WTO AGRICULTURAL NEGOTIATIONS

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WTO AGRICULTURAL NEGOTIATIONS

• Portfolio Committee  Agriculture and Land Affairs
  
• April 2003

Günter Müller Directorate International
Trade National Department of Agriculture
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WTO Agricultural Negotiations

• Part of the broader WTO Round launched in Doha,
  Qatar in November 2001 by the 4th WTO Ministerial
  Meeting
• WTO Round Doha Development Agenda
• Agriculture is a critical part of broader
  negotiations
• 4th WTO Ministerial agreed on a detailed mandate
  for the agricultural negotiations
• Agreed on a schedule for the negotiations

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Doha Decisions on Agriculture (Mandate)

• Building on the work carried out to date
• Substantial improvement in market access
• Reductions of, with a view to phasing out, all
  forms of export subsidies
• Substantial reductions in trade distorting
  domestic support
• Special and differential treatment for
  developing countries
• Non-trade concerns will be taken into account

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WTO AGRICULTURAL NEGOTIATIONS

• Agricultural negotiations chaired by Ambassador
  Stuart Harbinson (Hong Kong)
• Meetings in Geneva in informal and formal
  negotiation sessions with broad, active
  participation, also by developing countries
• First Modalities Draft Paper by Chair 12
  February 2003
• According to schedule Agreement should have been
  reached on modalities by 31 March 2003.
• Modalities framework/structure for commitments
  by individual WTO members, e.g. formula for
  tariff reductions, size of reduction in
  domestic support, time frame for eliminations
  of export subsidies

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WTO AGRICULTURAL NEGOTIATIONS

• Major Negotiation Issues
• Market Access Level of tariff reductions,
  special treatment for certain products, Safe
  Guard Clause, Tariff Preferences
• Domestic Support Level of reduction in support,
  Non-trade concerns, definition of boxes amber,
  blue and green
• Export Competition Elimination or not of export
  subsidies, time frame, handling of export
  credits, state trading enterprises
• Positions of WTO members on these and other
  negotiation issues far from reaching a compromise

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WTO AGRICULTURAL NEGOTIATIONS

• Harbinson Draft (released February 2003)
• Based on work carried out with the objective to
  build bridges and attempt to identify possible
  paths to solutions
• Text was discussed during special negotiation
  sessions in Geneva in February and March with
  very little sign of progress towards an agreement
• WTO Membership is split mainly on the level of
  ambition
• Agriculture one of various deadlines in the broad
  WTO Round that has been missed

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WTO AGRICULTURAL NEGOTIATIONS

• RSA Objectives (summarized)
• Domestic support provide for the development of
  historicaly disadvantages farmers, rural and
  farming communities, and, facilitate a
  substantial reduction in current high levels of
  support to bring about real structural change in
  developed countries.
• Market Access Substantial improvement in market
  access in targeted markets for South African
  agricultural products with export potential
• Export Competition Elimination of all export
  subsidies (included subsidies under export
  credits) over the shortest period of time
  possible
• Link between further market access commitments by
  RSA and substantial reduction in domestic support
  by developed countries

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WTO AGRICULTURAL NEGOTIATIONS

• RSA Approach
• Approach negotiations from a development
  perspective
• Close consultation and co-operation with SACU and
  SADC
• Active participation in Africa Group
• Active participation in Cairns Group

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WTO AGRICULTURAL NEGOTIATIONS

• Harbinson draft modalities

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HARBINSON TEXT TARIFFS

• Developed Countries (reduce over 5 years)

Original tariff Average reduction Minimum per line
90 60 45
15 - 90 50 35
15 - 40 25
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TARIFFS

• Developing Countries (reduce over 10 years)

Original tariff Average reduction Minimum per line
120 40 30
20 - 120 33 23
20 - 27 17
SP (? of agri products) Food livelihood security, rural development 10 5
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HARBINSON TEXT
Harbinson UR Formula
Developed Countries ? 500 Tariff peaks? Not addressed Tariff escalation? Reduction to be higher on processed product Flexibility ? 275
Developing countries ? 500 Tariff peaks? Tariff escalation? SP products to be reduced by an average of 10 with minimum of 5 per line ? 475
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SACU IMPORTS 2001Duties Major Products
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RSA IMPORTS 2001
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AVERAGE TARIFFS ON RSA EXPORTS EXAMPLES ()
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RSA EXPORTS 2001
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Market Access (other)

• Preferential Schemes
• tariffs of products of vital interest to
  developing countries may be reduced over 8
  instead of 5 years
• Erosion of preferences major topic for
  negotiations
• Tariff Quota volume
• Developed Countries
• Increase to 10 of consumption over 5 years
  (additional flexibility)
• Developing Countries
• Increase to 6.6 over 10years (additional
  flexibility)
• In quota tariff No proposal

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Market Access

• Safeguard Clause Article 5
• Will be phased-out for developed countries after
  5 years
• New provision for SP products developing
  countries based on Article 5 of AoA, detail to be
  agreed
• Debate Countervailing measure for developing
  countries to act against subsidized imports
• Non-Trade Concerns
• GIs, Animal welfare, food safety

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Export Competition

• Export Subsidies
• 50 to zero in 5 years
• 50 to zero in 9 years
• Improved rules
• Export Credits
• Food Aid
• State Trading Export Enterprises
• Export Restrictions and Taxes

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Export CompetitionCommitment and expenditure in
US m
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Domestic Support

• Green Box
• No major changes
• Blue Box
• Capped at 1999 2001 level and reduced by 50
  over 5 years
• Alternative included in amber box
• Amber Box
• To be reduced by 60 over 5 years
• De Minimis
• Developed countries reduce from current 5 to
  2.5 over 5 years
• Developing countries maintain 10 level
• Article 6.2 (input subsidies, developing
  countries)
• To be maintained and enhanced

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WTO AGRICULTURAL NEGOTIATIONS

• Negotiation time frame and deadlines
• Agreement on Modalities 31 March 2001
• Tabling of draft country schedules by the 5th
  Ministerial Meeting in Mexico (September 2003)
• Conclusion of Round by 1 January 2005

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WTO AGRICULTURAL NEGOTIATIONS

• Contentious Issues
• Level of ambition
• Special flexibility to developing countries
• Scope of negotiations