Doha

Document Sample
Doha Powered By Docstoc
					The EU's position in the Doha
Round agricultural negotiations
                      Alan Matthews
    Jean Monnet Professor of European Agricultural
                         University
             Trinity College Dublin, Ireland
  Presentation at the Slovak University of Agriculture in
                    Nitra, 15 May 2006
           Lecture outline
• The legacy of the Uruguay Round
  Agreement on Agriculture
• Background to the Doha Round
  negotiations on agriculture
• Negotiating positions in the Doha Round
• Doha Round – success or failure?
   Section 1. The legacy of the
  Uruguay Round Agreement on
           Agriculture

Three pillars:
 Market access
 Domestic support
 Export subsidies
              Market access
•   Tariffication
•   Tariff reduction
•   Market access provisions
•   Special treatment and special safeguard
    provisions
                  Tariffication
• Tariffication required countries to convert their existing
  non-tariff barriers (NTBs) into tariff equivalents. These
  tariff equivalents are established for the base period
  (1986-1988) and are entered in the Country Schedules as
  the base rate of tariff.
              Tariff reduction
• For developed countries, an unweighted average of
  36 percent, subject to a minimum reduction of 15
  percent in each tariff line over a six year
  implementation period.
• For developing countries the commitments are 24
  percent and 10 percent respectively, and the
  implementation period extends to ten years.
• For least-developed countries there are no reduction
  commitments.
• Special Safeguards provisions, that enable a country
  which has used tariffication to apply additional tariffs
  to certain specified commodities, where import prices
  are particularly low, or where there is a sudden surge
  in imports.
    Market access commitments
•   Countries are required to
    maintain current levels of
    access, for each individual
    product, where the current level
    is based upon the volume of
    imports during the base period
    (1986-88).
•   For commodities subject to
    tariffication, a minimum access
    should be established at not
    less than 3 percent of domestic
    consumption during the base
    period. This minimum level is to
    rise to 5 percent by the year
    2000 in the case of developed
    countries, and by 2004 in the
    case of developing countries.
      Market access – how much
            liberalisation?
• Effectiveness of the agriculture agreement in cutting protection
  was less impressive than the nominal cuts suggest, because :
   – tariff cuts took place from base levels that were frequently inflated
     through the choice of base year,
   – through the methods used to measure protection existing prior to the
     round („dirty tariffication‟),
   – Through use of unweighted average of 36%
   – through the use of „ceiling‟ bindings in developing countries
• Uneven tariff reduction – many sensitive products can protected
  by high tariffs
Domestic support commitments
• Divided domestic support policies into three
  types:
  – Policies deemed to have a substantial impact on the
    patterns and flow of trade are classified in what is
    called the 'amber box‘ and are subject to reduction
    commitments;
  – policies that are not deemed to have a major effect on
    production and trade are placed in the 'green box';
  – policies that fall into neither of these categories, but
    are, perhaps, somewhere in between, are known as
    'blue box' policies.
Disciplining amber box policies
• All domestic support deemed to have a distortionary
  effect on trade is summed and included in a measure
  called the Aggregate Measure of Support (AMS);
• Progressive reduction in AMS levels by 20% over 6
  years.
• AMS includes
   – Market price support where support provided by
     administrative support prices e.g. intervention (but not if
     provided by tariff protection alone)
   – Calculated on the basis of world reference prices in 1986-88
   – Coupled direct payments
• De minimis exemptions – 5% for product specific and
  5% for non-product specific support
                     The green box
• Must meet the broad criterion of being minimally
  trade-distorting and, in addition, fit into one of the
  categories set out in the URAA
   – Decoupled direct payment schemes
   – producer retirement programmes;
   – resource (e.g. land) retirement programmes;
   – environmental protection programmes;
   – regional assistance programmes;
   – certain types of investment aid;
   – general services that provide for example:
       • research, training and extension;
       • marketing information;
       • certain types of rural infrastructure.
             The blue box
• Direct payments under production-limiting
  programmes are exempted from AMS
  reduction if:
• such payments are based on fixed area
  and yields; or
• such payments are made on 85 percent or
  less of the base level of production; or
• livestock payments are made on a fixed
  number of head.
Reductions in Domestic Support to Agricultural
       Producers (Millions of US dollars)




                                        <>
 Export subsidy commitments
• No new export subsidies can be introduced
• Developed countries committed to reducing the
  volume of subsidised exports by 21 percent and the
  expenditure on subsidies by 36 percent, both over a
  six-year implementation period (1995-2000).
• For export subsidies the base period is generally
  taken to be the period 1986-1990.
Export subsidy reduction commitments
      by country (Millions of US$)




                           <>
   Adjusting CAP to the URAA
What changes were necessary to the
  CAP mechanisms?
• the implementation of tariffication
• other market access provisions
• no real effect of AMS provision
• more active management of export refund
  system to stay within subsidised export
  targets
              Section 2.


• Background to the Doha negotiations
                     Chronology
• Third WTO Ministerial Meeting in Seattle in November
  1999 failed to launch comprehensive negotiations
• Article 20 negotiations:
    – Analysis and Exchange
    – the EU’s Comprehensive Negotiating Proposal, December 2000
•   Doha Mandate, November 2001
•   EU’s Specific Drafting Input, January 2003
•   Harbinson Modalities, Feb/March 2003
•   Adoption of the Fischler Reforms, June 2003
•   EU/US Joint Initiative, August 2003
•   Cancún Ministerial, September 2003 Derbez draft
                Chronology
• EU’s offer to eliminate export subsidies, May
  2004
• Framework Agreement, July 2004
• Paris May 2005 agreement on AVEs
• Dalien July 2005 G20 proposal on market
  access
• Zurich Oct 2005 proposals on market access
• Hong Kong Ministerial, December 2005
• April 2006 deadline for modalities also missed
Negotiation issues in agriculture
 • Market access
 • Export subsidies
 • Domestic support
 • Special and differential treatment (S&DT) for
   developing countries
 • Non-trade concerns
 • Peace clause
       Tariff reduction issues
• High bound tariffs remained in agriculture
  after URAA – 62% on average
• Tariff-cutting approaches
  – Request and offer vs formula approach
  – Linear vs harmonising formulae
  – Cocktail formulae
• Principles suggested by G-20
  – Progressivity, flexibility, neutrality and
    proportionality
    Example of Swiss formula
• T1 = aT0/(a+T0)
• With parameter a of 140, a tariff of 350%
  is reduced to 100%
• With parameter a of 60, tariff reduced to
  51.2%
• With parameter a of 16, tariff reduced to
  15.3%
 Blended and banded formulae
• Blended formula, where tariffs are reduced
  according to a mix of three approaches: the
  Uruguay Round approach, the Swiss formula,
  and cutting tariffs to zero.
• Banded (or tiered) formula, where higher bands
  would be subject to a higher average reduction
• Harbison proposed using UR formula within
  each band
• Options for flexibility – UR formula, sensitive
  products
Figure 1: Comparison of UR formula1), Swiss formula2) and Harbinson proposal3)



                        180
                        160
                        140
   final tariff rates




                        120
                        100
                         80
                         60
                         40
                         20
                          0
                              0   50           100              150            200         250
                                               initial tariff rates

                                  UR Formula    Swiss Formula         Harbinson proposal


1) A uniform cut of 36% is assumed for the UR formula. 2) A value of 25 is assumed for the coefficient of the Swiss
formula 3) The highest possible values for developed countries are assumed within each band of the Harbinson-Proposal.

Source: Own calculations, FAL.
           Domestic support
• AMS trade-distorting support: how much
  reduction? Reduction method – should support
  be reduced by a given amount or to a particular
  level? Limit product-specific support/
• De minimis – what to do about it?
• Blue Box – eliminate it or discipline it?
• Green Box – should criteria be tightened?
  Should additional measures be allowed, e.g.
  non-trade concerns
           Export competition
• Export subsidies – various roads possible to full
  elimination (by commodity, by tightening value
  and volume constraints)
• Export credits – discipline by rules, or by
  constraining government outlays?
• Food aid – is food aid a form of subsidised
  export?
• Exporting State Trading Enterprises – issues
  over government guarantees, monopolistic and
  monopsonistic powers, ability to price
  discriminate, price pooling
              Section 3.

• Negotiating positions in the Doha Round
            Initial US position
• Two phase process, leading to complete
  liberalisation
• Elimination of export subsidies within 5 years
• Use of harmonising tariff reduction formula to
  ensure maximum tariff is 25%
• Expansion of TRQs
• Limit AMS to 5% of value of agricultural
  production and eliminate Blue Box
• Limited SDT for developing countries
           Initial EU position
• Continuation of UR formula for tariff reductions
  (36% on average with 15% minimum)
• 55% cut in AMS subsidies over 6 years
• Reduction in export subsidy expenditure by 45%
  and elimination for specific products
• SDT for developing countries, including free
  access for the least developed countries
• Emphasises non-trade concerns such as food
  labelling, animal welfare, geographical
  indications and precautionary principle in the
  agricultural negotiations
      The July 2004 Framework
             Agreement
• Followed the failure at Cancun and the
  Lamy/Fischler letter offering to
  conditionally eliminate export subsidies
• Pre-modalities document – set out
  principles to guide the negotiations but
  contains no figures and little structure
   July 04 Framework Agreement –
            market access
Tariff cuts          Substantial improvement in market access through
                     tariff reductions from bound rates.
                     Single approach for all countries: tiered formula to
                     ensure progressivity. Types of reduction commitments
                     within bands and number of bands to be negotiated.
                     Role of a tariff cap to be evaluated.

                     Designation of an “appropriate number” of sensitive
                     products, which would be subject to a mix of tariff
                     cuts and TRQ expansion.
Tariff rate quotas   Reduce in-quota tariffs and improve administration (as
                     part of balance of concessions).
                     Some TRQ expansion for all sensitive products.
    July 04 Framework Agreement -
             market access
Safeguards                 Future of special agricultural safeguard (SSG) under
                           negotiation.
                           Establish new special safeguard mechanism (SSM) for
                           developing countries.
Special and differential Proportionately less tariff reductions for developing
treatment for developing countries, with longer implementation period.
countries
                           Developing countries may designate special products on
                           criteria of “food and livelihood security,” which would be
                           subject to more flexible treatment.
                           Fullest possible liberalization of trade in tropical products
                           and alternatives to illicit narcotic crops by developed
                           countries.
Other                      Tariff escalation reduced by formula to be agreed upon.
                           Erosion of preferences to be addressed using Harbinson
                           Para 16 as reference.
  July 04 Framework Agreement –
          domestic support
Amber Box   Reduce total aggregate measures of support (AMS)
            substantially by use of tiered formula: greater efforts to
            reduce support by countries with higher Amber Box
            payments.
            Cap product-specific AMS levels at historical averages.

            Reductions in total AMS should lead to product-specific
            reductions.
Blue Box    Redefine to include payments with production limiting
            requirement and those with no production required:
            include payments based on fixed areas and yields and
            headage as well as payments based on less than 85% of
            base production.
            Cap payments to 5% of agricultural production from start
            of implementation period.
   July 04 Framework Agreement –
           domestic support
Green Box              Review Green Box criteria and improve
                       surveillance and monitoring.
De minimis level       Negotiate the reduction of the level of de minimis
                       support.
Special and            Developing countries have longer implementation
differential treatment periods.
for developing
countries
                       Developing countries have lower reduction
                       coefficients and higher de minimis levels.


                       Developing countries retain the use of Article 6.2,
                       allowing extra scope for domestic program.
    July 04 Framework Agreement -
           export competition
Export subsidies   Eliminate export subsidies by a credible end date.
                   Schedule and modalities of reductions to be agreed.

Export credits     Eliminate export credits, guarantees, and insurance
                   programs with repayment period of more than 180 days.
Food aid           Eliminate food aid that is not in conformity with
                   disciplines to be agreed. Disciplines will be aimed at
                   preventing commercial displacement.
                   Other food aid issues (role of international organizations,
                   humanitarian and development issues, and provision of
                   aid in grant form) will be discussed in negotiations.
State trading      Eliminate trade-distorting practices of state trading
enterprises        enterprises.
                   Further negotiation on issue of use of monopoly powers.
   July 04 Framework Agreement –
          export competition
Special and     Longer implementation periods for reductions and
differential    elimination.
treatment for
developing      Developing countries to continue to benefit from Article
countries       9.4 exceptions.
                Appropriate provisions for export credits in line with
                Decision on Least Developed and Net Food-Importing
                Countries.
                Developing countries to receive special consideration in
                negotiation of disciplines on STEs.
                Ad hoc temporary financing arrangements relating to
                exports to developing countries may be agreed in
                exceptional circumstances.
Export          Strengthen disciplines on export prohibitions and
restrictions    restrictions.
Market access – what needs to
         be decided?
• The tiers (how many? Which thresholds?)
  – G20 proposal at Dalien accepted as basis for
    discussion
• The tariff reduction formula within each tier
  – Linear cut, progressive linear cut, Swiss
    formula, Uruguay Round approach (allows for
    flexibility)
• Sensitive products
  – How many, and what treatment?
• Crucial – the overall level of ambition
    The AVE (ad valorem equivalent)
                issue
• Specific and mixed tariffs have to converted into AVE’s to know into
   which tier they fall
• AVE conversion is straightforward for some tariff lines; Members use
   the 'unit value' method in these cases, basing the conversion on notified
   import values in the WTO Integrated Database (IDB) and import
   volumes.
• Complications arise where preferences or tariff quotas are involved. In
   such cases, import prices often differ significantly from the world prices
   compiled in the UN commodity trade statistics (ComTrade) database.
• Agricultural exporters would like to see the conversion based on the
   lower world prices, which would lead to higher AVEs, and eventually,
   steeper tariff cuts.
       G-20 market access proposal
               July 2005
                   Developed countries             Developing countries
No. of bands                  5                               4
Thresholds      Thresholds        Linear Cuts    Thresholds       Linear Cuts
                    0 ≤ 20            v%             0 ≤ 30           <v
                 > 20 ≤ 40           w%           > 30 ≤ 80          <w
                 > 40 ≤ 60            x%         > 80 ≤ 130           <x
                 > 60 ≤ 80            y%            > 130             <y
                     > 80             z%
               Where v < w < x < y < z
Formula        Linear cuts in each tier
High tariffs   Cap: 100%                        Cap: 150%
          US market access proposal
                 July 2005
                   Developed countries              Developing countries
No. of bands                  4                                 4
Thresholds      Thresholds        Linear Cuts     Thresholds        Linear Cuts
                    0 ≤ 20            v%              0 ≤ 20            ?v

                  21 ≤ 40            w%             21 ≤ 40            ?w
                  41 ≤ 60             x%            41 ≤ 60             ?x
                    > 60              y%              > 60              ?x
               Where v < w < x < y
Formula        Progressive linear cuts in each tier, with adjustments for
               discontinuities, OR
               Swiss formula in top tier, progressive cuts in two middle bands,
               and Uruguay Round approach in lowest band
          EU market access proposal
                 July 2005
                   Developed countries                Developing countries

No. of bands                   3                                  3

Thresholds      Thresholds         Linear Cuts      Thresholds        Linear Cuts

                     0 ≤ 20            v%               0 ≤ 30           0.67v

                 > 20 ≤ 100           w%            > 30 ≤ 150          0.67w

                   > 100               x%              > 150             0.67x

               Where v < w < x

Formula        Linear cuts in each tier, plus further flexibilities (Uruguay
               Round approach)
High tariffs   No cap                             No cap
 Zurich 10 Oct 2005 proposals
• US, EU and the G20 all made proposals
• The US proposal was for two stage
  process:
  – Initial stage of significant reductions in tariffs
    and trade-distorting domestic support, and
    elimination of export subsidies, over five years
  – Five year reductions pause to review effects
  – Further 5 years to eliminate remaining tariffs
    and trade-distorting support
    US market access proposal
• The US proposed four identical bands for developing
  and developed countries -- below 20 percent, 20-40
  percent, 40-60 percent, and above 60 percent.
• Tariff cuts to rise progressively through each band, with
  developed countries making reductions of 55-65, 65-75,
  75-85, and 85-90 percent respectively within the four
  bands.
• The US did not specify the depth of tariff cuts it would
  seek from developing countries, but said that they would
  only be "slightly" lower than those undertaken by
  developed countries.
• It also suggested capping developed country tariffs at 75
  percent and limiting the number of 'sensitive products'
  that Members can designate for relatively low tariff
  reductions to one percent of dutiable tariff lines.
          US market access proposal
                 Oct 2005
                   Developed countries                Developing countries
No. of bands                  4                                 4
Thresholds      Thresholds        Linear Cuts     Thresholds        Linear Cuts
                     0 ≤ 20        55-65%              0 ≤ 20       Slightly lower

                  21 ≤ 40          65-75%             21 ≤ 40       Slightly lower
                  41 ≤ 60          75-85%             41 ≤ 60       Slightly lower
                     > 60          85-90%              > 60         Slightly lower
Formula        Progressive linear cuts in each tier

               Number of sensitive products limited to 1%, with full
               compensation via TRQ expansion.
Tariff cap     75%
   G20 market access proposal
• Average minimum tariff reduction of 54 percent
  in developed countries and an average
  maximum tariff cut of 36 percent in developing
  countries.
• To accomplish this, the G-20 proposes
  establishing different sets of tiers for developing
  and developed countries, coupled with higher
  tariff cuts for the latter.
• The G-20 proposal says that the different
  thresholds and tariff reductions are necessary to
  ensure that developing countries do not end up
  with a disproportionate burden of commitments.
       G-20 market access proposal
                Oct 2005
                   Developed countries              Developing countries
Thresholds      Thresholds       Linear Cuts     Thresholds       Linear Cuts
                    0 ≤ 20           45%              0 ≤ 30         25%
                 > 20 ≤ 50           55%          > 30 ≤ 80          30%
                 > 50 ≤ 75           65%          > 80 ≤ 130         35%
                    > 75             75%             > 130           40%
               Sensitive products limited to 1% of total, with maximum
               deviation of 30% from regular tariff cut
Formula        Linear cuts in each tier
               No new TRQs (in effect limiting sensitive product status to
               products currently with TRQs)
High tariffs   Cap: 100%                        Cap: 150%
    EU market access proposal
• Now proposed four tariff bands. Cut tariffs on products in
  the lowest band by 20 percent, rising to 50 percent for
  tariffs above 90 percent (60% if there is flexibility).
• Linear cuts (giving up UR approach). Some limited
  flexibility around a linear cut in some bands (‘pivoting’).
• Signalled that it was willing to lower its number of
  sensitive products from ten to eight percent of tariff lines,
  but the 160 products that this would cover remained far
  higher than the one percent figure put forward by the US.
• Accepted the G-20's proposed farm tariff caps of 100
  percent for developed countries and 150 percent for
  developing ones.
          EU market access proposal
                10 Oct 2005
                   Developed countries                Developing countries

Thresholds      Thresholds        Linear Cuts      Thresholds        Linear Cuts

                     0 ≤ 30          20%                0 ≤ 40         13.3%

                 > 30 ≤ 60           30%            > 40 ≤ 80           20%

                 > 60 ≤ 90           40%            > 80 ≤ 120         26.6%

                    > 90          50% (60%            > 120            33.3%
                                  with some
                                  flexibility)
               Possibility of new TRQs, giving flexibility in defining sensitive
               products
Formula        Linear cuts in each tier, except for highest tier

High tariffs   100%                               150%
          EU market access proposal
                28 Oct 2005
                   Developed countries                Developing countries

Thresholds      Thresholds        Linear Cuts      Thresholds        Linear Cuts

                     0 ≤ 30     35% (20-45%)            0 ≤ 40     25 (10-40%)%

                 > 30 ≤ 60           45%            > 40 ≤ 80           30%

                 > 60 ≤ 90           50%            > 80 ≤ 120          35%

                    > 90             60%              > 120             40%

               Possibility of new TRQs, giving flexibility in defining sensitive
               products
Formula        Linear cuts in each tier, except for lowest tier

High tariffs   100%                               150%
         EU market access offer
             28 Oct 2005
• Mandelson claims EU offer will lead to 46%
  reduction in its average agricultural tariff (cutting
  from average 23.0% to 12.0%), US claims 39%
• Offer is subject to conditionalities
   – NAMA: Swiss formula with ceiling of 10% for
     developed countries(15% for developing)
   – Services: complementing the request/offer approach
     with ambitious individual, mandatory numerical
     targets
   – Progress on the development agenda: package of
     agreement-specific proposals, Trade Related
     Assistance package, duty-free and quota-free access
     for LDCs
        EU proposal – treatment of
            sensitive products
• Sensitive products should      Example I
  result in substantial market   • AVE tariff = 25%
  access that is still lower     • Normal tariff cut = 35%
  than would be implied by
  full tariff cut through TRQ    • Applied cut for sensitive
  increases                        product = 15%
• Increase in TRQ is             • Tariff cut deviation = 20%
   Tariff cut deviation*         • Market access coefficient
                                   = 0.8
   market access coefficient                           20 % * 0.8
                                 • TRQ increase =
   /(1 + AVE)                                        (100  25)%
                                        = 12.8%
       EU proposal – treatment of
           sensitive products
Example II                     • Minimum deviation of
• AVE tariff = 100%              one-third and maximum
• Normal tariff cut = 60%        deviation of two-thirds of
                                 the tariff cut in the band
• Applied cut for sensitive      within which the line falls
  product = 35%
• Tariff cut deviation = 75%   • TRQ increase expressed
                                 as a percentage of
• Market access coefficient      current imports of the
  = 0.8                          tariff line in question
• TRQ increase =
       = 30.0%                 • Special Safeguard
                                 Clause kept for beef,
                                 poultry, butter, fruits and
                                 vegetables, sugar
       Market access proposals -
               summary
• EU proposal is less ambitious (60% cut on tariffs over
  90%) than either G-20 or US proposal, both of which
  have higher percentage reductions kick in earlier
  because the tiers are set at lower levels.
• The G-20 would have developed countries impose a 75
  percent cut on tariffs above 75 percent.
• The US, for its part, prefers an even deeper cut of about
  90 percent for tariffs above 60 percent.
• EU proposal to shelter 8% of products as sensitive
  products with minimum 33% cut of required tariff band
  contrasts with G-20 and US proposal for 1% sensitive
  products and minimum 70% cut of required tariff band.
• US and G-20 also object to the ‘pivot’ proposal now
  confined to one band
  Domestic support proposals
• EU-US Joint proposal August 2003
  – Substantial reductions in Amber Box
  – Reduction in de minimis support
  – Blue Box support capped at 5% of total value
    of agricultural production
  – No capping or reduction of Green Box support
  Framework Agreement July 2004
    Domestic support proposals
• Strong element of harmonisation; higher levels of trade-distorting
  support will be subject to deeper cuts
• Substantial reduction in Overall Distorting Support from bound
  levels (= AMS + Blue Box + de minimis) according to a tiered
  formula
• 20% cut (downpayment) in bound ODS level in first year
• Bound AMS to be reduced substantially using tiered approach
• Product-specific AMS will be capped at their respective levels and
  there will be reductions in some product-specific support
• De minimis to be reduced
• Blue Box criteria expanded to allow payments linked to price but not
  to production (US counter cyclical payments) but capped at 5% of
  total value of production
• Green Box criteria to be reviewed and clarified, ensuring its basic
  effectiveness is maintained and that non-trade concerns are taken
  into account
      EU domestic support offer
       Zurich 10 October 2005
• 70% reduction in AMS
• Acceptance that EU will be in the top tier of AMS
  cuts with smaller cuts for other countries (note
  that tiers are determined by absolute
  expenditures, not percentage importance)
• 65% and possible more reduction in de minimis
• Willingness to cap Blue Box at less than 5%
• Commitment to negotiate on product-specific
  caps
       EU domestic support offer
           28 October 2005
• Proposes three tiers with cuts of 70%, 60% and
  50%. Accepts EU will be in top tier and US in
  second tier, provided it makes sufficient efforts in
  other aspects
• Proposes three tiers for ODS with cuts of 70%,
  60% and 50% with EU in the top tier
• De minimis support reduced by 80%
• Blue Box commitment as before (5% cap) but
  need to develop tighter disciplines on the new
  price-related supports
• Only clarification of Green Box criteria accepted
G20 domestic support proposal
• Three tiers for both ODS and AMS cut by
  80%, 70% and 60% respectively.
 US domestic support proposal
• Three tiers for AMS, with cuts of 83%,
  60% and 37% (justified as reducing the
  dispartiy in allowed AMS between the US
  and the EU from 4:1 to 2:1)
• Blue Box cap at 2.5%
• De minimis cut by 50%
• Agree to product-specific AMS caps
• Three ODS tiers to be cut by 75%, 53%
  and 31% respectively.
         Framework Agreement
           export competition
• Export subsidies to be eliminated
• Export credits longer than 180 days eliminated
  and specific disciplines on short term credits
• Trade distorting practices of export STEs
  including government financing eliminated.
  Future use of monopoly power to be subject to
  negotiation.
• Food aid to be disciplined. Providing food aid
  only in grant form to be addressed.
     EU export competition offer
         28 October 2005
• Reiterates commitment to phase out export
  subsidies, by an end date to be agreed
• Calls for short-term export credits to be
  disciplined by preventing government financing
• Eliminate export STE privileges including
  monopoly powers, single desk selling, price
  pooling etc.
• Food aid to be given only as cash and not in-
  kind.
US export competition proposal
• Export subsidies to be eliminated by 2010 with
  accelerated elmination for specific products
• Elimination of monopoly rights and financial
  privileges for export STEs
• Accepts tighter disciplines on non-emergency
  food aid, but rejects ‘cash only’
• Bring export credit programmes in line with
  commercial terms
• End differential export taxes
 Non-trade concerns (raised by
             EU)
• Food safety, and Article 5(7) of the SPS Agreement on
  precautionary principle
• Mandatory labelling (presumably with respect to GMOs
  and animal welfare) and Geographical Indications
• Food security for developing countries (Development
  Box)
• Protecting the environment (but no specific demands –
  multifunctionality yesterday’s game)
• Rural development – but no specific demands
• Animal welfare : specific demand for inclusion of support
  payments in the Green Box
              Section 4.

• Doha Round – success or failure
        Hong Kong outcome
• Progress in the Ministerial Declaration
  – End date for export subsidies (with parallel
    disciplines to be agreed by 30 April 06)
  – Some clarity on the modalities for domestic
    support reductions
  – Minimal progress on market access
  – Duty free and quota free access for least
    developed countries
  – Compromise on the cotton initiative
  – Aid for trade package
 Prospects for the Doha Round
• US commitment to successful outcome doubtful
  despite Bush rhetoric
  – Farm lobby and Congress deeply suspicious (e.g.
    CAFTA vote)
  – Trade Promotion Authority runs out mid 2007

• Developing countries (G20) may feel no deal is
  better than a bad deal
  – Concerns of weakest developing countries must be
    addressed (e.g. cotton)

• EU the champion of a Development Round
  – But agriculture ministers (i.e. France) keeping tight
    rein on the negotiators
          Prospects post-Doha
• Failure of Doha
  – URAA lives on, without the protection of the
    Peace Clause
  – Regional integration agreements
     • e.g. Mercosur
  – Litigation rather than negotiation?
     •   US upland cotton
     •   EU sugar
     •   EU bananas
     •   GMOs?
   Prospects post-Hong Kong
        December 2005
• Doha successfully concluded 2006
  – Implementation into early 2010s, when export
    subsidies finally eliminated
  – Further CAP reform before end of the
    decade?

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:88
posted:1/8/2012
language:English
pages:68