By Gustavo Capdevila
GENEVA, Jul 12 2004 (IPS)

The World Trade Organisation (WTO) is gearing up for two weeks of intense negotiations that will be decisive to the fate of the Doha Round of multilateral trade talks, with the question of the industrialised North’s farm subsidies taking centre-stage.

The key to possible success, or to a new failure in the WTO talks on the liberalisation of trade, is a document to be presented next Friday by the chair of the Committee on Agriculture special negotiating session, New Zealand ambassador Tim Groser.

Agriculture remains the most contentious issue in the negotiations launched at the November 2001 ministerial conference in Doha, Qatar.

The ministers of Australia, Brazil, India, the United States and European Union – the ‘Five Interested Parties’ (FIPs) representing the central interests at stake in the talks on agriculture – agreed over the weekend in Paris that the ball is now in Groser’s hands.

The discussions among the FIPs in the French capital, which basically revolved around the issue of agriculture, ended with neither signs of progress nor a rupture, according to the participants.

At least there was no setback, although the participants recognised that difficulties persist, said Argentine negotiator Alfredo Chiaradía.

The Doha process, which is scheduled to conclude by Dec. 31, is still alive, although it continues to depend on a critical end July deadline for reaching agreement on a broad outline for the final stretch of the multilateral trade talks.

Groser’s document could determine the future of the Doha Round, because the last points of the negotiations – such as services, industrial products, and intellectual property – are subordinated in practice to what happens in the talks on agriculture.

WTO Director-General Supachai Panitchpakdi and the chair of the WTO General Council Shotaro Oshima are waiting for Groser’s summary, to incorporate it into the proposal for a framework document on the Doha Round, which the 147 WTO member states are to discuss in the last two weeks of July.

Supachai announced Monday that he had cancelled a trip to Mauritius because only a few days are left before the draft framework agreement must be issued, and the touchy section on agriculture has yet to be drafted.

The head of the WTO had planned to attend the ministerial conference of the Group of 90 (G90) developing nations, made up of the 79-member Africa, Caribbean and Pacific (ACP) bloc, the African Union, and the world’s least developed countries (LDCs), which opens Tuesday.

The G90 gained visibility when it defended the positions of the poorest countries during last September’s failed WTO ministerial conference in Cancun, Mexico.

Supachai said he understood the frustration of many of the G90 ministers with regards to the slow progress of the Doha talks, although he stated that the negotiations had made considerable progress since they were launched.

The former deputy prime minister of Thailand said many key industrial nations have shown considerable flexibility in important aspects of the talks, and added that all WTO members should avoid taking intransigent positions.

By contrast, the U.S.-based Institute for Agriculture and Trade Policy (IATP) warned developing countries of the risks that Groser’s proposal could pose, if it permits the United States to re-classify its domestic support payments to farmers, to allow them to remain in place.

After losing a recent dispute with Brazil over support for U.S. cotton growers, Washington ”is facing real cuts to existing support programmes” that the WTO dispute panel ruled as illegal, said the IATP.

To avoid making such reductions, it added, the United States ”is aggressively pushing” a proposal in the WTO that would place those subsidies in the ”blue box”, making them exempt from the negotiated cuts in domestic supports.

Many countries that cannot compete with subsidised U.S. farm exports have reacted angrily to the modification proposed by Washington, the Minneapolis-based IATP reported.

Nevertheless, said the IATP, Groser accuses those who are opposed to the expansion of the blue box of being ”deal breakers”.

Under the WTO domestic supports regime, subsidies qualifying for the ”green box”, which do not face demands for reduction, must not distort trade, or at most cause minimal distortion.

Policies that are seen as trade-distorting are placed in the ”amber box”, and are subject to reduction, such as the U.S. supports for cotton farmers.

However, if the payments to farmers are accompanied by programmes aimed at limiting production, they can be re-classified in the blue box.

Incorporating trade-distorting subsidies into the blue box could frustrate Groser’s document and the Doha negotiations, said a source close to the G20, the group led by Brazil, India and South Africa.

Excerpt: