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American Shipper

WTO agriculture discussions reignited

The U.S. proposal, one of five, calls for widespread tariff reduction and greater market access.

   World Trade Organization agriculture discussions have moved into a substantive discussion phase, as members discussed five new proposals during a special session Monday of the WTO Informal Committee on Agriculture, including one from the United States that calls for reciprocal tariff reductions, according to a Geneva trade official.
   Members considered proposals submitted by the United States, joint submissions by China/India and Paraguay/Uruguay, as well as proposals from the intercountry agricultural trade affiliations of the G33 and the Cairns Group.
   The U.S. market access proposal called for “serious negotiations” to unlock an ongoing stalemate in agriculture talks and examines “six areas of the tariff regime” with a view of accomplishing “reciprocal” tariff reductions, the Geneva official said.
   U.S. agriculture has been a main target of several countries’ retaliation against U.S. Section 232 duties on steel and aluminum, as well as China’s retaliation against U.S. Section 301 tariffs.
   The United States “argued strongly” for further tariff reduction and more open markets and highlighted the following six areas to further analyze how WTO members implement tariff regimes: the gap between bound versus applied tariffs; complex tariffs (such as mixed tariffs); tariff peaks; tariff-rate quotas; agricultural safeguards; and regional/preferential free trade agreements, the Geneva official said.
   The U.S. said the exercise would help members understand various tariff regimes’ impact on global agricultural trade, invited other members to put forward their own such analyses and requested the WTO secretariat to compile the most recent available tariff and trade data, asking members to “ensure timely notifications,” the official said.
   But China and other members said more time is needed to carefully examine the U.S. paper, as it was just introduced on Sunday and “caught many members by surprise,” the official said.
   The five different proposals by various WTO members are “heavily charged with technical details” and analysis on market access and trade-distorting domestic support, the source said.
   Members “actively responded” to the call by committee Chair John Ronald Dipchandra Ford of Guyana to discuss domestic support, cotton, market access, export competition, export prohibitions and export restrictions.
   The Geneva official said China’s and India’s joint paper outlined four incremental steps for developed members to eliminate “unfair” agricultural subsidies — entitlements beyond de minimis limits known as the aggregate measurement of support (AMS) in WTO parlance.
   But the U.S., EU, Canada and Australia “were not impressed” by that proposal, saying it didn’t include anything new compared to China’s and India’s position before the WTO’s Eleventh Ministerial Conference (MC11) in December, according to the official.
   The United States, EU, Canada and Australia said it is unrealistic to suggest “only a small set of countries” make contributions to reducing agricultural support, the official said.
   Generally, countries are expected to abide by de minimis limits for agricultural price supports, which is capped at 5 percent of agricultural production for developed countries.
   The 32 WTO members that had larger subsidies than the de minimis levels at the beginning of the post-Uruguay Round (1994) reform period, including the U.S., Canada and EU, committed to reduce those amounts to de minimis levels. Twenty-eight developed countries currently enjoy the right to provide AMS support to their farmers, the Geneva official said.
   The AMS combines all supports for specified products and supports not dedicated for specific products into one single figure. Previous WTO agriculture negotiations have also touched on whether limits should be set for specific products instead of continuing with single overall limits, according to WTO’s website.
   The G33 Group said it was “keen on reinvigorating the negotiation” on WTO agriculture matters, but asked members to address the imbalance and inequities inherited from the Uruguay Round, such as developed countries enjoying “favorable conditions” in domestic support, such as AMS, while developing countries “cannot effectively safeguard the interests of small-scale farmers from periodic import surge and almost permanent market distortions in global agriculture trade.”
   China and India welcomed the proposal by the G33, which said it seeks a permanent solution on safeguards with development and special and differential treatment at the heart of concerns, the Geneva official said.
   But “heated discussions” took place at the meeting, where a total of 37 members, including the U.S., took the floor to make interventions, the official said.
   The United States pointed to evidence showing its AMS has decreased over the past few years, and said the domestic support of other major economies — hinting at China and India — “increased sharply,” the Geneva official said.
   The U.S. asked members to change pre-MC11 positions and not negotiate for “the sake of negotiation,” the official noted.
   To “intensify” negotiations, the committee’s tentative plan is to hold a special session on agriculture every month after the WTO’s August break, the Geneva official said.
   “There is commitment by all members to achieve the agriculture reforms,” the chair said after the meeting, according to the Geneva official.
   WTO members also increased calls for neutral and factual analysis and for “more diversified formats” such as workshops and seminars to complement formal negotiations, but significant differences remain between members on issues including linkage of topics, sequencing and level of contributions, the Geneva source cited the chair as saying.

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