The first half of 2003 was a crucial period for the ongoing agricultural trade negotiations in the WTO. End-March was set as the deadline for finalizing modalities for commitments, which would determine the final shape and details of the new agricultural agreement. The Chairman of the WTO General Council, Mr Stuart Harbinson, released draft negotiating modalities in February 2003 and a revised version in March 2003. No agreement was reached on the modalities by end-March and the next deadline for agreement was September 2003 when Ministers met in Cancún. However, for various reasons, this also did not materialize. Some negotiators complained that the agricultural trade liberalization was too ambitious while others said that it was not ambitious enough. Hence it seems that the modalities for further commitment as drafted and revised by Chairman Harbinson is still the basis for further negotiations.
In view of this, there is a heightened interest among all those involved in the negotiations, directly or indirectly, in likely impacts of the modalities, i.e., on questions such as who will lose and by how much, and who will gain and by how much. Of particular concern is the impact of the negotiated outcomes on developing countries, specially the least developed among them, as this round of negotiations is also called a "development" round. The participation of developing countries in the current round of agricultural trade negotiations should be grounded in analytical and empirical understanding of the effects of the current proposals.
This paper has two main objectives. First, it provides quantitative assessments of the likely impacts of the negotiating modalities, in particular the Harbinson draft of March 2003, but also of the European Union (EU) and United States (US) proposals as alternative scenarios. The EU and the US proposals are seen as representing modest and deeper reforms, respectively, relative to the draft proposal of Harbinson. The second objective is to evaluate how the modalities impact on economies, in particular the developing and least-developed countries. Such assessment should indicate, albeit indirectly, whether, or to what extent, the concerns of these countries have been addressed in the modalities. It is hoped that these assessments will provide a sound basis for all parties concerned to ascertain priorities for negotiating efforts.
The paper is also a contribution to the new literature on the assessment of the impact of the proposals and modalities for negotiations in the context of the Doha Round of the WTO, focusing on the three main pillars of the Agreement on Agriculture (AoA), namely domestic support, export competition and market access. Recent model-based assessments of the WTO reform process are Freeman et al. (2000), Diao et al., (2001), FAO (2002), FAPRI (2002), OECD (2002), Vanzetti and Sharma (2002) and Vanzetti and Peters (2003).
The paper consists of six sections. Following this introduction, Section 2 presents an overview of the trade concerns of developing and least developed countries in the post-UR AoA period. Section 3 introduces the ATPSM model, including sources of the data and parameters, and the coverage of countries and commodities. Next, Section 4 summarizes negotiating modalities and presents the three scenarios simulated. Section 5 presents simulation results while section 6 concludes with some remarks.
