WTO Public Symposium 2003: Session XX – Trade and Agriculture

Panelists and Viewpoints

Panel Moderator: Celso Lafer, Professor, University of Sao Paulo, Brazil

Agriculture remains at the center of the current negotiations. Since the March 2003 deadline for establishing modalities for agricultural negotiations was missed, the prospect for commitments to be made in other key areas has also been threatened. The three pillars of the Agreement on Agriculture (AoA) that WTO members have committed to reform during the Doha Round are market access, domestic support and export competition.

Mark Vaile, Minister for Trade, Australia

The Doha Development Agenda constitutes a last chance at achieving agricultural reform, and the Cairns Group approach represents the only prospect capable of bringing it about. The EU’s proposal would maintain up to US$ 40 billion per year in trade-distorting subsidies, plus additional blue-box supports; while the US proposal would permit up US$ 30 billion per year in subsidies and blue-box supports. With respect to the elimination of export subsidies over the next three years for developed countries (six years for developing countries), plus other details of the Cairns Group proposal, the interests of the Cairns Group coincide well with those of the developing world. Though they are a popular scheme for those wishing to avoid market access reform, preferential trade agreements cannot effectively serve these interests. Australia has complemented its efforts toward trade reform with aid programs to alleviate poverty, especially in Africa.

Amb. Luzius Wasescha, Chairman of the OECD Trade Committee, Switzerland

Switzerland, though called protectionist, is the 11th largest importer of agricultural products in the world. GATT was originally established to restrain the strong and support the weak, and in 1947 agricultural trade was treated the same as the trade in all other products. This changed, however, as the US proceeded to withdraw its sensitive products from international competition, the EU put together the CAP outside of the multilateral agreements, and Switzerland joined the WTO only upon being guaranteed certain protections. Switzerland agrees with the Cairns Group that export subsidies should be eliminated, and this is an area where we would probably be able to be the most flexible. The labeling issue, however, is very important to Switzerland because of consumer demand.

Mustapha Mechahouri, Minister of Foreign Trade, Morocco

Agriculture is of utmost importance for Morocco, providing for employment and economic viability in rural areas. Forty percent of Moroccans participate in agricultural production, which accounts for 18% of GDP; and customs tariffs are the only tool that we can use as an agricultural producing developing country to protect our food security against subsidies imports from developed countries. For these reasons, Chairman Harbinson’s proposal on special safeguards and strategic products seems most viable. Considering the current state of negotiations, however, a high level of political engagement from WTO members will be necessary for any progress to be made.

Mr. Enheng Li, Minister Counselor, China

China is a large developing country with an experienced but out-moded agricultural sector, upon which its economic and social development remains highly dependent. China considers agriculture to be a core area of the Doha Development Agenda negotiations, its basic concerns being: 1) The level of ambition behind the negotiations and their three pillars should be seriously addressed; we are disappointed that no substantive progress has been made after several consultations. Modalities should be arranged to reduce domestic support, subsidies should be eliminated, and export credit should be tightened. 2) Special and differential treatment (SDT) for developing member countries is important. We are against classifying countries according to their perceived levels of development for access to special safeguard measures (SSM) and special products (SP) allowances. 3) Additional accommodations should also be made for recently acceded members having just made extensive commitments during accession.

Further Comments by Panelists and Delegates

Special and Differential Treatment (SDT)

A delegate from Canada remarked that many developing countries want SDT to protect some of their domestic markets for their own produce. Recalling that these countries acquiesced to the Sanitary and Phytosanitary Measures (SPS) Agreement, but never received the technical assistance promised to them for the application of the measures, will they be expected to believe what the US, EU and Japan promise them this time on Agriculture? Mark Vaile responded that, since agriculture in developing countries is un-subsidized, it should be accorded SDT provisions. The SPS quarantine, however, will still be applied. Australia does provide technical aid for SPS, believing that all countries should have the ability to apply it.

Market Access and Subsidies

Another Canadian delegate commented that the promotion of farmer empowerment is necessary and that Canada does not agree that the Cairns Group’s proposal is the only moral choice. He questioned the panel about how it would be willing to compromise in terms of market access to bridge the gap between the position held by Switzerland and that expressed during the Uruguay Round. Swiss Ambassador Luzius Wasescha responded that we must determine how persons can be compensated for losses due to increased market access before bridging the gap. Though we are hesitant, we are looking into proposals for re-shaping the Green Box that would not increase the imbalance between importers and exporters.

In light of Mr. Vaile’s comments about the distorting nature of EU subsidies, a delegate from Focus on the Global South rose the same issue relevant to US policy. Mr. Vaile responded that the Cairns Group takes the same stance against support measures by the US as it does against those by the EU, Japan and Korea. The difference is that the US has put a proposal on the table for agricultural reform.

Prioritization of Agriculture

Responding to a comment by Ambassador Wasescha that any changes in agricultural support would have to be made slowly because Swiss farmers would need time to adjust, Martin Khor from the Third World Network spoke on behalf of people in developing countries who he said have long expressed identical concerns. Workers in services and industry (which are certainly “multifunctional” in developing countries) also need time to adjust, but these sectors are nonetheless being subjected to big-bang liberalization. Would one not think that people in these sectors in developing countries need even more time and protection than the Swiss farmer? The developing countries feel cheated, having not received what they were promised in the Uruguay Round and what they paid for with the Services, TRIMS and TRIPS Agreements. Now they are being asked to pay again by making concessions on new issues.

Farmers in developing countries cannot get business because they cannot export to the North. Additionally, they are forced to compete in their own countries with subsidized goods flowing in from the North. The developing countries need special safeguard mechanisms, because we all know that subsides will not be lowered within the next 10 years. Because of the protracted unfairness of the system, developing countries should be allowed to re-apply the quantitative restrictions they were forced to give up in the last round. Rich countries should not be permitted to use agriculture as a chip to bargain for benefits in terms of investment, competition and procurement – These new issues should be given up for a while, and a resolution on agriculture should be made with the developing countries’ issues being of first priority. Ambassador Wasescha responded by pointing out that flexibility for developing countries is often built into the agreements; furthermore, the new issues should not be passed off as merely political, since there do exist other valid trade matters to be addressed besides agriculture.