ACHIEVING AGRICULTURAL ACHIEVING AGRICULTURAL DEVELOPMENT THROUGH DEVELOPMENT THROUGH

AGRICULTURAL TRADEAGRICULTURAL TRADE

What do Developing Countries Need From Trade What do Developing Countries Need From Trade Negotiations?Negotiations?

ByBy

Percy W. MisikaPercy W. Misika

29 February 200429 February 2004

STRUCTURESTRUCTURE IntroductionIntroduction

Current World Agricultural Trade developmentsCurrent World Agricultural Trade developments

WTO Agreement on AgricultureWTO Agreement on Agriculture

– The three pillars of the AoAThe three pillars of the AoA

– Deficiencies within the AoADeficiencies within the AoA

The Doha Development AgendaThe Doha Development Agenda

The needs of developing countriesThe needs of developing countries

– Procedural principlesProcedural principles

– Overall negotiations outcomeOverall negotiations outcome

– Specific negotiation outcomesSpecific negotiation outcomes

ConclusionConclusion

INTRODUCTIONINTRODUCTION

Focus on needs of developing countries from Focus on needs of developing countries from

Agricultural Trade NegotiationsAgricultural Trade Negotiations

Developing countries` needs and concerns are Developing countries` needs and concerns are

diverse and complexdiverse and complex

One-size-fits-all principle One-size-fits-all principle is not applicable (Focus is not applicable (Focus

on Namibia’s needs) on Namibia’s needs)

Focus on Multilateral (WTO) Agricultural Trade Focus on Multilateral (WTO) Agricultural Trade

Negotiations Negotiations

CURRENT WORLD AGRIC. CURRENT WORLD AGRIC. TRADE DEVELOPMENTSTRADE DEVELOPMENTS

Share of world total agricultural exportsShare of world total agricultural exports

Agriculture accounts >50% of export Agriculture accounts >50% of export earnings for 40 developing countriesearnings for 40 developing countries

Agricultural exports from ACP account for Agricultural exports from ACP account for only 4% of EU marketonly 4% of EU market

Western EuropeWestern Europe 42.7%42.7%

AfricaAfrica 1.4%1.4%

Latin AmericaLatin America 0.6%0.6%

FACTORS CAUSING FACTORS CAUSING IMBALANCED AGRIC. TRADEIMBALANCED AGRIC. TRADE

Unfair provisions within the WTO AoAUnfair provisions within the WTO AoA

Capacity constraintsCapacity constraints

Limited/lack of financial resourcesLimited/lack of financial resources

Limitations in technological transferLimitations in technological transfer

Trade inhibiting SPS measuresTrade inhibiting SPS measures

Trade distorting support measuresTrade distorting support measures

Limited research and development Limited research and development

Institutional weaknesses in terms of legislation, Institutional weaknesses in terms of legislation,

organizational structures & policy implementationorganizational structures & policy implementation

THE AOA (3 Pillars)THE AOA (3 Pillars) Concluded & signed on 15 April 1994Concluded & signed on 15 April 1994

Came into force on 1 January 1995. Came into force on 1 January 1995.

The implementation period: The implementation period:

– 6 years for developed countries 6 years for developed countries

– 10 years for developing countries.10 years for developing countries.

Market access (measure limiting / facilitating access Market access (measure limiting / facilitating access

to markets in terms of market entry and market to markets in terms of market entry and market

shareshare

Domestic support (production support subsidies)Domestic support (production support subsidies)

– Green boxGreen box

– Blue boxBlue box

– Amber boxAmber box

Traffic robot lightsHas anyone ever wondered why there is no red colour in the market access robot?

Cont…Cont…

Export competition Export competition

– export subsidiesexport subsidies

– Export creditsExport credits

– Export insurancesExport insurances

– State trading enterprises (STE)State trading enterprises (STE)

– Food aidFood aid

DEFICIENCES WITHIN THE AoADEFICIENCES WITHIN THE AoA Trade Trade

– High tariffs; tariff escalation; tariff peaks and High tariffs; tariff escalation; tariff peaks and

non-tariff barriers within developed countries , non-tariff barriers within developed countries ,

e.g. import licences, import quotas, minimum e.g. import licences, import quotas, minimum

import prices; and technical barriers to trade e.g. import prices; and technical barriers to trade e.g.

SPS measures, animal welfare standards, food SPS measures, animal welfare standards, food

safety standards, labour standards, etc.safety standards, labour standards, etc.

PoliciesPolicies

– Developed countries use massive support Developed countries use massive support

measures at the expense of developing countriesmeasures at the expense of developing countries

– Safeguard measures against unfair competition Safeguard measures against unfair competition

costly and complex costly and complex

Cont…Cont…

Food securityFood security

– Sustainable food security compromised by Sustainable food security compromised by

depressed commodity prices in developing depressed commodity prices in developing

countriescountries

– May lead to balance of payment difficulties in May lead to balance of payment difficulties in

the long-termthe long-term

– The non operationalization of the Marrakesh The non operationalization of the Marrakesh

Decision favoring NFIDC’sDecision favoring NFIDC’s

THE DOHA DEVELOPMENT THE DOHA DEVELOPMENT AGENDA (DDA)AGENDA (DDA)

Based on para 13 & 14 of Doha Ministerial Based on para 13 & 14 of Doha Ministerial

Declaration (DMD)Declaration (DMD)

Comprehensive negotiations aimed at:Comprehensive negotiations aimed at:

– Substantial improvements in market accessSubstantial improvements in market access

– Reductions of, with a view to phasing out all Reductions of, with a view to phasing out all

forms of export subsidiesforms of export subsidies

– Substantial reductions in trade-distorting Substantial reductions in trade-distorting

domestic supportdomestic support

Cont…Cont…

– S&DT integral part of all elements of the S&DT integral part of all elements of the

negotiationsnegotiations

– NTC to be taken into accountNTC to be taken into account

– Set modalities by 31 March 2003Set modalities by 31 March 2003

– Establish new AoA by January 2005Establish new AoA by January 2005

THE NEEDS OF DEVELOPING THE NEEDS OF DEVELOPING COUNTRIESCOUNTRIES

What do developing countries need from Agricultural What do developing countries need from Agricultural Trade Negotiations?Trade Negotiations?

Procedural principlesProcedural principles Fair procedures to ensure a fair outcomeFair procedures to ensure a fair outcome

– TransparencyTransparency

– InclusivenessInclusiveness

– Non DiscriminationNon Discrimination

– EqualityEquality

– BalanceBalance

– FairnessFairness

– FlexibilityFlexibility

Proof of process fairnessProof of process fairness• Widen the inter-sessional consultations Widen the inter-sessional consultations

• Ensure fair representation of all all Ensure fair representation of all all

developmental groupings of countries, i.e. developmental groupings of countries, i.e.

developed, developing, least developed, net food developed, developing, least developed, net food

importing developing, highly indebted poor, and importing developing, highly indebted poor, and

small island developing countries small island developing countries

• Do away with the notion of the chosen few so-Do away with the notion of the chosen few so-

called green room or even better back- door called green room or even better back- door

consultations;consultations;

• Do away with so-called Chairpersons` texts Do away with so-called Chairpersons` texts

produced on their “own responsibility” as this produced on their “own responsibility” as this

highly exclusive practice defeats the very purpose highly exclusive practice defeats the very purpose

of the negotiations. of the negotiations.

Cont…Cont…

• Capacity building, technical assistanceCapacity building, technical assistance

• Accord equal weight or importance to the Accord equal weight or importance to the

viewpoints of all Member Statesviewpoints of all Member States

• Ensure meaningful and effective cross linkages Ensure meaningful and effective cross linkages

in all areas of the single undertaking in all areas of the single undertaking

negotiations (win-win concept), negotiations (win-win concept),

• Accord developing countries sufficient requisite Accord developing countries sufficient requisite

flexibility to take account of their development flexibility to take account of their development

needs.needs.

OVERALL NEGOTIATIONS OVERALL NEGOTIATIONS OUTCOMESOUTCOMES

A Multilateral Development Oriented Doha Round A Multilateral Development Oriented Doha Round

Agreement on AgricultureAgreement on Agriculture

Minister fought and achieved this in DohaMinister fought and achieved this in Doha

Deviation from DDA principles a betrayal of Deviation from DDA principles a betrayal of

Minister’s confidence in negotiatorsMinister’s confidence in negotiators

No multilateral AoA means Rule of the JungleNo multilateral AoA means Rule of the Jungle

SPECIFIC NEGOTIATIONS OUTCOMESSPECIFIC NEGOTIATIONS OUTCOMES

4 key imperatives4 key imperatives

Trade a means to an end, not an end in itselfTrade a means to an end, not an end in itself

Agriculture is the engine for development in most Agriculture is the engine for development in most

developing countriesdeveloping countries

Political will and commitment to redress world Political will and commitment to redress world

trade imbalances and deficienciestrade imbalances and deficiencies

Flexibility be accorded to developing countries to Flexibility be accorded to developing countries to

pursue their agricultural development and food pursue their agricultural development and food

security policies (SSM and SP concept), security policies (SSM and SP concept),

Specific Specific negotiation negotiation

outcomes in each outcomes in each pillar of AoA pillar of AoA

Amber BoxAmber Box

Significant reductions in total AMS, as these have Significant reductions in total AMS, as these have

not been binding at allnot been binding at all

Further limitations on switching support between Further limitations on switching support between

products, preferably making AMS reduction products, preferably making AMS reduction

commitments product-specific (disagregation)commitments product-specific (disagregation)

Elimination or reduction of Elimination or reduction of de minimisde minimis allowances allowances

for developed countries for developed countries

As S&D, maintain current level of As S&D, maintain current level of de minimisde minimis for for

developing countriesdeveloping countries

Burying once and for all the now expired or Burying once and for all the now expired or

“dead” peace/due restraint clause (Article 13)“dead” peace/due restraint clause (Article 13)

BLUE BOXBLUE BOX

Blair House (EU/ USA Compromise)Blair House (EU/ USA Compromise)

Acknowledge these measures are trade-distorting Acknowledge these measures are trade-distorting

and count them under Current Total AMS for and count them under Current Total AMS for

reduction purposes over an agreed period of reduction purposes over an agreed period of

time, if not phasing them out completely.time, if not phasing them out completely.

GREEN BOXGREEN BOX

Tightening of the criteria for inclusion in the Tightening of the criteria for inclusion in the

green box, including a more concise/measurable green box, including a more concise/measurable

notion of what is "minimal effect on production notion of what is "minimal effect on production

and trade". and trade".

EXPORT COMPETITIONEXPORT COMPETITION Substantial reduction or elimination of export Substantial reduction or elimination of export

subsidies that displace domestic production, with subsidies that displace domestic production, with

due consideration of possible negative effects due consideration of possible negative effects

(e.g. strengthening the Marrakesh (e.g. strengthening the Marrakesh Decision on Decision on

NFIDC’sNFIDC’s) in order to help food importers adjust to ) in order to help food importers adjust to

changechange

Subjecting all forms of export support to the Subjecting all forms of export support to the

same provisions accorded to export subsidiessame provisions accorded to export subsidies

Provision of food aid in fully grant formProvision of food aid in fully grant form

Cont…Cont…

Extension of clause 9.4 (marketing and internal Extension of clause 9.4 (marketing and internal

transport and freight costs)transport and freight costs)

Longer implementation period coupled with low Longer implementation period coupled with low

repayment interest rates of export creditsrepayment interest rates of export credits

Allowing developing countries to impose Allowing developing countries to impose

temporary export restrictions for food security temporary export restrictions for food security

and rural developmentand rural development

MARKET ACCESSMARKET ACCESS Substantial reduction, with a view to, phasing out Substantial reduction, with a view to, phasing out

tariff peaks, escalation and high tariffs in tariff peaks, escalation and high tariffs in

developed economies; developed economies;

Uniform internationally accepted SPS regulations Uniform internationally accepted SPS regulations

coupled with financial and technical assistance to coupled with financial and technical assistance to

developing countries to achieve compliance with developing countries to achieve compliance with

set international standards; set international standards;

As S&D accord countries that benefit from As S&D accord countries that benefit from

preferences a period of time to adjust and make preferences a period of time to adjust and make

the required structural adjustments;the required structural adjustments;

Eliminate SSG for developed countries (38 Eliminate SSG for developed countries (38

countries)countries)

Cont…Cont…

Provide minimum market access volumes for special Provide minimum market access volumes for special

products of developing countries into the markets of products of developing countries into the markets of

developed countries (X% of domestic consumption);developed countries (X% of domestic consumption);

Provide duty and quota free market access for Provide duty and quota free market access for

agricultural products originating from least agricultural products originating from least

developed countries in all developed countries; anddeveloped countries in all developed countries; and

Provide for longer implementation time periods and Provide for longer implementation time periods and

lower tariff cuts for developing countries. lower tariff cuts for developing countries.

OTHER AREASOTHER AREAS

Other needs are:Other needs are:

– Continued technical assistance and capacity Continued technical assistance and capacity

buildingbuilding

– Institutional support to effectively implement SPS Institutional support to effectively implement SPS

standardsstandards

CONCLUSIONCONCLUSION

There is an urgent need for an There is an urgent need for an “All Inclusive trade “All Inclusive trade

coalition” using an “All inclusive world agriculture coalition” using an “All inclusive world agriculture

trade strategy”,trade strategy”, if mankind is to rid the if mankind is to rid the

developing world of:developing world of:

– Poverty Poverty

– MalnutritionMalnutrition

– And the scourge of hunger And the scourge of hunger

THE ENDTHE END