Description
Although
agricultural production has increased significantly over the decades,
the number of hungry people around the world has grown in recent
years, indicating that the problem is not related to food quantity,
but to ensuring adequate income to the poor who rely on agriculture.
Further, the agricultural production expansion witnessed around
the world came with a heavy cost to the environment, meaning that
the sustainable use of natural resources needs to taken into account.
The
reform of the global agriculture trading system currently being
negotiated in the context of the Doha Round - with the objective
of establishing a "fair and market-oriented trading system"
- will play a major role in this process. Over the last fifteen
years, world agriculture trade has grown almost twice as fast
as production. However, highly subsidised agricultural production
and exports from Organisation for Economic Cooperation and Development
(OECD) countries as well as the anti-competitive behaviour of
trading firms are depressing world prices, thereby affecting development
prospects in the South. Exports from developing countries, of
tropical products in particular, continue to face a variety of
specific challenges, ranging from non-tariff barriers, and technical
barriers to trade (such as sanitary and phytosanitary requirements),
tariff escalation, preference erosion, and price volatility.
The importance of tropical products
for developing countries is undeniable. Their significance has
been recognised in an array of studies, fora and organisations.
As indicated in a document by the Common Fund for Commodities
(2004): "The livelihoods of hundreds of millions of the world's
poorest people in developing countries, and in particularly in
the least developed countries, are heavily dependent on commodities.
Commodities form the backbone of the economies and account for
the bulk of the export earnings of these countries. The development
of commodities is thus vitally important in the global struggle
to alleviate poverty." However, there are no studies estimating
the importance of tropical and other commodities using economic,
social and foreign trade indicators. Nonetheless, the participation
of such products in exports from developing countries is significant:
the fifteen main tropical products account for 37 percent of developing
countries' incoming foreign currency from agricultural exports.
This proportion reaches 62 percent for low income developing countries.
Many
of these products are grown primarily by small farmers in developing
countries - as in the case of coffee, cocoa, tobacco and cotton.
Others are vital in the generation of rural employment (i.e. sugar,
rubber and rice). Therefore, besides their considerable contribution
to foreign currency generation, they also play an important role
from a social point of view.
There
is still no agreed definition as to which agricultural commodities
should be considered as tropical and diversification products
in the agricultural negotiations at the World Trade Organization
(WTO). In addition, WTO Members still have to agree on the way
in which the long-standing commitment to achieve the fullest liberalisation
of trade in tropical agricultural products contained in the July
31, 2004 Framework Agreement will be worked out.
There
have been persistent differences between WTO Members, more specifically
a group of Latin American (LA) countries and the African, Caribbean
and Pacific (ACP) countries, on how to liberalise trade in tropical
products while also addressing the effects of trade preference
erosion. The two mandates have neatly placed them in opposing
camps: while some want developed countries to remove all tariffs
and quotas on 'tropical products' such as sugar and bananas, others
have long benefited from trade preferences for these very commodities,
and thus stand to lose from across-the-board liberalisation. While
the preference beneficiaries would like rich countries to be able
to separate these products for lower tariff cuts, thus preserving
more of their margin of preference, the others would like to prohibit
the same products from being designated as 'sensitive.'
In
this context, the objective of the dialogue was to determine a
better sense of how the WTO agricultural negotiations on tropical
products can increase benefits for developing country exporters
of these products and identify elements of a pro-poor, pro-sustainable
development agenda for tropical commodities. It addressed issues
of interest to all developing country exporters of tropical products,
in Latin America, Asia and Africa.
More particularly, the dialogue addressed
challenges ranging from tariffs, tariff escalation, preference
erosion and possible trade adjustments, non-tariff barriers, sanitary
and phytosanitary requirements, sensitive products and domestic
support. The dialogue will also address other imperatives of a
global strategy for sustainable development in agricultural trade.
This included supply chain, value chain, bio-fuels and the environment.
