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August 14, 2008
Top Story
The following story is from the August 14 issue of International
Trade Reporter Current Reports:
Agriculture
WTO Farm Talks Chair Falconer Calls
For New Effort to Conclude Doha Deal
GENEVA--The chairman of the Doha Round negotiations on agriculture called on members of the World Trade Organization Aug. 11 to quickly pick up the pieces and try again to conclude a global farm trade deal, despite acknowledging a continued political divide on the issue which sunk the talks late last month at a ministerial gathering in Geneva.
In a report to WTO members on the outcome of the July 21-29 meeting of trade ministers in Geneva, which focused on the issues of agriculture and non-agricultural market access (NAMA), chairman Crawford Falconer said he believed there was "no alternative to picking ourselves up, dusting ourselves off, and trying again" to conclude a deal.
Falconer warned that WTO members needed to act quickly--"within a matter of weeks"--or risk seeing the Doha talks stagnate for years.
If "we want to fix this in something less than a three-year time horizon (which I hope we want to do), it has to be done in the very near term," he said in his report.
"Sure, there are plenty who would see that as a tall order," Falconer said. "They are right. But it seems self-evident to me that even a small chance of success is sufficient to warrant the effort, given what is at stake."
Falconer's message contrasted with that from U.S. and European Union officials, who have suggested that bringing the Doha talks back to life was a long-term project.
European Trade Commissioner Peter Mandelson said shortly after the Geneva ministerial collapsed that he did not see "any realistic chance" of concluding breakthrough deals in agriculture and NAMA "this year or in the foreseeable future."
A senior U.S. trade official Aug. 6 also sought to downplay prospects for an early resumption of talks, saying that the dust needs to settle before a new path forward could be considered.
Talks 'Cannot be Done Naively.'
Ministers came to Geneva with the goal of concluding breakthrough agreements on agriculture and NAMA at the meeting and keeping alive hopes of wrapping up the Doha Round toward the end of the year. But the meeting collapsed after the United States and India were unable to bridge their differences over a special safeguard mechanism (SSM) for developing countries allowing them to hike tariffs when faced with surging imports of farm goods (25 ITR 1124, 7/31/08).
In particular, Washington and New Delhi could not decide when and to what extent developing countries could impose additional tariffs above the existing maximum rates fixed during the previous Uruguay Round of trade talks.
Falconer said reviving the talks "cannot be done naively. Indeed it has to be done in full awareness of the enormity of the task facing us."
In this regard, the chairman said it was important to recognize that the differences over the SSM mechanism were not an "unexpected minor technical hitch." SSM "was always going to be one of the three or four potential deal-breaker items and so, alas, it proved to be."
"It was a political divide," Falconer said in regard to the differences between the United States and India on the issue. "In fact there was progress made on it politically, and technically, during that week. But it was simply not sufficient to bridge a political divide that had been enduring since at least Hong Kong [the WTO's 2005 ministerial conference].
"So illusion number one to guard against is that it can be resolved essentially technically," he added. "The technicalities will need to be addressed but will only work with the same level of political investment that was evident in many other issues where technical and political are inseparable."
Falconer said that even if the SSM issue were resolved, other difficult issues also loomed where agreement still needs to be reached. The chairman in particular cited the issue of cotton subsidies, where West African cotton producers secured a mandate at the 2005 Hong Kong ministerial calling on WTO members to reduce their trade-distorting support for cotton "more ambitiously" than the general formula for farm subsidy cuts and over a shorter period of time. The main target is the United States, which accounts for a significant portion of cotton subsidies and cotton exports.
Forge Solutions First With Senior Officials
The chairman said cotton, "one of the other three or four potential deal-breakers," was "not at all seriously addressed before things broke down with SSM."
Falconer also cited the issues of new tariff quota creation and tariff simplification where there was "no new basis for resolution" of the two issues.
"(O)ne might well take the view that these can fall into place," the chairman said. "But we also have to actually make that happen."
Falconer said the best way to move the negotiations forward was to concentrate negotiations first at the senior officials level rather than calling in trade ministers for another go.
The "only way we have ever fixed seemingly intractable problems in this House has been through intensive work at senior officials' level: hard grind and no waiting for divine interventions from Olympus," he said.
"If you feel the same way, your Chair will be ready to continue that effort with you over coming weeks," he concluded. "I do not believe we have anything to lose by at least making the effort."
By Daniel Pruzin
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