First draft of proposals to break the deadlock in agricultural negotiations
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CTA. 2003. First draft of proposals to break the deadlock in agricultural negotiations. Agritrade, March 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52929
The first draft of a paper (the 'Harbinson paper') setting out a basis for...
The first draft of a paper (the 'Harbinson paper') setting out a basis for finding a way forward in the agricultural negotiations was circulated by the Chair of the WTO Committee on Agriculture on February 17th 2003. This was the product of a series of meetings and represented a first attempt to bridge the wide gulf between member states' positions. On market access the draft proposed the following tariff reductions for developed countries: an average 60% reduction on all tariffs greater than 90% over a five-year period, with a minimum reduction of 45% per tariff line; an average 50% reduction on all tariffs between 15% and 90% over a five-year period, with a minimum reduction of 35% per tariff line; an average 40% reduction on all tariffs lower than 15% over a five-year period with a minimum reduction of 25% per tariff line. Where tariffs on processed products are higher than on the raw material, tariff reductions should be higher than those required for the raw material. Where non-ad-valorem tariffs are applied, cuts should be based on the tariff equivalent, in line with the formula outlined above. In drawing up their tariff offers it is suggested that developed countries should target concessions on developing countries. For developing countries the following tariff reductions were proposed: an average 40% reduction on all tariffs greater than 120% over a five-year period with a minimum reduction of 30% per tariff line; an average 33% reduction on all tariffs between 20% and 120% over a five-year period with a minimum reduction of 23% per tariff line; an average 27% reduction on all tariffs lower than 20% over a five-year period with a minimum reduction of 17% per tariff line. Developing countries however should have the option of declaring certain products as strategic products (SP) where these are important for food security, rural development or livelihood security. These products could then be subjected to special treatment, involving an average 10% reduction in tariffs with a minimum of 5% per tariff line. The paper also contains proposals for the modification of arrangements for tariff-rate quotas, involving an expansion of tariff-rate quotas to levels equivalent to 10% of domestic consumption (6.6% for developing countries, excluding strategic products). It is also proposed that in-quota tariffs on tropical products be removed by developed countries, but otherwise no reduction in in-quota tariffs is to be required. The draft paper calls for an end to Special Safeguard Provisions for developed countries at the end of the implementation period. Developing countries would be allowed to retain special safeguard measures for strategic products. On export support, proposals are put forward for phasing out export subsidies over a six-year period for products representing 50% of such support and over a nine-year period for the remainder. For developing countries reductions should take place over ten and thirteen years respectively. Proposals are also advanced for disciplining export credits, the activities of state-trading enterprises and the abuse of food aid. On domestic support, some proposals for amending the 'green box' provisions are advanced, but overall these provisions will largely be retained. 'Blue box measures are to be capped and subjected to a 50% reduction over five years (a 35% reduction over ten years for developing countries). 'Amber box' measures should be cut by 60% over five years (40% over ten years for developing countries). Least developed countries will not be required to undertake reduction commitments. It is proposed that developed countries should provide duty- and quota-free access for all least developed country exports. Comment: The tariff-reduction commitments the EU would make at the multilateral level in many product areas would simply reduce the value of the trade preferences extended to ACP countries under the trade provisions of the Cotonou Agreement and the EBA initiative. This would be despite the nominal commitment to maintaining the margins of preference extended under preferential trade regimes in favour of developing countries. In many respects this would only be possible under the EU's standard GSP scheme since the duties applied under this scheme are linked to the MFN duties applied. This being said, a provision is made for slowing down the rate of tariff reductions in those areas of particular importance to preferred trading partners, such as the ACP, by requiring the tariffs to be cut over eight years instead of five years and by calling for the abolition of all in-quota duties. In terms of the tariff-reduction commitments which developing countries are expected to commit to, a key determinant of the impact of such measures will be the extent to which other WTO rules effectively restrict trade-distorting forms of support. What is and what is not a trade-distorting form of agricultural support has now become a vital terrain of political discussion, with many of the EU's so called less trade-distorting or non-trade-distorting forms of support still having an important impact on production and export decisions. Indeed the entire objective of the CAP-reform process is to improve the price competitiveness of EU products on national and international markets. This policy is already causing EU production to expand despite major reductions in EU prices. This suggests that direct aid to EU farmers also has an impact on production levels and subsequent trade flows. It would therefore appear to be important that WTO rules establish effective disciplines for these kinds of support as well. The proposal that developed countries should provide duty- and quota-free access for all least-developed country exports is not directly relevant to least-developed country exports to the EU since the EU has already adopted such measures under its 'Everything but Arms' initiative. Overall there are concerns that issues of priority to developing countries, such as special safeguards (how to deal with import surges and food-dumping practices), special and differential treatment, and the establishment of a food-security mechanism, are being sidelined in the current intense negotiations.