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TRADE: Doha Talks Sweating Over Tropical Products

Gustavo Capdevila

GENEVA, May 12 2008 (IPS) - The hot potato these days in the Doha Round of World Trade Organisation (WTO) negotiations is tropical products, a burning issue for the world’s poorest countries.

Developing countries’ demands for more ambitious liberalisation for tropical foods than for other agricultural produce is justified, argued a Latin American negotiator who asked to remain anonymous.

The WTO committee on agriculture is also discussing the erosion of trade preferences, an issue closely linked to tropical products. Lowering or eliminating tariff barriers has the effect of diminishing the relative benefits enjoyed by countries which formerly had special trading privileges.

Bananas are a case in point, a tropical product symbolising the trade liberalisation demands of many Latin American countries.

But the probable opening up of export markets for Latin American bananas threatens to erode the preferences awarded to the former colonies in Africa, the Caribbean and the Pacific (ACP), which also produce bananas and currently enjoy favourable tariff treatment in the European market. The ACP nations are demanding compensation for their future losses.

The European Union, which has been caught up in a trade conflict for decades with Latin American countries over preferential trade in bananas, is a major player in both the tropical products negotiations and those on preference erosion.

The overlap between the two topics under negotiation is hindering the consideration of lists of products. Many of the agricultural commodities affected by preference erosion are also tropical products, the source at the talks said.

Crawford Falconer, the New Zealand negotiator who chairs the committee on agriculture, said in February that the issue of freeing up trade in tropical products should take precedence over discussion of preference erosion, the source pointed out.

Countries with interests in both questions will discuss formulas this week for accommodating the overlapping product lists. They will also have to decide on the hierarchy between the two issues.

With agreement on these two items pending, Falconer said that he would nevertheless proceed with drafting a revised negotiating text, including conditions for the final phase of the farm product negotiations, which are at the core of the entire Doha Round.

Falconer hopes to circulate this text to the representatives of the 150 member countries of the WTO by this weekend, or early next week. The document will “simply reflect where members are at this particular point in time,” Falconer told the diplomats.

After a sufficient time for the parties to evaluate the conclusions of his draft, Falconer will reconvene the negotiating group to hear their reactions.

Clodoaldo Hugueney, Brazil’s ambassador to the WTO, told IPS that an appropriate period of reflection for the delegates would be one week.

The timetable of sessions is not a superficial question for many delegates and members of the WTO secretariat, who are running a race against time to conclude the Doha Round by the end of this year.

Further delays in the Doha Round, which was launched in November 2001 in the capital of Qatar, might mean that negotiations could be bogged down indefinitely, because of the forthcoming changes of government in key countries, such as the United States and India.

Other countries, however, want the negotiations to be driven by content rather than the calendar. Egypt’s representative asked whether the original intention of the Doha Round, to let “the substance” determine the pace of negotiations, has been taken over by the urge to meet deadlines.

The issues on which agreement is pending, in agriculture alone, are fundamental and varied. Falconer admitted that there is still no consensus on a basic issue, that of sensitive products, for which industrialised countries want to maintain higher tariffs in order to protect less efficient local producers.

To compensate, those importing countries would accept the entry of a quota of sensitive products at lower tariffs.

To discuss the volumes of such quotas, negotiators have called for reliable data on the consumption of potentially sensitive products.

A group of member states made up of Australia, Brazil, the European Union, Japan and the United States came up with a method for calculating estimates of consumption levels.

But their method was not unanimously accepted. Argentina argued that the method was not an adequate basis for determining consumption, and resisted its adoption, the source said. Other countries raised objections to the methodology that would be applied to individual products.

Trade sources acknowledged that the issue is a complex one because very detailed figures on consumption are required. In the case of beef, for example, it is necessary to have information about demand for the finest cuts.

In addition, when negotiations reach this stage, questions arise about how reliable and verifiable the data are, said the source, who predicted that it will be an arduous debate.