Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific

He Changchui
Assistant Director-General and
Regional Representative for Asia and the Pacific
Delivered at the
Bangkok, Thailand
14-16 June 2006

Mr Alexander Sarris, Director, Commodities and Trade Division, FAO headquarters
Distinguished participants
Ladies and gentlemen

A pleasant good morning to all of you.

First of all, it gives me great pleasure to welcome you all, on behalf of Jaques Diouf, Director-General of FAO, and on my own behalf, to this Regional Workshop on Agricultural Trade and Development in the Context of Multilateral and Regional Trade Agreements. We are greatly honored and privileged to have you all here at the regional office for Asia and the Pacific.

International agricultural trade today is substantially more important throughout the Asia-Pacific region than ever before. The region has witnessed rapid growth in agricultural trade volumes during the past decade. Much of this increased agricultural trade has been within the region, while expansion of agricultural trade beyond the region continues to encounter difficulties. Furthermore, not all countries have been able to benefit from trade liberalization due to many domestic constraints and problems of access to external markets. In this context, the organization of this regional workshop could not have been more timely.

The state of the ongoing WTO agricultural negotiations

Multilateral trade negotiations continue to attract a great deal of attention and as we meet, negotiations on agricultural trade are reaching a critical stage. The current process of re-negotiating the WTO Agreement on Agriculture started with the launch of a new round of trade negotiations at the WTO Doha Ministerial Conference in November 2001. The Conference set a number of deadlines for various stages of the negotiations. However, subsequent developments in the negotiations have been limited and a number of deadlines have been missed. These include the setback at the 5th WTO Ministerial Conference in Cancun, Mexico, in September 2003, and more recently the failure to meet the April 2006 deadline for the agreement of modalities which was set at the 6th WTO Ministerial in Hong Kong last December.

Although the conclusion of a Framework Agreement at the end of July 2004 and the Hong Kong Ministerial Declaration of December 2005 have maintained the impetus of the negotiations, the impending expiration of the fast-track powers of the U.S. President to approve trade deals has added heightened urgency to concluding the negotiations within the coming months.

During May and the early part of June this year, negotiators in Geneva have been engaged in intense negotiations based on a series of 'reference papers' produced by the Chair of the Agriculture Negotiations, on specific aspects of the negotiations, which spelt out areas of agreement as well as areas where further convergence was still needed before modalities could be agreed. A new draft text is expected early next week (on or around June 19) which will form the basis of negotiations at a Ministerial meeting in the last week of June aimed at reaching an accord on the agricultural component of the WTO agreement.

Although there has been some narrowing of the gaps in the past few months – progress has remained slow and on some key aspects – the gaps remain wide. In part, the slow progress is a result of different conceptions as to what a successful outcome actually means. For some negotiators, success will be measured in terms of the extent to which markets are opened for their agricultural exports. For others, a successful outcome will be one that is supportive of development, in particular agricultural development, since in most developing countries agriculture plays a critical role.

Agricultural trade, development and food security

It is the divergence in views related to such outcomes which provides the basis for this workshop. The key question we face is how trade agreements, with their resulting constraints on the flexibility available for the design and implementation of agricultural and trade policy, can be negotiated to provide the maximum developmental benefits.

In addressing this question, the issue as to whether further agricultural trade liberalization can help to achieve significant reductions in poverty and contribute to hunger alleviation has proved difficult and has resulted in often divisive debate in the context of trade negotiations.

An important explanation for these difficulties is that different countries are at vastly different levels of development, and therefore, both the importance of the agriculture sector to the continued development of these countries, and the effect of trade reforms on their agriculture sectors, can differ widely. For some countries, often with more developed agriculture sectors, expanding agricultural exports will be the most appropriate way to enhance their sectors’ contribution. For others, with less developed agriculture sectors, some level of protection may be required while interventions are made to allow for the transformation of their agriculture sectors and the required increases in supply side capacity. In sum, different trade policy strategies will be appropriate for different countries and these will need to be provided for in any negotiated agreement.

It is in this context that it is important that the conclusion of the Doha Round is positive development for food security and poverty reduction in developing countries – that it commits to substantially reducing distortions in world agricultural markets, but at the same time allows countries to pursue agricultural policies that are supportive of their development goals, poverty reduction strategies, food security and livelihood concerns.

Regional trade

Whilst perhaps not receiving the same level of press coverage, as we are all well aware, regional trade agreements are also critical in determining the configuration of trade policies in member countries. A challenge for us all is to understand how the increasing complexity of multilateral, regional and bilateral trade agreements affects the flexibility that member countries are able to retain to support the agriculture sector in the context of potentially significant changes in global agricultural production and trade. For this reason, the third day of this workshop is devoted to regional trade agreements.

FAO’s role in assisting Members in trade negotiations

In what we all hope will be the final stages of the negotiations towards a set of agricultural modalities, it is important that in seeking to achieve an agreement, the development component of the negotiations is not overlooked. This also holds for continuing negotiations at the regional and bilateral level.

FAO and other development organizations have a vital role to play in ensuring that development issues, and the potential developmental impact of trade agreements, are fully understood. FAO does not negotiate but can provide valuable information and analysis to facilitate trade negotiations. Moreover, we have a mandate from the World Food Summit to provide technical assistance to developing countries so that they are equal partners in the negotiations.

I am sure that many of you are aware of our activities in this area. During 1999-2001, FAO implemented an “Umbrella” Programme on trade-related capacity building, with a focus on strengthening the participation of developing and transition countries in multilateral trade negotiations. Fourteen subregional workshops were organized under the programme and reached a total of 850 officials from 151 countries. In addition, substantive reference materials were developed and disseminated.

These were followed up by two regional workshops held here in Bangkok in November 2002 and in January 2005, reflecting different aspects of the negotiations. Each of these regional workshops brought together 40 participants from 18 countries of the region – mostly trade negotiators and members of the technical teams supporting the negotiations.

FAO continues to receive requests from countries of the region for capacity building activities, as new developments take place in the WTO agricultural negotiations.

The rationale for the current workshop is to focus not just on the current negotiations of modalities in the WTO, but on the trade and development issues that have increasingly come to the fore in both multilateral and regional trade negotiations. This workshop is one of five similar regional workshops that FAO will be implementing in the coming months.

Expectations from this Workshop

Distinguished delegates
Ladies and gentlemen

Finally, what should you expect from this workshop? In my view, the goals are very clear, given the current status of the negotiations, with an impending meeting of Ministers which will attempt to reach a final agreement on the agriculture modalities, it is imperative that countries appreciate how the complex technical details and numerical parameters that will be debated in formulating an agreement to the modalities could potentially affect their agriculture sectors. Countries need to ensure that development benefits of the agreed modalities are maximised.

In closing, I would like to remind you that trade reforms have the potential to contribute to the process of alleviating hunger and poverty – but any change in rules that comes from multilateral negotiations has to be supportive of that process. This I hope you will keep in mind as you deliberate on the issues under discussion in the workshop.

I wish you all success in this task and a pleasant stay in Bangkok.

I thank you for your kind attention.