AG TALKS SET TO PICK UP AS NEGOTIATORS AWAIT FALCONER'S 'HARD-TALK' QUESTIONS

The deadlocked WTO negotiations on agriculture appear set to pick up once again, even though governments have done little to narrow their differences on cutting farm tariffs and subsidies. One trade diplomat described this as the "last week of peace": the chair of the negotiations will next week present delegations with a list of 'hard-talk' questions about where they stand, and subsequently use their answers to draft a new text for further discussion.

Members would "have to show their cards" in response to the questions, the delegate said, "or else someone will have to arbitrate their cards for them, probably [agriculture chair and New Zealand Ambassador Crawford] Falconer."

Falconer indicated at a 13 April meeting of the agriculture negotiating committee that he would circulate his questions during the week starting 23 April, and would use it to update the draft 'modalities' text he prepared last June during the last big push for an agreement. That document encompassed virtually every proposal that Members had made in the negotiations, pointing to hundreds of unresolved differences covering all negotiating areas.

One official said that Falconer's new draft text would "definitely include numbers" for the depth of subsidy and tariff cuts, possibly a relatively narrow range.

It is not clear when the new document might be ready.

G-33 indicators discussed

Delegates at the recent meeting discussed flexible treatment for developing countries in the negotiations on agricultural market access.

In particular, they considered the G-33 group's newly trimmed-down list of indicators to guide the selection of the 'special products' that developing countries will be allowed to designate for lower tariff cuts for food and livelihood security and rural development concerns (see BRIDGES Weekly, 28 March 2007). The indicators include, for instance, a product's share in the total value of agricultural production or household agricultural income. Another indicator looked at products' importance to vulnerable sections of the population.

Indonesia, speaking on behalf of the G-33, described the substantial reduction in the number of indicators as a unilateral concession to countries uneasy about the extent to which the bloc wished to shield products from liberalisation.

Nevertheless, farm exporters such as Australia, Thailand, and the US said that even the smaller number of indicators failed to assuage their fears about diminished market access opportunities, including South-South trade. Thailand said that indicators were needed to reflect the livelihood needs of farmers producing for export.

One negotiator reported that the US broached the notion of having developing countries create tariff-rate quotas for special products, as a means of assuring exporters of a certain amount of new market access. Many delegations reportedly said that the idea was not helpful.

Members did not discuss a new informal paper from Pakistan that attempted to bridge the gaps between the G-33 and the exporters (see related story, this issue). Although Pakistan belongs to the G-33, the paper departed substantially from the group's past positions: in addition to more restrictive rules for indicators, it proposed criteria for disqualifying products crucial to developing country exporters from eligibility for lower tariff cuts (even if they were otherwise important to a Member's food and livelihood security concerns). The Pakistani delegation had asked to push back discussion on the proposal since it was preparing for the Cairns Group meeting in Lahore.

Support for the G-33's new list came from two other developing country groups - the small and vulnerable economies (SVEs) and the African, Caribbean, and Pacific (ACP) countries - although most of their members also belong to the G-33.

The SVE group presented a proposal of its own, in which they asked for lower levels of tariff reduction than that agreed to for other developing countries. They also wanted their own special products to be entirely exempt from tariff reduction or tariff quota commitments. In the paper, the members of this group, which include the Dominican Republic, Barbados, Cuba, Fiji, Honduras, Mauritius, and Mongolia, stressed that they were particularly reliant on tariffs to maintain food and livelihood security, and that their agricultural sectors were limited to a handful of commodities.

During the meeting, few delegations responded, but the EU did raise questions about the 'accumulation' of various kinds of flexible treatment.

The EU, Japan, and the US referred to last week's meetings in New Delhi where their ministers, along with their Indian counterpart, vowed to conclude the Doha Round negotiations by the end of 2007.

Negotiators are now looking ahead to Falconer's questions. One negotiator said that renewed focus on the multilateral-level talks in the negotiating committee had gone some way to soothe the jitters of delegations that had been uncomfortable with the focus on discussions among major trading nations outside the WTO. In any event, Falconer pointed out that the deadlock was far more a "problem of engagement" than one related to the multilateral process.

The next meeting of the agriculture committee is expected early next week.

ICTSD reporting.