TRADE: Agriculture to Feel Impact of WTO’s Doha Declaration

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Nov 17 2001 (IPS) - The new guidelines established at the Ministerial Conference in Qatar this week for negotiating the liberalisation of agricultural commerce will shape the debate at the World Trade Organisation (WTO) meeting to be held here the first week of December.

The WTO Agriculture Committee is slated to meet Dec 3-7 to continue the negotiations begun in January 2000 on reforming the agreement that regulates global farm trade.

Until now, the talks had followed the framework established in Article 20 of the Agreement on Agriculture (AoA), which proposes the long-term objective of a substantial and progressive reduction of state protection for the farming sector.

The subsidies for the production and export of agricultural goods, which play an important role in most industrialised countries, are at the core of the agricultural trade problem.

But since the conclusion of the Doha ministerial conference Wednesday the negotiating climate has changed, because the final declaration signed in the Qatar capital incorporates more ambitious goals than those laid out in the AoA’s Article 20.

The new objectives agreed in Doha by the more than 140 trade ministers gathered for the WTO conference consecrate what have been dubbed the “three pillars” of the talks on agriculture.

The ministers committed themselves to achieving substantial improvements in market access, the reduction of all forms of farm export subsidies – with an eye to phasing them out -, and cutbacks on market-distorting government aid to the agricultural sector.

The Cairns Group, made up of 18 countries that promote international free trade in farm products, lobbied hard for the incorporation of the three pillars into the ministerial declaration.

The Cairns members point out that export subsidies for agricultural commodities have increased since the AoA was approved at the conclusion of the Uruguay Round of multilateral trade talks (1986-1994).

A World Bank report indicates export subsidies for wheat in 1998 represented 25 percent of trade in that grain, marking a seven-percent hike compared to the 1995 figure.

In the same period, subsidies for sugar grew from 19 percent to 31 percent, according to the World Bank study.

The European Union (EU), which maintains a costly system of agricultural support – through import restrictions, export subsidies, and direct aid -, pressed for modifications of the WTO text in Doha that included the aspirations of the Cairns Group.

In a last-minute proposal, the Europeans were able to push through a compromise, so that the talks on these three areas would be established “without prejudging the outcome of the negotiations.”

The EU’s farm commissioner, Franz Fischler, celebrated the inclusion of the phrase in the final declaration signed by the trade ministers in Doha as a major victory.

But the members of the Group of Cairns maintain that the addition of the phrase would have little effect, because reference to the outcome lays conditions for reforms, not the objectives.

William Ehlers, a trade negotiator for Uruguay, one of the 18 Cairns nations, said his bloc had got what it wanted in Doha.

Roberto Lavagna, representing Argentina, another Cairns member, said that negotiators often turn to “cosmetic measures” that allow them to present results in a more favourable light to the interested parties.

The Cairns Group’s position is that the addition of the EU’s phrase does not represent a profound change to the text, said Lavagna.

The Cairns negotiators conceded that the EU was able to include the matter of non-trade agricultural concerns in the ministerial declaration, but that the related text lacks the force of the three pillars this bloc defends.

The EU’s Fischler, however, stressed that the text clearly outlines the non-trade concerns, which refer to several aspects of the farming sector, such as protections for the rural landscape, environment and employment, and that they continue to deserve state support.