C 2003/19 |
|
C 2003/19 |
Thirty-second Session |
Rome, 29 November – 10 December 2003 |
Ministerial Round Table on
Developments in the WTO Negotiations on Agriculture
and Implications for Food Security - including the Work of FAO |
Background Note |
Developments in the negotiations since November 2001
1. This note provides a brief summary of developments in the WTO negotiations on agriculture since the WTO Doha Ministerial Declaration of November 2001 and highlights those issues on which WTO Members will need to take a decision in accordance with the Doha Ministerial Declaration. It concludes with issues for consideration of the Round Table and their implications for the work of FAO.
2. The objectives and the mandate for the WTO negotiations on agriculture are set out in paragraph 13 of the Doha Ministerial Declaration. In that paragraph, WTO members reconfirmed that the long-term objective as indicated in the Agreement on Agriculture is:
“to establish a fair and market-oriented trading system through a programme of fundamental reforms and encompassing strengthened rules and specific commitments on support and protection in order to correct and prevent restrictions and distortions in world agricultural markets”.
3. In this context, WTO members committed themselves in the Doha declarations to comprehensive negotiations aimed at:
“substantial improvements in market access; reductions of, with a view of phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support.”
4. They agreed that special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the Schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development. They confirmed that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture (AoA). 1
5. The Doha Ministerial Declaration provided that modalities for further commitments, including provisions for special and differential treatment, were to be established no later than 31 March 2003. In addition, participants were to submit their comprehensive draft Schedules based on these modalities no later than the date of the Fifth Session of the Ministerial Conference. That session of the Ministerial Conference was held in Cancun, Mexico, from 10 to 14 September 2003.
6. The deadline of 31 March 2003 for establishing the “modalities” was missed as WTO members were unable to agree on a text by that date. The modalities were to provide the framework, including targets and formulas, for achieving the objectives of the negotiations. According to a draft text2 submitted by the Chairman of the negotiations, the modalities would set the parameters for the final outcome of the negotiations on agriculture, including the extent to which import duties would be cut and subsidies reduced or eliminated, and over what implementation period. Failure to agree on the modalities reflected important differences among Members in several key areas relating largely to the level of ambition for reducing tariffs and subsidies.
7. Efforts to establish the modalities for the agriculture negotiations continued during the intervening and pre-Cancun preparatory period leading up to the Fifth Ministerial Conference in Cancun. However, agreement remained elusive. A “revised” draft Ministerial Declaration text was forwarded to Ministers for consideration at Cancun by the Chairman of the General Council and the WTO Director General with a covering letter dated 31 August 2003 indicating that the text was not an agreed document and was being presented on the responsibility of the Chairman of the General Council in close co-operation with the Director-General. The letter stressed that the Draft Declaration had not been agreed upon "in any part", and did not include many of the member governments' proposals, but that "it remains our best judgement of what could constitute a workable framework for action by Ministers at Cancún". On agriculture, the covering letter stated the following:
“Agriculture has remained one of the most sensitive areas of the negotiations under the Doha Development Agenda. Despite significant progress made since Doha, efforts to establish modalities for the further commitments have not yet borne fruit. Recent initiatives by a wide range of Members, including various groupings, have re-energized the negotiations by proposing a so-called “framework” approach and submitting specific inputs to this effect. We can report that there is now a widely shared view that the objective in agriculture at Cancún should be to add impetus to the negotiations through, first, agreeing on such a framework which should, of course, be faithful to the Doha mandate and, secondly, directing the subsequent work towards establishment of full modalities.
Based on the inputs by participants and the consultations held, we have distilled the draft framework at Annex A to the Draft Ministerial Text as our best effort to provide Ministers with a workable basis for consideration at Cancún. This draft framework leaves room for a range of possible outcomes in terms of eventual modalities. And, although the draft framework takes a certain direction in some areas, it leaves it open in others. The levels of ambition in domestic support, market access and export competition as well as the final balance will depend, to a significant extent, on the figures to be negotiated once the framework is agreed.
At the recent Heads of Delegations and General Council meetings, many participants, while criticizing Annex A and reiterating their attachment to their own inputs, considered it a starting point for the work at Cancún. A significant number of others felt that Annex A was insufficiently balanced for that purpose and made the point that their own inputs remain on the table for deliberation in Cancún. No doubt, considerable work on Annex A will be required so as to arrive at an agreed framework.”3
8. As regards the text itself, in agriculture, the Draft Ministerial Declaration4 called upon the Special Session of the WTO Committee on Agriculture to conclude its work on establishing modalities by a date to be agreed by the Ministers in Cancún and that Members would submit their comprehensive draft Schedules of commitments, based on these modalities, no later than a date also to be agreed in Cancún. It also reaffirmed the Doha Mandate as regards the "single undertaking" commitment, i.e. the conclusion of the negotiations in agriculture as part of, and at the date of, the conclusion of the negotiating agenda as a whole.
9. The proposed framework for establishing modalities in agriculture (Annex A of the draft Ministerial Declaration) was based on the latest submissions made by Members, especially the joint EC-US paper circulated on 13 August 2003 and submissions by other Members, in particular a joint proposal by a group of 20 developing countries (subsequently called the G20+ , see below). While Annex A took on board most of the framework contained in the EC-US paper, some important additions/qualifications, suggested by the other Members, were added, especially as regards special and differential treatment for developing countries.
10. As noted in the excerpt above from the covering letter, Annex A provided only a framework for the negotiations, as all relevant parameters, for example the ones concerning reduction commitments, remained to be negotiated after Cancún. However, the significance of the text laid in its attempt to bridge the gap between wide differences among WTO members on their approaches to the negotiations. For example, on market access, the proposed "blended" formula for tariff reductions combined elements of a harmonizing ("Swiss") formula with that of a Uruguay Round-type approach, which provided some flexibility on a tariff line basis; on domestic support, the proposed formula for negotiating reduction commitments was a movement towards harmonization of domestic support across countries; and, on export competition, the text provided for parallel treatment of export subsidies and export credits.
11. While the Chairman's text had attempted to resolve basic differences among WTO members regarding the approach to reform in the three "pillars" of the Agreement on Agriculture, it indicated that it could not propose solutions for a number of important issues on which there remained wide disagreement among WTO members. These included: the so-called "peace clause"(article 13 of the AoA), product-specific commitments in domestic support, certain non-trade concerns, sectoral initiatives, inter-pillar5 linkages, geographical indications and other detailed rules. Overall, the text represented progress in the process towards establishing modalities for agriculture negotiations; however, the basic positions of Members remained unchanged in a number of important areas, thus setting the stage for intense negotiations during the Ministerial at Cancún.
12. After five days of intense negotiations at Cancún6, WTO Members agreed that more negotiations were required to reach consensus on most of the key issues outlined in the Doha Declaration. On the fourth day of the WTO Fifth Ministerial Conference, a revised Draft Ministerial Text was issued by the Chairman of the Conference. According to the WTO secretariat, no group was in agreement with the revised text.
13. In particular, Ministers were unable to agree on a “framework” on establishing modalities for negotiations in agriculture, and on whether to launch negotiations in a number of new areas (the so-called “Singapore” issues) concerning trade and investment, trade and competition policy, transparency in government procurement and trade facilitation. While there was some progress on various points in a number of areas, including on agriculture, the Ministerial Conference closed without a concrete outcome.
14. As regards agriculture, the main contention involved disagreement on the level of ambition for achieving the objectives for the negotiations on agriculture in accordance with the Doha Declaration. Some Members, particularly a group of developing countries (the so-called G-20+7) called for substantial reforms in agricultural policies, including the elimination of export subsidies, sharp reductions in trade-distorting support and the capping of all domestic support, including those allowed under the “green box”. Others, in particular some developed countries, felt that they could not go along with this proposal at this stage.
15. The difficulties on agriculture were further compounded by disagreement over a number of concrete proposals that initially seemed to be supported by various parties. For example, some West and Central African countries made a proposal to reduce subsidies on cotton in view of the fact that these subsidies distorted international cotton prices and negatively affected the livelihoods of poor African farmers.
16. The revised Draft Ministerial Text recommended a review of the impact of distortions in all fibre markets and support of programmes for diversification of economies dependent upon cotton. This Draft Text may have caused disillusionment on the part of some Members regarding the orientation of the negotiations on the needs of developing countries as set out in the Doha agenda.
17. The formal outcome of the Fifth WTO Ministerial in Cancún consists of a Ministerial Statement8, adopted at the closing of the Conference on 14 September 2003. Members noted that despite their hard work in Cancún and the "considerable progress" that was made, more work was needed in some key areas to enable the conclusion of the negotiations in fulfilment of the commitments made at Doha. The statement mandates that this work should be undertaken “taking fully into account all the views that we have expressed in this Conference”. It further mandates the Chairman of the General Council, working in close co-operation with the Director-General, to coordinate this work and to convene a meeting of the General Council at Senior Officials level no later than 15 December 2003 to “take the action necessary at that stage to enable us to move towards a successful and timely conclusion of the negotiations”.
18. The call by the Ministers “to continue working on the outstanding issues with a renewed sense of urgency and purpose” provides some hope that the obstacles that prevented reaching an agreement in Cancún, while important, may not be insurmountable.
19. The Round Table may wish to reflect on the developments in the WTO negotiations on agriculture and their implications for the work of FAO. In particular, the following issues are suggested:
Trade, Food Security and Rural Development
The Cancun Ministerial Conference
What role should FAO play?
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1 See: WTO, Doha Declarations, 2003.
2 See: http://www.wto.org/english/tratop_e/agric_e/negoti_mod2stdraft_e.htm
3 See: covering letter http://www.wto.org/english/thewto_e/minist_e/min03_e/draft_decl_covletter_e.htm
4 See: Draft Ministerial Declaration http://www.wto.org/english/thewto_e/minist_e/min03_e/draft_decl_e.htm
5 Inter-pillar or inter-sectoral linkages refer to linking commitments in one area to commitments in the other areas. For example, some countries say they cannot agree to open their markets further, if other countries do not cut back or eliminate their export subsidies, or reduce their domestic support.
6 For an account by the WTO, see: WTO 5th Ministerial Conference http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_e.htm
7 G20+ consists of Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Egypt, Ecuador, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Venezuela.
8 See: Ministerial Statement http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_20_e.doc