TWN Info Service on WTO and Trade Issues (May08/13)
14 May 2008
Third World Network

Agriculture: Talks to continue on 8-9 May, no text before week of 12 May
Published in SUNS #6467 dated 5 May 2008

Geneva, 30 Apr (Kanaga Raja) -- The Chair of the agriculture negotiations at the WTO announced on Wednesday that he is calling another round of meetings on 8-9 May, in response to members' requests for more time before he produces a revised draft modalities text, which he said will now not be circulated before the week of 12 May.

The announcement by the Chair, Ambassador Crawford Falconer of New Zealand, came at an informal open-ended meeting of the Special Session of the Committee on Agriculture.

According to trade officials, the members consulting on tropical and preference products said that they are making progress and asked for more time. Also, a revised paper and accompanying explanatory note on possible partial designation modalities for sensitive products was tabled at the meeting by six countries - Australia, Brazil, Canada, the EU, Japan and the US.

The two days' of further meetings are to discuss the progress that members have made by then. The Chair and the members will assess the situation and decide what to do next.

"That's the way I've left it with them, and they seem comfortable with that," Falconer told journalists after the meeting. (see below).

According to trade officials, the six countries working on domestic consumption estimates for sensitive products - Australia, Brazil, Canada, EU, Japan and the US (speaking on their behalf) - presented a revised text and a new written explanation of their proposal. They said that this deals with some concerns raised by members in the previous meeting (on 15 and 18 April), including some differences within the six.

According to trade officials, the revised proposal from the six countries includes the removal of provisions allowing product categories to be sub-divided in limited circumstances. And it outlines options (in square brackets to reflect differences of opinion) for setting quotas on parts of product categories. Bananas have been removed from the list of products that could potentially be sensitive.

Trade officials said that the six countries recognize that the method on its own is not enough, and that members will want to assess the impact on specific products imported into specific countries before they can agree to this proposed part of the "modalities".

Six key importing countries (Canada, Japan, the EU, Norway, Switzerland and the US) are promising to supply their domestic consumption data at the same time as the next revised "modalities" draft is circulated.

According to trade officials, almost all speakers said that they would need more time to assess the revisions. Most welcomed the effort made by the six countries, which Falconer described as significant progress, despite some countries' reservations.

Several countries voiced concerns that the method and its variations are tailored to deal with specific concerns among the six authors of the paper.

Trade officials said that a number of developing countries continued to object to the special treatment given to fruits and vegetables (where the sub-categories are defined much more narrowly and causing fears that market access through tariff quotas might be reduced). China and India said that this should mean that Special Products would also be tailored to individual needs.

Countries such as Argentina and others also complained that the process takes too little account of concerns outside the six authors of the paper and amounts almost to a fait accompli. Several called for their positions to be included when the Chair writes the section on the method in his next draft. New Zealand asked for its proposal for a cross-check on estimates for cheese to be included.

The EU said that the compromise proposal is an essential means of achieving an overall ambitious result on market access. These limited flexibilities are the only way of achieving that, the EU said.

With regards to tropical and preference products, the Tropical Products Group (Costa Rica speaking) and the African-Caribbean-Pacific Group (Mauritius speaking) said that they were continuing to have fruitful discussions with importing developed countries and reported progress. They asked for more time to complete their discussions. The EU suggested two more weeks of discussions.

Japan and Switzerland circulated a new proposal on export prohibitions and restrictions, which trade officials said would tighten disciplines already contained in the present draft modalities text (para 163-179).

The two countries said that this is in response to the current situation of high prices and shortages in some areas, and is designed to ensure food security for importing countries.

Japan said that it would be happy to discuss details further, including how best to recognize the needs of importing developing countries.

[A posting at the International Economic Law and Policy blog, notes that many food producing countries have recently imposed bans, quotas or taxes on the export of rice, wheat, barley, and soybeans. Countries that have imposed such restrictions include Brazil, Argentina, Thailand, Vietnam, China, India, Egypt, Indonesia, Russia, and Kazakhstan. The IELP blog points out that in terms of the Marrakesh Treaty and its annexures, WTO members may impose temporary export restrictions on foodstuffs under GATT XI: 2(a). And if the member, putting in place export restrictions is a developed country, this has to be in compliance with the notification requirement under the Agriculture Agreement, Art. 12. It appears, therefore, that the above identified countries are within their rights to impose the export restrictions. SUNS]

The proposal tabled by Japan and Switzerland on export prohibitions and restrictions said that where any Member institutes any new export prohibition or restriction on foodstuffs in accordance with paragraph 2 (a) of Article XI of GATT 1994, the Member shall observe the following provisions:

(a) any new export prohibition or restriction shall be limited to the extent strictly necessary for the Member, taking into consideration the Member's situation of production, stocks, volume of domestic consumption, etc, for the foodstuff. Due consideration shall be given to ensuring food security of developing country Members.

(b) the Member instituting the new export prohibition or restriction shall give due consideration to the effects of such prohibition or restriction on importing Member's food security, in particular, (i) food imports which would otherwise occur in importing Members in the absence of such prohibition or restriction, and (ii) secured implementation of food aid toward net food-importing developing countries.

( c) before any Member institutes an export prohibition or restriction, it shall give notice in writing promptly in advance to the Committee on Agriculture. The notice shall comprise such information as the nature and the duration of the measure, the reason for introducing it and other necessary considerations. The Member shall consult with any other Member having a substantial interest as an importer with respect to any matter related to the proposed measure in question.

If the consultations fail to settle within [60] days after the beginning of the consultations, a standing committee of experts shall render its judgment on the measure in question, which shall be binding. Any new export prohibition or restriction shall be stayed pending the consultations and that standing committee's judgment. The Member instituting such export prohibition or restriction shall provide, upon request by any Member, all necessary information.

According to trade officials, several speakers said that the proposal is "timely" because of the present situation, but members of the G-20 said that they prefer the G-20's proposal, which forms part of the Chair's present draft. India said that developing countries would not be able to announce prohibitions and restrictions in advance.

On the process, the Chair asked members when they thought he should produce his next revised draft modalities text.

According to trade officials, one or two countries suggested the week of 12 May. Another country suggested "mid-May" (the EU), while a few others suggested that the Chair would be the best judge.

Falconer said that clearly members need to discuss the sensitive products proposal multilaterally and need time to study it first. He therefore suggested that negotiators meet again on 8-9 May in what could be a combination of meetings of the full membership and the representative group of 37 countries. At the end of those meetings, members could assess what to do next.

Whether or not significant progress is made on these topics, he will be able to produce a revised draft, which will reflect some progress already made, and lack of progress in other areas. So either way, the revised text will be a mixture of narrowed differences and no change from the previous draft, he told members.

Speaking to journalists after the meeting, Falconer referred to the revised paper on possible partial designation modalities for sensitive products that was tabled by the six countries at the meeting, saying that it was progress.

He added that these countries had gotten their act together and have to some extent responded to the concerns that were there, as well as sorting out among themselves what it was that they thought they had originally agreed to. "So that is as these things go, [its] a major step forward" he said, noting that there are still a number of members who have concerns over the paper.

"There is a clear understanding that we need to come back to this in a multilateral forum. They have got it out on the table now, and now the rest of them (the other members) have to react and respond to it."

The members working on tropical and preference products and the major importing countries that they were dealing with have said that they were having good discussions, but that they were nowhere near ready and needed more time.

According to Falconer, the key message coming from the members is that they are making progress on sensitive products, and tropical and preference products but they are not there yet.

The Chair said that the best he could suggest is that members come back again on Thursday and Friday of next week, where they will have a multilateral discussion on sensitive products, and hopefully at the same time to hear back from members discussing the tropical and preference products on where they have got to.

On the process, Falconer was of the view that members consider that it would be premature for him to produce a revised text in the next couple of days.

Noting that members have been saying that they want to get a deal done by the end of the year, Falconer said that working backwards (from that) - revised texts, the horizontal process, modalities texts adopted and then scheduling - "you get a kind of derived deadline, but a non-specific deadline." Whatever that derived deadline its only a matter of weeks away, he said.

Asked as to when was the earliest date that he could produce a revised text, Falconer said that based on what members have told him at the informal meeting, "you couldn't have a paper before the week of the 12th (of May)".

Asked as to whether this will put back the mini-Ministerial that has been envisaged for the week of 19 May, he said that he did not know.

[Meanwhile, after a meeting in Berne of heads of UN system agencies, the United Nations on Tuesday announced the establishment of a task force to combat the world food crisis, describing a dramatic escalation in prices as "an unprecedented challenge of global proportions". The UN Secretary-General Ban Ki-Moon told heads of 26 UN agencies in Berne, Switzerland, that the world faced "the spectre of widespread hunger, malnutrition and social unrest on an unprecedented scale" without an immediate injection of food aid to the poorest. Among short-term measures, the UN chiefs called on food exporting countries to rethink export restrictions that had led to reduced supplies and higher prices. "We are urging countries not to use export bans," said Robert Zoellick, World Bank president. "These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves."

[The UN agencies, in calling for an end to current bans, however, remained silent on two of the major elements that have been identified as causing the current food crisis and skyrocketing prices - diversion of food crops to production of bio-fuel, and with heavy subsidies as in the US and Europe, as also speculation by hedge funds and private equity firms, who are fleeing the dollar and investing in commodities. The UN Special Rapporteur on the right to food, Jean Ziegler, at a press conference in Geneva, has characterised such activities as bordering on criminal.- SUNS] +