US chief negotiator Joseph Glauber in the Room E agriculture meeting on 19 September that it could work within the parameters of the Chair's proposed range for domestic support, if other members could also accept the other ranges in the text.

Though the US did not mention any figures in dollars, its statement was taken to mean it could accept the range of US$13-16.4 billion as the cap for its overall trade-distorting support (OTDS).

Falconer on Wednesday night indicated to journalists he thought this was significant, and some diplomats said they welcomed this progress. In Brussels, the European Commission's trade spokesman Peter Power said the US move could help conclude the Round.

However, US diplomats and US Congress leaders on agriculture issues themselves played down the significance of what the US was supposed to have said in Room E.

According to a report in the WTO Reporter, Glauber and other US negotiators on 20 September sought to play down claims that they had made a significant concession and they had told representatives in Geneva that Glauber's statement accepting Falconer's range of figures was nothing new.

The US delegates said that in fact a similar statement was made by the US Trade Representative Susan Schwab at the APEC Summit in Sydney without any accompanying fanfare.

The WTO Reporter article said several officials seized on the US statement (in Room E) and described it as a positive development, "but the rapturous welcome from some quarters has clearly annoyed US officials who believe too much attention is being focused on US farm subsidies "

Another report, from Washington, in the National Journal's Congress Daily, said that the US offer on farm subsidies was treated skeptically as it had been made without discussing it with US congressional agricultural leaders.

The report said the House Agriculture Chairman Peterson said he was not consulted and called the reported offer problematic, saying "If we are going to agree to some kind of framework to take this down without some kind of solid proposal on the other side it looks like we are negotiating with ourselves."

Senate Agriculture Chairman Harkin likewise said he was not consulted but he could support a Doha deal if it reflects a balance of US domestic support cuts plus tariff cuts by other countries, adding: "If it is not a good deal for US farmers it would likely face a difficult road to approval by the US Congress."

Republican Senate Agriculture ranking member Saxy Chambliss said: "I suspect reports of a new offer by USTR are the result of wishful thinking in Geneva."

An aide to Senate Finance ranking member Charles Grassley said: "It would appear the Falconer comments are overblown. To my knowledge there has been no new US offer nor any breakthrough."

The report also quoted US farmers' leaders as being negative on the news.

At the agriculture open-ended meeting at the WTO on Friday, Falconer told members that the Room E meetings involving 36 delegations had covered all areas in his draft "modalities" text in the past three weeks, according to a trade official.

This included for the first time the US agreeing to negotiate numbers in the ranges in his draft, he said. Among those ranges are cuts in overall trade-distorting domestic support that would bring the US limit down to between $13bn and $16.4bn. He told the meeting that the US made clear that this depends on what is achieved in other areas.

Falconer reported on the latest week's discussions and his plans for the next four weeks -- the next two weeks would be for members to work among themselves and then there would be two weeks of his meetings.

Falconer then reported on each category of issues that had been discussed in the previous week in Room E.

Under market access and developing countries, he reported on special products, special safeguard mechanism (SSM), tropical and diversification products, preference erosion, commodities and tariff escalation.

On Special Products, Falconer said the detailed discussion of indicators for establishing that the selected products are important was practical, technical and "object-oriented". However, a number of issues remain, he said.

On SSM, he said the discussion was robust, a lot clearer, and a lot more honest. One issue that has emerged more clearly, he said, is whether the safeguard is for dealing with possible negative effects of liberalization in this Doha Round (which would justify preventing the safeguard tariff from rising above current "bound" commitment levels), or whether it is more than that (which would allow the safeguard to raise tariffs above the levels bound in the Uruguay Round).

But it is also clear that no one wants to use the safeguard "scores of times", he added.

On the issues of tropical products, preferences, commodities and tariff escalation, he said there is no consensus on these issues but "we are inching towards and ever more realistic appraisal of what our options are."

Delegations are working seriously on these issues and those that have drafted lists of products are now working on the lists and checking overlaps, he said. These are areas where more of the responsibility lies with delegates to work towards consensus.

On Domestic Support, Falconer said that in addition to the US statement, progress was also made on overall trade distorting support and the Amber Box, particularly with members showing a new openness to consider each others' positions on the base periods for cuts.

There was little discussion of the Blue Box, but on the Green Box members' concerns were clarified, particularly on the "fixed and unchanging" base periods used to ensure certain programmes are not related to changes in production, he said. (The relevant programmes are those dealing with direct income payments, investment programmes and regional assistance programmes).

On cotton, Falconer said there was a clear understanding that the main responsibility lies with the US, "that it was a ball that was in its court". More discussions are needed on this, he said.

On Export Competition, Falconer reported little or no movement on exporting state trading enterprises and on the annual reductions that would lead to the agreed elimination of export subsidies. But on export credits and food aid members want to undertake more technical work or drafting, which they should do among themselves, he said.

On monitoring and surveillance, Falconer said there are drafts from the Cairns Group and the G-20. He said the two groups and others should get together so that members have a single text to work from.

On the negotiating process, Falconer said in the next two weeks delegations should continue working among themselves and urged members to produce texts for negotiators to discuss. He might produce two or three of his own; none of these would be revised draft "modalities".

Beyond that, he could not predict what would happen. The possible options are: (1) yet another cycle of consultations, which he described as unlikely because political events might overtake the process; (2) by then members will have worked with the chair to produce a text in the fortnight 8-19 October; (3) another pause and the chairperson produces another draft.

Venezuela asked the Chair what he meant by "political events". It questioned if such political events should be dictating the time schedule. If the process is working well, what is around the corner that could stop the process?

In response, Falconer said that at some stage ministers might want to step in.

Paraguay supported the chair's process and said members would be working hard, for example in the Cairns Group and G-20 and in the informal group of developing countries (which Paraguay chairs).

Ecuador said that no one would oppose small groups from moving forward, but insisted that results from such small groups' work must be discussed with all members to protect transparency as small members like Ecuador cannot take part in the small groups.

Falconer said members could assume that had to happen. "There is no secret passage to the chairman's right hand in this exercise," he said.

Cuba said it was concerned that issues important to many countries such as tropical products, preferences and tariff escalation were not given enough time in the Room E meetings. It was critical of the small group meetings (apparently referring to the G8 process).

It said it had no problem if the Chair produces documents but would not want a small group of members to produce papers on behalf of all.

It was skeptical about the ability of smaller groups to succeed, citing failures of the G6 and the G4 in 2006 and 2007. It noted that another Group was popping up again, despite these failures.

It also called for a longer reimbursement period (720 days instead of the present shorter period) for export credit given to net food importing developing countries under proposed export credit disciplines.