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State of WTO Agricultural Negotiations. Meeting on the Integrated Assessment of Trade Liberalization in the Agriculture Sector 19-20 February 2003. Note: The views expressed do not represent the WTO Secretariat or the m ember states of the WTO. Introduction.
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State of WTO Agricultural Negotiations Meeting on the Integrated Assessment of Trade Liberalization in the Agriculture Sector 19-20 February 2003 Note: The views expressed do notrepresent the WTOSecretariat or the memberstates of the WTO.
Introduction • A first draft of the modalities was presented to WTO Ministers last week in Tokyo by the Chair of the Special Session (Mr S. Harbinson). They will be proposed again at the special session of the committee on agriculture at the end of this month. The paper is available at the WTO website: www.wto.org • The proposals cover market access, export competition, domestic support, S & D provisions and non-trade concerns. • Overall members are still far apart on many of the proposals. Fundamentally, the issue is the level of ambition of further reform in agricultural trade • These spill over into the methods to be applied in preparing draft schedules and matters relating to the rules and disciplines of the Agreement
Outline • Mandate of negotiations • Timeline of negotiations • Major areas of negotiations • Market access (tariffs, tariff quotas, special safeguard, special treatment) • Export competition (export subsidies, export credits) • Domestic support (amber, green, blue boxes) • Background information on rice
Doha Mandate • Doha Declaration 14 November 2001 on Agriculture • Building on the work undertaken already • Long term objective of fair and market orientated agriculture trading system • Doha Work Programme: • substantial improvements in market access • Reductions of, with a view to phasing out, export subsidies • substantial reductions in trade distorting support • Special and differential treatment integral to negotiations and outcome • Take account of non-trade concerns
Timeline, 2003-05 • Ministerial Meeting in Tokyo (1st draft of modalities) • February 2003 – Special Session of Committee on Agriculture • 31 March 2003 - Modalities to be established. • Fifth Ministerial Conference (Cancun) in September 2003 - members are to produce their first offers or comprehensive draft commitments • The negotiations are to end by 1 January 2005
Proposal on Tariffs (Applied to Developed Countries) • The following reductions shall apply to final bound tariffs over a period of 5 years: • For all tariffs greater than 90%, average reduction by 60 percent with a minimum cut of 45 percent per tariff line • For all tariffs lower than or equal to 90% and greater than 15%, average reduction by 50 percent with a minimum cut of 35 percent per tariff line • For all tariffs lower than or equal to 15%, average reduction by 40 percent with a minimum cut of 25 percent per tariff line
Other Aspects of Tariff Proposals • Tariff preferences • To minimize the loss of tariff preferences received by some developing countries, the tariff reduction can be implemented in 8 (instead of 5) years • However, this shall be applicable only for products representing a quarter of total exports of beneficiary countries • Tariff Escalation • Where tariffs on processed products are higher than on primary products, the tariff reduction must be higher on the processed products
Proposal on Tariffs (Applied to Developing Countries) • Strategic Products • Developing countries can exempt certain products as “strategic products” with respect to food security, rural development and/or livelihood security. Tariffs would be reduced by 10% over ten years with a minimum cut of 5% • Other agricultural products (implemented over 10 years) • For all tariffs greater than 120%, average reduction by 40 percent with a minimum cut of 30 percent per tariff line • For all tariffs lower than or equal to 120% and greater than 20%, average reduction by 33 percent with a minimum cut of 23 percent per tariff line • For all tariffs lower than or equal to 20%, average reduction by 27 percent with a minimum cut of 17 percent per tariff line
Tariff Quotas (Applied to Developed Countries) • Final bound tariff quotas, which are less than 10% of current domestic consumption, shall be increased to 10% in equal installments over a 5 year period. Up to a fourth of tariff lines can be bound at 8% provided that a corresponding number of tariff lines are bound at 12% • Current domestic consumption is the average consumption over the 1999-2001 period • In-quota duty free access shall be given for tropical products, whether in processed or primary form
Tariff Quotas (Applied to Developing Countries) • Tariff quota volumes need not be expanded for strategic products • For other agricultural products, final bound tariff quotas that are less than 5.5% of current domestic consumption shall be increased to 6.6% in equal installments over a 10 year period. Up to a fourth of tariff lines can be bound at 5% provided that a corresponding number of tariff lines are bound at 8%
Special Safeguards • These are to be eliminated for developed countries after the period of tariff reductions • Developing countries shall retain the right to use special safeguards
Export Subsidies (Applicable to Developed Countries) • All export subsidies shall be eliminated within 10 years. This shall be conducted in two phases: • For agricultural products representing at least half of the aggregate final bound level of budgetary outlays, subsidies shall be eliminated within 5 years • The remaining products shall be reduced so that by the 10th year, budgetary outlays and quantities shall be reduced to zero
Export Subsidies (Applicable to Developing Countries) • All export subsidies shall be eliminated within 13 years. This shall be conducted in two phases: • For agricultural products representing at least half of the aggregate final bound level of budgetary outlays, subsidies shall be eliminated within 10 years • The remaining products shall be reduced so that by the 13th year, budgetary outlays and quantities shall be reduced to zero
Domestic Support • Developed Countries: • Amber box (final bound total AMS) measures shall be reduced by 60% over a period of 5 years. • Blue box measures shall be bound at the average level of the period 1999-2001 and reduced by 50% over a period of 5 years. • Developing Countries • Amber Box measures shall be reduced by 40% in equal installments over a period of 10 years. • Blue box measures shall be reduced by 33% over a period of 10 years. • Article 6.2 has been enhanced with additional measures (concessional loans, risk management, etc.) which are exempt from reduction commitments
Domestic Support: Green Box • Green box measures shall be maintained. • Proposal to include animal welfare and new S & D elements, including support for staple crops for food security purposes and for maintenance of small scale family farms.
Trends in Rice Production and Trade • Over the past twenty years, rice production, yield and trade have all gone up. • Production has gone up by 2.1 per cent annually. • Trade measured by rice imports has gone up more at 2.7 per cent. • Area devoted to rice has only grown by 0.3 percent per annum so that yields have gone up world-wide from 2.8 metric tons per hectare in 1980 to about 4 metric tons per hectare in 2001.
