ECOWAS Regional Workshop on Agriculture Negotiations and food security Conakry, 8-10 April 2002 UNCTAD THE DOHA WORK PROGRAMME: THE UNCTAD PERSPECTIVE Manuela Tortora Trade Negotiations and Commercial Diplomacy Branch UNCTAD 1 The context: from Seattle to Doha What changed: • the increasing role of the developing countries and the LDCs in shaping the trade agenda • the relevance of the implementation issues • the negotiations on the “built-in agenda” since 2000 • the international context What has not changed: • the role of the agriculture in the negotiations • the role of the developing countries and the LDCs in the world trade 2 The main features of the Doha Work Programme: • A “revival” of the S&D issues • Very broad agenda, more ambitious than the Uruguay Round • A “single undertaking” at the end of the process • Decisions on the four “Singapore issues” (investment, competition, government procurement, and trade facilitation) to be taken at the 5th Ministerial Conference (Mid-2003) • Tight negotiating deadlines 3 Is it a “development agenda”? It could become one, IF: the implementation issues raised by the developing countries are addressed; the S&D provisions are clarified and the development concerns taken into account; in agriculture trade, the imbalances are corrected; effective assistance is provided to enhance the negotiating capacity of the developing 4 countries. The negotiating mandates in the overall Doha Work Programme: The Doha Ministerial Declaration sets the objectives of the negotiators but look also at : Para.6 of the Preamble of the Declaration (“precautionary principle” with other words) the Decision on the Implementation Issues the Outstanding Implementation Issues 5 The place of agriculture in the overall Doha Work Programme: The mandates on agriculture should be seen in parallel with: implementation issues (in particular SPS) geographical indications (TRIPS) rules of origin WTO rules on regional agreements (ACP) review of the S&D provisions and the work on the “small economies” 6 The current and medium term international context of the negotiations: Signs of economic recovery in the United States (not yet in the EU, not in Japan) “Steel war” between the United States and the EU New trade instruments in the United States implying tough positions on agriculture trade No visible changes in the EU position (the Common Agriculture Policy has its own pace) Divisions among the developing countries regarding the agriculture negotiations 7 The position of the United States in the negotiations on agriculture: 2 new instruments are being discussed at the US Congress these days: the new Farm Bill , that sets the US the “Trade agriculture policy, Promotion through 2 drafts: Authority” (fast • the “Farm Security Act” of the House, track autorisation) and sets the • the “Agriculture, objectives of the US Conservation and Rural Enhancement trade negotiators Act” of the Senate. 8 The current situation of these 2 bills: The “Trade Promotion Authority” is still being discussed The Congress is now finalising the merger of the 2 draft bills into one, that should be approved by midApril 2002, with a maximum budget of US$ 73.5 billion in the next 10 years 9 6 main objectives set for the US trade negotiators in the Trade Promotion Authority in agriculture: 1.-Obtain reduction of subsidies and tariffs in particular for the items where the US tariffs are low; 2.-Seek “reasonable” transition periods for the imports that are “sensitive” for the US producers; 3.-Achieve the reduction or elimination of subsidies that affect market access opportunities for the US products. 10 6 main objectives set for the US trade negotiators in the Trade Promotion Authority in agriculture: 4.-Seek the elimination of the state-trading enterprises; 5.-Seek an end to unnecessarily restrictive rules for the administration of quotas; 6.-Preserve non-trade distorting programmes that support American farms and rural communities. 11 Great similarities in the 2 draft farmbills: • Both texts increase the direct payments to the US farmers • Both texts provide for renewing or increasing the amounts allocated to trade promotion, international food aid and subsidies to US farmers • Both texts provide for compensatory payments in case of market prices falling below certain levels • Both texts authorise the Secretary of Agriculture to adjust payments to ensure 12 compliance with the WTO obligations Key differences between the 2 draft bills: • They provide for different loan rates; • They set different target prices to determine the compensatory payments; • They set different amounts for the fixed payments to the farmers. 13 An example of the subsidies provided by these draft bills: • The maximum fixed payment that a farmer can receive is raised from US$ 40.000 to 50.000 per year; • If market prices fall below the “target prices”, the payment can be raised up to US$ 150.000. Today, 36% of the US farms receive fixed payments, but in some States the share is up to 70% of the farms; The average farmer receives US$ 5.830 per year, while the large corporations accumulate payments up to US$ 500.000. 14 The position of the US Executive: • Expressed its reservations on both drafts because they are not in compliance with the US obligations in the WTO. • Considers that it will be difficult to monitor the level of domestic support, and very difficult to reduce it if so decided in the negotiations. 15 The negotiating objectives of the US Executive: • Focus on the markets of the middle-income developing countries, where there is more spending on the import of agriculture items; • In the LDCs, the food shortages provide opportunities for US food aid in case of surplus in the US market; • Lower tariffs and elimination of export subsidies, particularly in the EU; • Eliminate regulations on biotechnology. 16 Some conclusions:what can be expected? • The negotiations on agriculture will be difficult, with probably last-minute arrangements between the US and the EU, and possible trade-offs in other areas (as usual…); • Negative political climate because of the steel war and the domestic agriculture policies of the US and the EU; • Very limited time available in the timetable as approved last week. 17