Negotiators Struggle With WTO Framework - Pressure to Reach Agreement Falls on Fears of Doha Round Collapse
July 26, 2004
By Jerry Hagstrom, Special to Agweek

WASHINGTON - The World Trade Organization in Geneva released a "framework" for agriculture negotiations in the Doha Development Round July 16, but the National Cotton Council has declared it "unacceptable" while European Union officials have said they consider, "a step forward."

WTO officials and negotiators including Allen Johnson, the chief U.S. agriculture negotiator, are meeting in Geneva, with a deadline of July 30 to decide whether an agreement on the subjects for negotiation can be reached. If the negotiators decide on the "framework" for negotiations - for example, how to reduce tariffs or domestic subsidies - then they will meet again next year to try to achieve those goals. Trade negotiators including U.S. Trade Representative Bob Zoellick have been struggling since 2001 to come up with an agreement on agriculture that both developed countries such as the United States, the European Union and developing countries including Brazil, China, India and small poor countries, can accept.

Subsidy, tariff reductions

The agriculture section of the proposal calls for substantial reductions in domestic subsidies and tariffs that reduce market access. It does not provide a formula for tariff reductions but says products should be grouped under a "tiered formula," which would reduce tariffs for some products more than others and allow countries to protect products they consider "sensitive" such as rice and sugar.

It says the export subsidies used by the European Union to sell their expensive agricultural products overseas would be eliminated on a schedule, but that the agricultural export credit guarantees used by the United States would be restricted to a repayment period of 180 days or less and that certain practices of state trading enterprises such as the Canadian Wheat Board such as "direct and indirect subsidies and the underwriting of losses" also would be eliminated while "the issue of future use of monopoly powers will be subject to further negotiation. The proposal also would eliminate certain types of U.S. food aid donations and require countries that want to buy food for poor countries to spend cash on the world markets.

The proposal allows for expansion of the so-called blue box of partially distorting subsidies such as the countercyclical payments in the 2002 farm bill but says, "By the end of the implementation period to be agreed, blue box support will not exceed an agreed percentage of the average total value of agricultural production during an historical period." It also says there should be a "review" of what programs should be allowed in the so-called green box of nontrade-distorting subsidies, a category that includes U.S. conservation payments, agricultural research and food stamps. The draft says that so-called "tropical products" should achieve "the fullest liberalization," particularly if such an initiative can discourage the growing of narcotic crops. There is no legal definition of tropical crops, but in general, they are coffee, coca, fruits such as papayas, mangoes and pineapple. Sugar is not included since it is produced from both cane and beets, which are grown in northern climates.

'Unacceptable' for cotton

The draft says that cotton should be treated within the agriculture negotiations, but also mentions cotton in other areas of the proposal, a factor that has enraged U.S. cotton growers. West African countries and Brazil have said they want the Doha Round to provide a better deal for cotton producers in developing countries. Brazil recently won a WTO case that concluded Brazilian farmers had been seriously injured by U.S. cotton subsidies. Zoellick had said on several occasions, however, that the cotton issue should be handled with the rest of agriculture in the framework text.

National Cotton Council Chairman Woody Anderson, a Texas farmer, said in a news release from the NCC headquarters in Memphis the draft WTO framework document "contains many pitfalls for U.S. agriculture. From a cotton perspective, the draft is unacceptable."

The NCC was the first U.S. agriculture group to issue a detailed reaction to the framework text. "In many ways, the Doha Round is moving backward for U.S. agriculture," Anderson said. "This most recent draft document is vague and general in too many respects, except in its references to U.S. programs that are being targeted by other countries. It is too much of a one-way document that may be the final gasp of the Doha Round if it is not significantly changed. The document unfairly and unnecessarily singles out the cotton program and opens up U.S. cotton to unequal treatment and unreasonable expectations. There are no less than four specific references to cotton and at least two other indirect references. No other agricultural commodity is singled out even once in the entire document," Anderson said.

"It is stunning to us that the General Council of the WTO would issue such a draft and would continue to provide credence to the attempt to single out one U.S. agricultural commodity program for destruction," Anderson said. "The target drawn on U.S. cotton will only be the first domino for U.S. agriculture if this approach is allowed to continue. The Doha Round agricultural negotiations have degenerated into a blame game, with almost every paragraph laced with efforts to punish the U.S. and exempt countries like Brazil, India and China from real changes, real increases in market access and real reforms."

David Salmonsen, an American Farm Bureau Federation lobbyist, said the proposal is "very general. There are no figures." Salmonsen noted that tariffs would be released from bound levels - the highest allowable under current law - rather than the currently applied tariffs, which, he said, means that "in order to get significant market access, you have to have significant cuts in those rates."

EU approves

Gregor Keruezhuber, a spokesman for EU Agriculture Commissioner Franz Fishle, added, "Our feeling is that the text goes in the right direction. It is definitely a step forward, not a step back, which is not always obvious in these delicate negotiations." The Indian Ministry of Commerce and Industry issued a news release that India found the draft framework for negotiations "disappointing in respect of agriculture as it does not provide the required balance between the provisions for the developed countries and those meant for developing countries." But the ministry also said, "Overall, India feels that the dialogue after the stalled Cancun meeting thus far has been constructive, but the shape of the agreed package is as yet not visible."

Oxfam International, which has helped Brazil with the cotton case and considers itself an advocate for farmers in the developing countries, said the draft text did not contain "enough development" and that Oxfam was "disappointed" it did not call for the complete elimination of trade-distorting cotton subsidies.

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