What needs to be done to make Doha a Development Round? ATDN - Meeting, 30.3.2006, Berlin Marita Wiggerthale Deutschland.

What needs to be done to make Doha a Development Round?

ATDN - Meeting, 30.3.2006, Berlin

Marita

Wiggerthale

Deutschland

Balance the Imbalances! Agreement on Agriculture („Special treatment for Developed Countries“)

safeguard Measures for Developed Countries (SSG Art. 5/AoA): 6072 Tariff Lines

peace Clause till the end of 2003 creation of the Blue Box reference period 1986-88 = favourable for DedCs

Little special treatment for Developing Countries only 21 DCs do have access to SSG, no LDC Art.6.2: low income and resource poor farmers longer implementation periods and lower reduction commitments

General imbalance: Support measures of DedCs continue to be allowed, those used by DCs have to be reduced

Deutschland

The „funneld process“ of integration of development concerns into the AoA

Deutschland

The neglected actor: the European Food Industry Not threatening the export competition

no early end date, no effective front-loading, no volume cuts advocating the parallelism approach (success of Coceral, the association of grain

traders) i.e. elimination of unfair practices threatening the export competition Not threatening import competition

making sure that the EU market is opened according to the progress in the internal reform process of the different CMOs (i.e. drawing internal prices down close to world market prices) flexibility!

Increasing the export potential by opening up markets especially for processed food tariff reduction formula ensuring improved MA for PAPs few exemptions (only a few SPs, no total exemption from tariff reduction

commitments etc.)

Deutschland

Threat: weak safeguard measures I

Challenge 1: inclusion of special products (SP) and special safeguard mechanism (SSM) should not be used as a justification to demand higher tariff reduction commitments from DCs

Challenge 2: make sure that the formula eventually agreed to does not undermine the concepts of SP and SSM

Challenge 3: the treatment of SPs should not be linked to sensitive products

Challenge 4: designation of SPs and SSM for products of export interest to DedCs

Challenge 5: simple, transparent and effective rules for SP and SSM

Deutschland

Threat: weak safeguard measures II Successfully defended elements of safeguards:

self-designation of SPs SSM based on price and volume trigger

Concessions already being made: not all SPs totally exempted from tariff (50-65%), rest 5-10% SSM: no use of quantitative restrictions

To be negotiated and defended: SSM SSM availability for all agricultural products incl. SPs and processed agricultural

products (PAPs) simple and transparent SSM trigger levels allowing for effective remedy action no requirement for proof of injury

Deutschland

Threat: weak safeguard measures III To be negotiated and defended: SPs

stand-alone category of SPs appropriate number of tariff lines (defence of 20%) total exclusion of many SPs from reduction commitments Inclusion of substitutes and PAPs in SP concept automatic eligibility of products benefiting from product-specific support for SP

Needed implementation inside and respect outside the WTO: inscription of modalities in DC’s schedules (e.g. lobby power of global player in

food sector, bilateral pressure from WTO mbs with strong ag-export interest) IMF/World Bank policies regional free trade agreements

Deutschland

Threat: harsh tariff reductions for DCs (Basis: 60 DCs, Reduction in applied tariffs in X DCs)

Deutschland

Poultry Sugar Sorghum Oilseeds

US-formula 28 24 20 18

EU-formula 23 20 17 16

Veg. Oils Wheat Rice Corn

US-formla 20 12 25 20

EU-formula 13 11 17 16

Threat: continuation of dumping

Deutschland

EU proposal for EU: 70%US proposal for US: 60%

EU (bn €) USA (bn $)

End-AMS (UR) 67,2 19,1

AMS after reduction70% EU, 60 %US

20,2 7,6

EU: Estimation post 2003US: Notification 01/02

16,3 14,4

Required change + 3,9 - 6,8

Scope of Dumping in EU and US

Deutschland

Threat: late elimination of most export subsidies Around 40% „water“ between bound and applied export subsidies, but little water in

allowed volume levels Attention: processed products do not have a volume limit! UR round: reduction in value and volumes Effective front-loading in first half of implementation period would require:

inclusion of processed products (Non-Annex I - products) volume cuts and/or substantial value cuts esp. in dairy and sugar

Interest of food industry: no volume cuts, late total expiry of most of export subsidies

EU-Council decision (Hong Kong, 13-18 December 2005): phasing out of export subsidies should be fully in line with agreed CAP reforms. text should not interfere with the EU's preference that export subsidy elimination

should be expressed in value terms

Deutschland

Threat: tariff escalation not addressed The weighted average approach

(conversion formula) leads to higher AVEs for commodities than for PAPs i.e. deeper cuts in EU tariffs for commodities than for PAPs

No specific coefficient to address tariff escalation (see Harbinson)

Food industry: Tariffs for processed products should continue to be calculated on the basis of content (e.g. the higher the proportion of sugar, the higher the tariff)

Deutschland

Threat: increasing buying power of retailers I Top 30 supermarkets control around 33% of world wide food sales

market power puts retailers in a dominant position in price negotiations and in definition of quality producer standards and conditions and timing of delivery

Liberalisation in distribution services... stops DCs from moderating the emergence of retail driven supply chains seriously restricts regulations aimed at enhancing the capacity and

power of small farmers to supply retailers on favourable terms Few DCs have introduced regulations to ensure a more equitable

relationship between producers and distribution companies (e.g. Malaysia: ban of new hypermarkets in certain areas till 2009)

Demand of Eurocommerce on distribution services: Liberalisation in GATS/Mode 3 in China, India, Japan, USA, Malaysia, Mexico, Brazil, Australia

Deutschland

Threat: increasing buying power of retailers II Current state of GATS negotiations on distribution services:

EU bilateral request to 36 DCs (a.o. China, India, Malaysia, Mexico, Brazil, Bolivia, Ecuador, Philippines, Indonesia, South Africa)

EU bilateral request to 16 DCs (to consider making commitments) collective request by EC, Chile, Japan, Korea, Mexico, Singapur, Taiwan and

USA: covering all sub-sectors (commission agents’ services, wholesale trade services, retailing services and franchising) and all modes

Likely consequence: rapid expansion of supermarket driven supply chains regulations that would require, for example, retail companies to purchase at

least part of their supplies from small producers and assist them to meet higher standards, could be challenged through WTO dispute settlement process

Deutschland

WTO - a recipe for disaster or development? Agriculture: much left still open for negotiation, see threats NAMA: removal of flexibility and needed policy space for industrial

development unprecedented: line-by-line tariff cuts, previous rounds: average cuts unprecedented: DedCs ask DCs to make stronger tariff cuts (violation of

principle of LTFR, necessary: coefficient of 80 for DCs and 5 for DedCs) NAMA negotiations are simply unacceptable in their present form

GATS: increased pressure to liberalise service sectors, not enough time, space and flexibility for DCs to make right decisions (effectively irreversible!)

LDCs: market opening for 97% of tariff lines, but under the EBA the use of 18 tariff lines was enough to exclude sugar, rice and bananas. 3% allows the exclusion of 10 times this number of tariff lines

Deutschland