BANCO INTERAMERICANO DE DESARROLLO
DEPARTAMENTO DE INTEGRACIÓN Y PROGRAMAS REGIONALES
INSTITUTO PARA LA INTEGRACIÓN DE AMÉRICA LATINA Y EL CARIBE
II SEMINAR ON INTERNATIONAL
AGRICULTURE TRADE NEGOTIATIONS
ALADI - IDB/INTAL - IICA - BCEIE
BUENOS AIRES, ARGENTINA
MAY 22-24, 2001
FTAA AGRICULTURE NEGOTIATIONS
PHASE I: PROGRESS AND PERSPECTIVES
MARIO BERRIOS
Inter-American Development Bank
Integration, Trade and Hemispheric Issues Division
PRESENTATION:
INTRODUCTION:
- Calendar - work accomplished
- Mandate; Substantive Agenda
PROGRESS REPORT:
- progress during Phase I
- Market access; Export Subsidies; Domestic Support; SPS; other issues
- Linkages to other FTAA negotiations
KEY ISSUES AND NEXT TASKS:
- key issues
- tasks for Phase II 2001-2002
PROSPECTS: POSSIBLE SCENARIOS
- potential effects from WTO negotiations on FTAA agriculture ngts
- trade negotiation authority
- market conditions for agricultural commodities
WHAT IS THE IMPORTANCE OF FTAA AGRICULTURE TRADE?
Schedule of agriculture trade negotiations
Negotiating Phase
FTAA
WTO
Pre-Negotiation Period
1994-98
1995-99
Start of Negotiations
1998
2000
Deadline to end negotiations
End of 2004
Open
implementation
By December 2005
undecided
Relationship to other areas of Same timetable
negotiations
Pending
Work accomplished to date:
• 10 negotiating sessions (August 1998 - Nov 2000)
• proposals submitted by all participants (country or grouping)
• dealt with all substantive areas under negotiation
• specific progress made on 4 areas:
- draft text Agriculture Chapter(made a public documnt)
- draft outline on methods/modalities for tariff ngts
- interaction between Negotiating Groups on
Agriculture and Market Access
- set target dates for (among others):
- finish ngts in 2004, implement in 2005
- April 2002: define methodologies on: tariff
ngts; elimination ES; defint/recomm
treatment of OMDT; identification NTMs
Mandate - issues for negotiation:
FTAA goal: creation of a free trade zone, liberalization agric trade
Area
of
negotiation
Market
Access
WTO
Continuation
process
FTAA
reform - Tariffs; non-tariff barriers
- coordination agric/non-agric market
access ngts
Export
Review/ngtn
ES - Agricultural ES affecting FTAA trade
Subsidies commitmnts
- Other measures and practices that have
- reform process
an effect equivalent to agricultural ES
Review/ngtn
DS Other trade-distorting practices for
Other
agricultural products
commitmts
support
measures - reform process
SPS
Identifying/developing
measures
to
facilitate trade, examining in depth
WTO/SPS provisions
- Special/differential
- Facilitate the integration of smaller
Others
treatment
for economies and their full participation
developing country
- Incorporate progress made in WTO ag
- Non-trade concerns
ngts
ISSUES AND SCOPE OF DRAFT AGRICULTURE CHAPTER
STRUCTURE OF DRAFT FTAA CHAPTER ON AGRICULTURE
Six sections:
• General provisions
• Market access and NTMs
• ES
• Other measures and practices that distort trade
• SPS
• Institutional Issues
• + Annexes
• general comments:
• 1 working document; different approaches still present
• market access: consistency and link to NGMA
• reference/consistency to WTO agreements noted
Market access - what has been considered :
•Tariff provisions:
• tariff elimination and potential exceptions
• working document on methods and modalities
• link/consistency/coordination with NGMA modalities
• issues:
• base tariff/period; nomenclature; timetables; methods
• NGAG: add specific MA provisions unique to agric
• NTMs:
• notification/counter-notification; listing;
• methodology on how to deal with NTMs
• Safeguards
EXPORT SUBSIDIES - what has been considered:
Definition: discussion on whether to include criteria related to:
• de jure or de facto
• reference to WTO AA Arts 1.e, 9, 9.1; WTO ASCV Annex I
• Elimination of ES:
• elimination on FTAA basis:
• date implementation
• how to offset ES imports from non-FTAA countries
• FTAA countries’ ES competition in non-FTAA markets
• non-circumvention: define disciplines on measures that have an
effect equivalent to ES
• areas of FTAA cooperation to eliminate ES at multilateral level:
• mechanisms to prevent importation of ES products from nonFTAA countries from entering FTAA markets
• disciplines on export credits/guarantees, food aid
• use of dispute sett rights in case of nullific access in 3rd mkts
OTHER MEASURES THAT DISTORT TRADE
what has been considered
• recognition of role of Domestic Support measures:
• importance of DS to agric sector but role in distorting production
and trade
• key issue under discussion: negotiate disciplines/commitments in
FTAA or WTO
• proposals on negotiating goals / cooperation in WTO ngts:
• max reduction; elimination blue box; overall limit; redefine green
box
• proposals to deal with DS in FTAA ngts:
• definition and what exceptions may be allowed
• elimination: methodology
• disciplines to prevent circumvention
• special and differential treatment
Sanitary and Phytosanitary Measures
• issues: cooperate to implement WTO agmt; specific goals
• General Provisions, rights and obligations
• Implementation of WTO agreement
• international standards
• harmonization
• equivalence
• assessment of risk
• pest or disease-free areas
• transparency
• control, inspection and approval procedures
• safeguard measures
• Technical assistance and cooperation
• Consultations and Dispute settlement
• Institutional Issues
Institutional Issues - FTAA agreement on
agriculture
• Consultations and Dispute Settlement
• FTAA new task to work on architecture of agreement:
• institutional issues
Linkages between agriculture and other
FTAA negotiating areas
• key links:
• market access
• subsidies, AD, CV
• dispute settlement
• potential new links:
• intellectual property
• investment
• competition policy
KEY ISSUES AND TASKS FOR PHASE II 2001-2002
• key issues:
• negotiation on domestic support
• elimination of Export Subsidies and mechanisms to enforce it
• disciplines on export credits/guarantee/insurance programs
• disciplines on Food Aid
• treatment of SPS measures
• sequencing, parallel or individual progress of different areas of ngts
• some of the key tasks for Phase II 2001- 2002
• methods/modalities: proposal in April and start ngtn in May 2002
• ES: April 2002: propose methodology for elimination
• OMDT: identify measures and methodology (April 2002)
• NTMs: identific/inventory/methodology in April 2002
• hemispheric data base
• notific/counterntif SPS measures and implementation WTO SPS agt
What impact could WTO ngts have on FTAA agric ngts:
3 Possible scenarios
• Key issue:
• there are positive synergies between FTAA and WTO agr ngts for
the general goal to reform trade in agricultural products
3 possible scenarios:
• WTO Round 2002• Limited progress in WTO ag ngts by 2003
• No WTO Round in 2001-2004
WTO Round 2002 • parallel discussion of Domestic Support in WTO and FTAA ngts:
• if WTO venue would be privileged to discuss DS: need for
ambitious FTAA market access results
• also at stake: whether or not to re-negotiate Art 13 peace clause
• Limited progress in WTO ag ngts by 2003:
• choices on peace clause: expire; extend ?
• might provide additional impetus to complete FTAA ngts in 2004
• FTAA results by 2004 might contribute to WTO discussions
• no progress / impasse in WTO negotiations
• might provide added impetus to FTAA as more viable ag ngt
• no significant FTAA results on DS support would require
ambitious FTAA market access liberalization program
• WTO negotiations produce results by 2003
• consideration on how to incorporate results from WTO
agriculture negotiations in the FTAA
No WTO round in 2001-2004
• No multilateral round in 2001-2004 might provide
both challenges and opportunities for FTAA ngts
• main challenges:
• DS, ES, general subsidies, dispute settlement
issues, export credits, food aid : results not
available for incorporation in FTAA
• possibility:
• despite negative connotation, it may give
impetus to FTAA as most viable way to reform
and liberalize trade in agriculture in
short/medium term
KEY FACTORS INFLUENCING FTAA NGTS:
• U.S. NEGOTIATING AUTHORITY
• CONTEXT OF FARM BILL FOR APPROVAL IN 2002
• IMPORTANCE OF TIMING FOR FTAA NGTS: APR/MAY 2002
• SCOPE OF NEGOTIATING AUTHORITY:
• ISSUES / MANDATE FOR WTO/BILATERAL/FTAA NGTS
• CAPACITY OF COUNTRIES TO IMPLEMENT FTAA AGTM
• WTO ROUND OR WTO SECTORAL NGTS
• MARKET CONDITIONS - OECD FORECAST 2000-04:
• CEREALS: ↑NOMINAL P ↑ LITTLE REAL P ↓STOCKS
•OILSEEDS: ↑PRODUCTION/CONSUMP 5% SUSTAIN P
•MEAT:↑MEAT P BUT UNCERTAINTY DISEASE ISSUE
• HEMISPHERIC AND GLOBAL ECONOMIC CONDITIONS
• FUTURE OF EU CAP: BUDGET LIMITS / ENLARGEMENT
HOW IMPORTANT IS THE FTAA
AS AN AGRICULTURAL TRADE ZONE ?
WHAT IMPORTANCE COULD FTAA
LIBERALIZATION OF AGRICULTURAL TRADE
HAVE ON GLOBAL TRADE IN AGRICULTURE ?
THE FTAA REGION IS AN IMPORTANT AREA OF AGRICULTURAL TRADE
IT HAS APROXIMATELY:
• 30% OF TOTAL WORLD EXPORTS
• 20% “
:
IMPORTS
Regional Shares in World Trade in Agricultural Products, 1999
0%
10%
20%
30%
40%
50%
Western Europe
FTAA
Asia
Exports
Imports
Africa
C./E. Eurpoe/Baltic states/CIS
Middle East
Source: Based on International Trade Statistics 2000 by the World Trade Organization
But most of the FTAA trade agricultural trade at this
time is heavily concentrated on 6 to 8 countries
TABLE# Top10Intra-FTAAAgricultureExporters
TABLE# Top10Intra-FTAAAgricultureImporters
25
20
20
Import Value ($billion)
Export Value ($billion)
25
15
15
10
10
5
5
0
0
USA CAN MEX ARG BRA CHL COL CRI GTM ECU
USA CAN MEX BRA COL
VEN CHL ARG PER GTM
Who are the top importers/exporters and products involved?
There is a wide range of products traded:
Total FTAA agricultural trade has been growing in recent years
GRAPH1.1Intra-FTAAAgriculturalExports
GRAPH2.1Intra-FTAAAgriculturalImports
TotalAgriculturalImportsandTop5Importers
TotalAgriculturalExportsandTop5Exporters
60
60
Total
50
Total
50
40
40
30
30
USA
20
20
USA
CAN
10
10
CAN
MEX
BRA
COL
0
95
96
97
Year
98
99
MEX
ARG
BRA
0
95
96
97
Year
98
99
Intra-RTA Agricultural trade has also been growing:
…and Intra-RTA agricultural trade is the most important but extraRTA also looks active
Probably no significant concerns on FTAA trade diversion should be
in place since protection vis-à-vis third countries is within average
protection and most growth is with FTAA
By RTAs:
RTAs also have an active export trade with the rest of the FTAA
NAFTA remains the main importer from FTAA sources
FTAA TRADE PROTECTION: TRQs
Who has TRQs and on what?
13 countries:
On what products are the TRQs and how many?
How much of the TRQs’ import potential is used?
Only around 60%
Who has the TRQs and how much of the TRQs do they use?
TRADE PROTECTION: APPLIED TARIFFS
Applied tariff protection on the top intra-FTAA imports is high.
On what products have we seen trade disputes?