Adhoc Expert Group Meeting Agriculture Tunis, November 2004

1
Ad-hoc Expert Group Meeting Agriculture Tunis,
November 2004
United Nations Conference on Trade and Development

• Ralf Peters
• Division on International Trade
• in Goods and Services, and Commodities
• UNCTAD, Geneva

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The July Framework on AgricultureWatch Points

• The July package was achieved by pulling a
  compromise from all corners...
• Contentious issues, such as the reduction targets
  and formula, are left for further negotiations
• This presentation focuses on the watch points
  for developing countries in the coming
  negotiations, based on
• Our own analysis
• Interviews conducted with developing-country
  negotiators
• Findings from International Workshop on Policies
  against Hunger III Liberalization of
  Agricultural Trade Solution?, (20-22 October
  2004, Berlin)
• http//www.policies-against-hunger.de

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• Offensive interest
• To clear the backlog of agricultural
  liberalization by developed countries in
• Market Access, Domestic Support and Export
  Competition

• Overall Objective
• Make the WTO agricultural reform complementary
  to
• Poverty alleviation and rural development
• Food security
• Efficiency in the domestic market
• Competitiveness in the world market

• Defensive interest
• Interim To protect domestic producers from
  unfair competition
• Mid/long term To ensure that developing
  countries will have enough policy space when
  selecting appropriate measures to meet their goals

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Market Access

• Tariff cut formula
• A tiered formula (tariff bands) with a single
  approach
• Progressivity Deeper cuts in higher tariffs
• Sensitive Products
• A selected number of tariff lines will receive a
  flexibility in tariff cuts, provided that access
  is improved for all products
• To be negotiated
• Number of tariff bands and thresholds
• Formula for each tariff band
• Potential use of tariff capping
• Ways to address tariff escalation
• Tariff simplification
• Cuts in in-quota tariffs and TRQ administration
• Whether to eliminate SSG
• Fullest liberalization of all tropical products
  and products for diversification from growing
  illicit narcotic crops

• SD for developing countries
• Proportionality in tariff cuts, lesser tariff
  reduction or TRQ expansion commitments
• Longer implementation periods
• Special Products (SP)
• Products essential to achieve food security,
  livelihood security and rural development
• Flexible treatment, to be negotiated
• Special Safeguard Measures (SSM)
• Details to be negotiated
• Preferences
• Importance of long-standing preferences is
  recognised
• Details to be negotiated
• Reference to Harbinson text is made
• Least-developed countries
• Full access to all SDT provisions
• No reduction commitments

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Market Access
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Market Access
7
Developed countries bound and applied tariff
rates
Two ouliers over 200 have been deleted
Olive oil, refined
Sugar, raw
Tariffs in per cent
Tea
Number of tariff lines
8
Developed countries bound and applied tariff
rates
Different scale
Starches Oilseeds Rice
Tariffs in per cent
Number of tariff lines
9
Developed countries bound and applied tariff
rates
Three ouliers over 150 have been Deleted (all
tobacco)
Different scale
Oilseeds Sugar
Tariffs in per cent
Number of tariff lines
Three ouliers over 150 have been deleted
10
Developing countries bound and applied tariff
rates
Bound at ceiling level
Tariffs in per cent
Lower applied rates
Number of tariff lines
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Developing countries bound and applied rates
Three ouliers over 150 have been deleted
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Tariff Bands Tariff Structure
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Tariff Bands Tariff Structure
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Preferences EU Market - ACP exports
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Value change
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Domestic Support

• Overall Reduction Target
• Overall cut AMS cuts, de minimis cuts and Blue
  Box capping
• 20 cut in the first year of the implementation
• AMS cuts
• Capping of product-specific AMS some of them
  reduced
• Greater cuts by countries using higher levels of
  AMS
• De minimis cuts
• By all countries (except LDCs)
• Blue Box
• Modified to include direct payments unrelated to
  current production
• Capping at 5 of the agricultural production
  value
• Revision of the definition and criteria
• Green Box
• Revision of the criteria

• SD for developing countries
• Lower rate of reductions
• Longer implementation periods
• Continued access to Article 6.2.
• Exemption from de minimis cuts if almost all
  support is for subsistence and resource-poor
  farmers

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Domestic Support
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AMS Commitments and Utilization
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Blue Box Utilization

• Blue Box
• EU, Iceland, Norway, Japan, Slovak Republic,
  Slovenia, US
• Support Per cent of total
• agric. Production
• EU 20 bill. Euro 8
• US 7 bill. US 4

USD policy changed
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Export Competition

• Elimination formula
• Parallel elimination of
• export subsidies
• trade-distorting element of export credits,
• certain activities by STEs
• bilateral food aid
• Elimination by annual installments, taking into
  account coherence with internal reform steps of
  members
• Disciplines on export prohibitions and export
  restrictions (to be negotiated)

• SD for developing countries
• Longer implementation period
• Article 9.4 - for a reasonable period to be
  negotiated after all forms of export subsidies
  are eliminated
• Provisions for LDCs and NFIDCs concerning
  disciplines on export credits
• STEs in DCs acting for domestic consumer price
  stability and food security receive special
  consideration to keep monopoly

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Export Competition
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Who Uses scheduled Export Subsidies?
Annual Average US 6.2 billion
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WTO Negotiations on AgricultureWay Forward

• Negotiations will focus on technical elements
  until the mid-term stocktaking to be held in
  March 2005
• May start drafting the texts pillar by pillar
• Inputs of country-specific needs and concerns,
  e.g. in selecting SP products, formula, are
  awaited

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Market Access Current Tariffs
Source UNCTAD TRAINS, WTO

• Specific Problems
• Tariff escalation
• Tariff peaks

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Selected Developing CountriesCut in bound
tariff rates
Greater cuts than Harbinson
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Selected Developing Countries Cuts in applied
rates
Minimal cuts in applied rates
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Preference ErosionQuota rents before and after
liberalization in selected SSA countries

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Market Access Tariff Escalation
United States bound and applied MFN tariff rates
on cotton products
EU most favoured nation, out-of-quota bound
tariff rates
Degree of processing
Source UNCTAD TRAINS, AMAD, WTO
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SUPPORT TO PRODUCERS of the total farm receipt
Source OCDE, Politiques agricoles des pays de
lOCDE, 2001
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AMS

• Final bound AMS of OECD countries for the year
  2000 US158 billion

97 OCDE
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Export Subsidies by Commodity Group
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Draft Agreement Domestic Support (Amber box)
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Draft Agreement Domestic Support (Blue box)
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Draft Agreement Domestic Support (Green box)
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Draft Agreement Domestic Support (SDT)
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Draft Agreement Export Subsidies
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Draft Agreement Market Access (Formula)
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Draft Agreement Market Access (Others and SD)
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Draft Agreement LDCs and Recently Acceded
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Draft Agreement Cotton Initiative
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Developing countries applied rates
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Complex Tariff Structures

• Example for a compound tariffs
• European UnionLive bovine animals, domestic
  species, steers (bullocks) of a weight exceeding
  220 kg (HS 01029020)10.2 per cent 931
  Euro/Tonnes

Specific tariff
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Convert 10.2 per cent 931 Euro/Tonnes into
its ad valorem equivalent (AVE)

• General formula
• Import Unit Value in 1999 1.281 Euro / Kg

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Sensitive Products