IPC Seminar

Multilateral Trade Negotiations:

Update on The Doha Development Round

MARCELO REGUNAGA

Hanoi – October 2005

THE G-20: A NEW MAIN PARTNER FOR AGRICULTURE NEGOTIATIONS

Two years of activities (inauguration in September 2003)

Main partner for Agriculture negotiations: 63% of world farmers from Asia, Africa and Latin America; 51% world population; 20% ag. production; 26 % ag. exports; 17% ag. imports

Bases: Linkage between Agricultural Trade and Development Agricultural Reform can unlock potencial of Agriculture in

the developing world: poverty erradication

Views: Differentiated responsibility of developed countries to

address distortions and adopt reforms in Agriculture Fair and balanced process that ensures inclusiveness and

participation (G20 : cross section of developing members) Doha Round must result in a fairer trading system

THE DOHA MANDATE AND THE FRAMEWORK AGREEMENT

Developing Round: should provide concrete results on agricultural reforms to level the playing field with other sectors

Framework incorporates more that reasonable flexibilities in domestic support and market access

Domestic support: Increased permitted support: blue box; de minimis Reductions in OTDS must be very large too be effective

Market access flexibilities: Water in tariffs Sensitive products, special products Special safeguard

RECENTS DEVELOPMENTS

The G-20 has tabled proposals during 2005 on the three pillars which tend to drive the negotiations forward

Concerns after the Dalian Meeting (lack of progress in relevant issues)

New impetus after the USA October proposal

However, the US and the EU October proposals are not enough to induce substantive reforms

The G-20 also tabled new proposals for the three pillars

G – 20 PROPOSALS : DOMESTIC SUPPORT

To deliver the Doha mandate of substantial reductions in trade

distorting domestic support it is neccesary to count with a

combination of significant cuts, disciplines and monitoring

Structure for reductions in AMS, de minimis and OTDS

Base for the overall reduction on domestic support

Disciplines (review and clarification of green box criteria; elements for discussion: blue box; product-specific capping)

Improving Monitoring and Surveillance Mechanisms, to ensure transparency and compliance with the commitments

G – 20 PROPOSALS : DOMESTIC SUPPORT

OTDS and AMS bands and cuts OTDS Thresholds Cuts AMS Thresholds Cuts

Over 60 US$ billion 80 % Over 25 US$ billion 80 % 10 to 60 75 % 15 to 25 70 % 0 to 10 70 % 0 to 15 60 %

S&D: given the 10 % entitlement in de minimis, special band for

developing countries cuts in OTDS Developing countries without AMS entitlements: exempt of an overall

reduction (exemption in de minimis cuts) De minimis:

Both product and non-product specific reductions to adjust to OTDS cuts

Developing countries with AMS entitlements adjust to OTDS cuts

Exeptions for subsistence poor farmers and countries with no AMS

Cotton: early agreement on effective measures

G – 20 PROPOSALS: EXPORT COMPETITION

Credible date for elimination of export subsidies: no longer than 5 years and with a front-loading of commitments

Proposal on export prohibitions and restrictions

Maintaining the special status of STEs in developing countries

New disciplines on export credits, export credit guarantees and insurance programs and food aid (proposals to be tabled in the next days)

G - 20 PROPOSALS: MARKET ACCESS

Market access:

Developed Bands Cuts Developing Bands Cuts 0 to 20% 45% 0 to 30% 25% 20 to 50% 55% 30 to 80% 30% 50 to 75% 65% 80 to 130% 35% + 75% 75% + 130% 40%

Lineal reductions

No flexibilities in the reduction formulas

Sensitive products: 1% of the products which have tariffs

Base: 6% of consumption

Maximum deviation : 30%; the largest deviation in the formulas more increase in TRQs and reduction in intra-quota tariffs

G - 20 NEW PROPOSALS TO BE TABLED SOON

Tariff escalation

Expansion of TRQs

Special products

Special safeguard

Preferences

Special compensatory measures

Food aid

Export credits

Recently acceded members

MARTKET ACCESS SIMULATIONS(Applied tariffs and % reductions of alternative proposals)

Applied tariffs G20 USAEU with

FlexibilityEU without Flexibility

EU

Corn 73 65 80 50 40

Sun oil 64 45 55 30 20

Beef 85 75 80 50 40

Honey 17 45 55 30 20

Pears 43 55 80 40 30

USA

Process Beef 1.4 45 57 29 21

Pears 0.3 67 67 33 33

Tobacco 11 47 57 33 23

Cookies 5.6 45 55 30 20

JAPAN

Corn 87 0 0 0 0

Soy Oil 21 0 0 0 0

Wine 36 0 0 0 0

Honey 26 55 55 30 2