Agricultural Negotiations at the WTO

Representative of CPE. (Co-ordination Paysenne Europeenne)

(Does not include the NFU)

A global assessment of the 5 years of the current agreement was to take place before any further agreements. There should be no other agreement until then and no such assessment has taken place.

Many question the international system and its goals.

It is questioned whether agriculture should be ruled by the WTO. The WTO should be contained/restricted to its original aims, but now it is ruling the agricultural policies of countries. Rules for trade in agricultural products should be set elsewhere than WTO and therefore the rules would be discussed differently. One way would be to integrate the WTO into the UN which would work differently in making agreements.

Settlement of disputes:
The present system in the WTO is wrong. Farmers are not part of the disputes but are penalised anyway by decisions taken elsewhere. There is a need for independent commercial courts to decide disputes between countries; and also for the environment and social rights.

Countries should have sovereignty over their food source and production; not be forced to import what they do not want (eg GMOs, hormone - rBST meat etc.) Only 5-15% of agricultural products are traded internationally; it is not right that all are governed by WTO rules.

On multi-functionality, however the sums are divided, the farmers still have to provide the whole. Which ever way you divide up the price of a product (market price/subsidies) the global price is the same - the difference is just 'who pays?' Farmers need income to live. You cannot make one rule for all as there are different needs in different countries.

The market does not want to pay the true price of food, (including the environmental and social cost). They pay through taxes for services given by farmers. EU payments have double standards. The Swiss have tasks for agriculture in the countryside - produce food- has public support, otherwise there would be no agriculture.

Multi-functionality needs to be more clearly defined in WTO - e.g. food so produced is not for export?

Market access:
Forced imports are disturbing, they destroy home markets. They are being fought at the WTO but this is not popular.

Protection level:
This is a problem for developing countries as it is set at the same level as for other countries. They should be allowed to protect their markets.

Problem of moving the 'same' products around the world at cost to the environment.

Multifunctionality - re-iterate - food so produced should not be for export

Agricultural Negotiations at the WTO

Flexibility or Efficiency?

WTO nominally about efficiency.

In the case of agriculture there is a big question over flexibility.

Agreement on Agriculture. (AoA)

What does agriculture have to do with Sustainable Development? Trade and trade rules are influencing agriculture. It is important to understand gains and losses from the SD view.

International Centre for Trade and Sustainable Development - non-partisan NGO; 1996- call to make trade policy more supportive of Sustainable Development. 'Bridges' publication.

The Uruguay Round and AoA.

Introduced border measures + fair/market orientated focus on traditional and regulatory barriers.

Brought agriculture into GATT.

'Fair' has lost out - 'Market forces' are to the fore.

This is beginning to change.

Controversial Issues.

Special and Differential Treatment for developing countries. (SDTs)

Non-Trade Concerns to be taken into account - food security, animal welfare, rural development. (NTCs)

What is 'fair/market' orientated?

(Applies to agriculture only)

Current Negotiations.

Reform process is mandated by the AoA. Article 20.

Phase 1 to March 2001. Proposals identify areas. The work plan includes 60%+ of world trade in the proposals.

Phase 2 to mid 2002

Phase 3 is of unknown duration, but will be specific. Important for sustainable development.

Brief review of WTO principles.

Trade logic - the focus is on what countries CANNOT do.

Basic principle 'non-discrimination'.

Most Favoured Nations and National treatment. (MFN )

Exceptions: - derogations for health, or environmental security (GATT Article 20)
Special and Differential Treatment (SDT)

Trade Groups.

Cairns Group.   Major exporter -over 30% (and exports double % imported). Looking for new liberalisation, reduced subsidies etc. greater market access.

US.   Major exporter -17% (and exports 25% more than imports.) similar view to Cairns.

EU.   Broader approach wanted. Imports/exports balanced at 17%. Wants clearer labelling.

Association S.E. Asian Nations. (overlaps with Cairns Group)   Looking for more flexibility on agricultural agreements.

Like Minded Group.   Looking for more flexibility.

Small Island Developing States + some African States.   Want reduction of tariffs. Agricultural reform could be detrimental to them.

India.   Wants flexibility.

Negotiating Context.

Should Agricultural negotiations be part of the next WTO round or not?

Trade offs?   possible for some but not all. For the EC it implies agricultural concessions for good of other objectives, but what and how?

Broad or narrow scope?

Timing -  being driven by expiration of 'Peace Clause' in 2003 - but if pushed too far might let it go past.

Sequence -  major differences, principles.

Issues

Cairns Group want 50% less subsidies

EC (UK formula) - want subsidies to be flexible but uneven

US - want subsidies across the board, still with formula for Domestic Support (DS)

Canada - favours sectorial support

Is flexibility leading to or preventing agreement?

Diverse NTC's

Protect marginal producers.

Mechanisms proposed

Green box - broad agreement, but mixed views about criteria.

Development box - SDT - proposed by Like Minded Group.

Food Security box - suggested by India

New safeguard mechanism

Blue box - is used by few, many want to eliminate it.

Green box - Targeted support, transparent, and minimally trade distorting. De Minimis may leave room for adjustment.
Proposals:-
US - working group; EU - review; Cairns - review; Canada - cap and review distortions; Norway - propose 2 tier (domestic + export) levels of support,- but how to distinguish between them?

Development box - (SDT) as food security. Will it be allowed? It may be against WTO agreement. There is no mechanism for distinction.

Opportunity for convergence - Green box deal? 'Enabling' update? SPS ( sanitary and health) measures? GMOs? Labelling?

NB China is not yet in the WTO - could flood the world with cheap products, GMOs etc.

Agricultural Negotiations at the WTO

Representative for South Centre; IGO for Developing Countries.

Not all developing countries are at the same level or have the same needs.

Present agreement and its problems.

AoA objectives:
Fair market;   special treatment for developing countries;

For non-trade concerns as for common members.

The objectives have not been achieved:- The developed countries distort the markets. One set of rules is used by the developed countries but a different set of rules for the rest who are not giving subsidies and cannot. (Likened to a game of football in a block of flats, where the rich live at the top and own the footballs. They play football and break the windows on the ground floor where the poor live. In trying to include the poor they lend or give them footballs. However it is still their windows which get broken as the other differences remain.) There is a need to find rules that can be made to work.

The situation is complex as some countries belong to more than one grouping and the groups have differing proposals.

Group proposals.

The Cairns group want further liberalisation of trade. The push for this comes mainly from Latin America.

The US is looking for a form of protectionism. A very strong member

The 'Middle' group is not a formal grouping but has members who share concerns about:- agriculture, the removal of trade distortion, access to markets, special development. They are in line with the 'Like-minded' group.

'Small single-commodity-dependent' group (Trinidad, Mauritius, Tobago etc) are trading in special considerations (e.g. bananas). How can their problems be addressed? They are also net food importing countries!

Proposals on market access; domestic support; market structure; special and developmental treatment; non-trade concerns.

The groups all want market access and reduction of tariffs. Reduction of tariffs may not help, although where they create problems they do need addressing. A % drop would be no help but a ceiling on tariffs may be.

Reduction of domestic subsidies; a removal of all 'boxes'. Actual subsidy levels have not dropped - cap permitted subsidy levels.

Emphasis shifts from domestic to export subsidy (e.g. Mauritius for sugar on which all depends) - reduce export subsidies; but what about tariffs too?

There is a need for an effective, and binding, system. This has led to the suggestion of a 'Development Box', with rules not available for exploitation by countries which did not need them.

How can concerns over problems caused by Trans National Corporations be met?

Agricultural Negotiations at the WTO

Clarification of issues

• Is it possible to subsidize non-export food? What about imports?
  
• Modulation? - subsidize farmer, tailing off for larger acreage.
  
• Liberalise from market excess committments?
  
• Can Organic farming be kept out of WTO? Local farming for local area, not part of world markets. Affected by trade rules for labelling.
  

GATS Article 3 - Product and Production

• Like product treated as like, no concept of social standards etc. There is a need to change the Article.
  
• Labelling - production method (eg 'Organic'); cultural identity; geographical origin (local, not international). No clear rules. Issue not being taken up by the EU (eg. Basmati Rice). Has to be a traditional recipe/production method, clearly defined. Regional product is not acceptable but quality definition is. What happens for example to cheese, such as Cheddar which has lost its regional identity? How to re-regionalise?
  

The balance between transport of food and climate change; what is the WTO attitude?

• This is seen as an economic problem/solution - trade will enable finance to solve the problem. [Eg. Energy needed to rear cattle in Argentina is minimal, but is high in Europe; cancels out the cost of transporting it.] This problem will have to be solved in the Climate Change Convention.

Is there any recognition of seasonality? - Linked to energy.

Could there be an Eco-tax on unseasonal food? -making it a WTO issue.

Who fixes the agenda? What about the power of the TNCs? Need for transparency.

• A new framework is needed , what should it be?
  
• Dreams can become a reality - through the work of people.
  
• WTO is a committee to police policy, therefore we need to tackle member governments.
  
• Governments are getting weaker in face of TNCs.

Organic farming is providing a service, therefore it can be subsidised; - or is it being discriminated against?

The consumer needs educating on the true cost of food, including environmental clean up etc.

There is a need for closer links between producer and consumer.

• WTO structure; who elects who, and for how long?

• Multi-lateral Environmental Agreements - none negotiated in 45 years!! If agreed MEAs could impose trade sanctions on environmental polluters and the WTO could uphold them.

• Is it possible to withdraw agriculture from the WTO/make it indepedent of the WTO?