Representatives from the 151 World Trade Oganization member countries reconvened in Geneva late in July to provide formal response and input to a draft modalities text from WTO agriculture chair Crawford Falconer meant to demonstrate "what is potentially on offer as we move into what could be a serious closing zone for this (Doha) negotiation."
U.S. Wheat Associates met in Geneva with a number of delegations and representatives from the Director General's office and noted a distinct sense of optimism that the defined parameters are within a range that is sufficiently acceptable to bring everyone back to the table for full-scale negotiations. The stalemate is broken and, according to one inside source, "we are close on agriculture."
While the text shows progress since the April challenges paper, we remain concerned that the range of proposed cuts to U.S. domestic support is not drawing reciprocal offers in market access. The tariff cut proposals are much improved but several undefined aspects of the market access discussion could be deal breakers:
- Treatment for Sensitive and Special Products – countries are permitted tariff reduction exemptions for products designated as sensitive (developed countries) or special (developing countries). The proposed percentage of protected tariff lines for special products is still too high. Nor does the draft text provide detail on treatment for special products. This will be critical in determining real market access, especially in developing country markets such as India, which is proposing to designate 98 percent of its agricultural products as special.
- Special Safeguard – The draft text falls short in providing disciplines for the special safeguard and special safeguard mechanism (ssg/ssm) for developing countries, which are designed to protect against import surges. They are triggered automatically and will result in the application of a high tariff band when imports surpass a certain threshold.
- Elimination of Export STEs – The U.S. wheat industry will not truly reap the benefits of a level trade playing field until export state trading enterprises (STEs) are eliminated. The industry wants to see unbracketed language calling for export STE elimination – not a series of disciplines.
Source: U.S. Wheat Associates