WTO-AoA NEGOTIATIONS STATE OF PLAY
GENESIS • WTO Came into existence on 1-1-1995 with the conclusion of Uruguay Round Multilateral Trade Negotiations at Marrakesh on 15th April 1994, to : • Provide common institutional framework for conduct of trade relations among members • Facilitate the implementation, administration and operation of Multilateral Trade Agreements • Lay down Rules and Procedures Governing Dispute Settlement • Provide Trade Policy Review Mechanism
Agreement on Agriculture (AoA) • To establish a fair and market oriented agricultural trading system through substantial progressive reduction in agricultural support and protection resulting in correcting and preventing restrictions and distortions in world agricultural markets.
AREAS OF COMMITMENTS • Domestic Supporti.e. subsidies by Governments to domestic producers; • Market Accessi.e. the disciplines on import restraints and tariffs; and • Export Competition i.e. export subsidies and other forms of export subsidisation.
Domestic Support • Green Box - Research, Extension, PDS, Decoupled Payments etc; • Blue Box - Production Limiting Subsidies ; • Amber Box - AMS-subject to reduction commitments viz • - Product specific (MSP) • - Non product specific (input subsidies-fert. Power, • irrigation) ; • Total Agricultural support reduction (Base period : 1986-88) • Developed countries 20 % (1995 - 2000) • Developing countries 14% (1995 - 2004) • De-minimis level • Developed countries 5% ; • Developing countries 10% .
Market Access • All non-tariff barriers including, Quantitative Restrictions to be abolished • Tariff cut Commitments : • Developed countries - Average 36% - Minimum 15% (1995 - 2000) • Developing countries - Average 24 % - Minimum 10% (1995 - 2004)
IMPACT ON INDIA (Market Access) • Bound tariff * levels for India: • Primary products 100% Processed products 150% Edible oils 300% • * (Some exceptions (119 items) are governed by other provisions of GATT Art.II 1(b).
Export Subsidies • Cut in value of subsidies • Developed countries - 36 % (1995 - 2000) • Developing countries - 24 % (1995 - 2004) • Cut in subsidised quantities • Developed countries - 21 % (1995 - 2000) • Developing countries - 14 % (1995 - 2004) • (Base Period : (1986 - 1990) • To develop internationally agreed disciplines to govern • export credits, guarantees or insurance programmes.
Doha Ministerial Conference • Fourth Ministerial Conference on WTO was held at Doha, Qatar from 9-13th November 2001 • This conference, inter alia, reviewed the progress of AoA negotiations and provide guidelines for future. • The Ministers at Doha committed themselves to negotiation aimed at substantial improvement in market access, substantial reduction in trade distorting domestic support and gradual phasing out of export subsidies. • The special and differential treatment - an integral part of the mandated agricultural negotiations.
India Seeks • Protecting our food and livelihood security by having sufficient flexibility for domestic policy measures. • Protecting domestic producers from the surge in imports or significant decline in import prices. • Substantial reduction in export subsidies and domestic support to agriculture in the developed countries for greater market access to products of developing countries. • Finally, a more equitable & fair trading framework for • agricultural commodities • MARKET ACCESS ISSUES CAN NOT BE SEEN IN ISOLATION TO SUBSIDY REGIME
Present Stage of Negotiations • The third phase of negotiations ended in March-2003. • As per original schedule, the modality of the Agreement were to be established by 31.03.2003. • The deadline for establishment of Modality has been missed • In the last one year a number of drafts for establishment of Modality have been proposed • The major drafts include, Harbinson’s original and revised draft, US-EU combined draft, Original Cancun Draft and the Derbez Text (Cancun revised draft )
Present Stage of Negotiations • The Cancun Ministerial failed to arrive at any agreement on modality for agriculture. • There was no willingness on part of developed countries to recognize the genuine concerns of the developing countries, especially in agriculture • The US & EU attempted to drive their own agenda, at the expense of Doha Declaration • The concerns of the developing countries were expressed by a group viz. G-20 at Cancun. • India, China, Brazil, Argentina and South Africa were the moving spirits behind the formation of this Group.
Present Stage of Negotiations • Some of important features of the two Harbinson Drafts are as follows: • Includes the crucial numbers. Framework proposes modalities. • Tariff reduction higher than Uruguay Round, using the concept of average and minimal reductions based on tariff bands. • Introduction of a new concept of Special Products for developing countries, average tariff reduction on SP to be at 10%, and minimum reduction, 5%. • Introduction of Safeguard Mechanism for developing countries.
Present Stage of Negotiations • Reduction mainly in the amber box support by developed countries. • Reduction in the De-minimis support for developed countries • Proposals only to discipline the Blue Box payments, no reduction. • Proposals to tighten the criteria for Green Box payments for developed countries, expansion of Green Box for developing countries • Elimination of direct export subsidies over a longer period. Indirect subsidies; no final proposal
Present Stage of Negotiations • The S&D for the developing countries remains on the lines as Uruguay Round. • The S&D for developing countries include, a marginally lower rate of tariff reduction, a longer implementation period, provision of Special Products with lower tariff reduction, provision of Safe guard mechanism, retention of provisions at para 6.2 of the present AoA, with possible widening and retention of de-minimus in Amber Box Support
Present Stage of Negotiations • The US-EU draft, and the two Cancun drafts are similar in nature and their main features are: • The drafts propose only a framework. They don’t indicate the key numbers • Aggressive reductions in tariff by using a hybrid formula. Swiss formula to be a component of the hybrid formula • Reduction for developing countries also to be by same formula, with lower final commitment. • SPs to be limited in numbers.
Present Stage of Negotiations • Reduction mainly in the amber box support by developed countries. • Reduction in the De-minimis support for developed countries. • Capping of product specific support in Amber Box • Expansion of Blue box by inclusion of direct payments. • Capping of the expenditure under new Blue Box, with a possible phased reduction over the implementation period. • No reduction in Green Box payments. The criteria for Green Box payments may possibly be reviewed. • Reduction commitments for developing countries lower with longer implementation period.
Present Stage of Negotiations • The provisions of Article 6.2 to be continued. • The de-minimus for the developing countries to be retained at 10%. • Elimination of export subsidies over an extended period during the implementation period. • The trade distorting elements of export credit to be similarly treated. • No specific timeframe for elimination suggested.
India’s stand on various drafts • The drafts fail to recognize the inter-linkages in the three pillars of AoA. • The reductions suggested in domestic support are minimal, as compared to the steep reduction in tariff included in the Draft. • The drafts fail to recognize the food security and livelihood concerns of the developing countries. • The drafts are not meeting the spirit of Doha Development Agenda.
Developments Post-Cancun Ministerial • The G-20 has survived the pressures of the developed countries and almost remained united on agriculture issues. • The Cancun process led to loss of confidence of developing countries in the developed countries. • The negotiations have formally not yet started at Geneva. • The stress, at present is more on arriving at bilateral understandings. • G-20 had bi-laterals with EU, one in Brazil and other in Geneva. • India has had separate bilateral discussions with USA as well as EU.