WTO agriculture deal hangs in the balance

Parties to the World Trade Organisation (WTO) have missed the 30 April deadline to agree “modalities” or targets on negotiations on agriculture. The “modalities” phase deals with one of the most critical stages of the agriculture negotiations. It aims to set “modalities” or targets (including numerical targets) for achieving objectives set out in the Doha Ministerial Declaration of November 2001. These include substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support. This stage will determine the shape of the WTO negotiations final outcome in that the targets will be used by member states to come up with their first offers when negotiations start. Current indications are that no deal is again likely ahead of the 31 July deadline for countries to submit comprehensive draft schedules based on these modalities. Several meetings held in Geneva, Switzerland, since April have produced no deal, with developing countries accusing the West of trying to push through their proposals and ignoring the interests of others. The negotiations have centred on the three agricultural pillars of market access, domestic support and export competition. The contentious issue under the market access pillar is the treatment of trade in agricultural products, with a focus on products of strategic importance to developing countries and the Special Safeguard Mechanism (SSM). The SSM aims to provide developing countries and Least Developed Countries (LDCs) with an effective and flexible instrument to address their distinct susceptibilities to import surge disturbances and the effects of downswings in prices. Developing countries are seeking the insertion of a clause under the SSM that provides recourse for member states to impose additional duty on imports of agricultural products from rich nations whenever the quantities or monetary values involved exceed certain levels. Rich nations such as the United States, Australia, New Zealand and the European Union bloc are opposed to the proposal and feel the SSM should be designed to facilitate market liberalisation and must not be used for defensive purpose. Negotiations on the export competition pillar have revolved around the treatment of food aid, role of state enterprises in agricultural exports and export credits. “Modalities” on the domestic support pillar centre on subsidies on agricultural products and other trade distorting incentives. In a joint statement by member states of the Group of 33 (G-33), the African Group, the African Caribbean and Pacific (ACP) in Geneva on 10 May, the developing countries refused to accept a proposal by rich nations to improve market access for agricultural products from the West into developing economies. The G-33 is a group of over 40 developing countries concerned about the effects of liberalisation on small farmers. “G-33, African Group, ACP, and LDCs could not be expected to join consensus on any package on agriculture unless their food security, livelihood security and rural development needs are accommodated effectively and comprehensively through the commitments called for from them in the market access pillar, in particular the tariff reductions, Special Products and SSM,” said the joint statement. Delays in coming up with the “modalities” will affect most Southern African Development Community (SADC) countries whose economies depend on agriculture. In addition to food security, most SADC countries rely on agriculture for employment and foreign currency. ‘ sardc.net

June 2006
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