Brussels, 12/02/2008 (Agence Europe) - As we indicated (see EUROPE 9599), the revised draft compromises on liberalisation modalities in agriculture and industrial goods (NAMA), tabled on Friday 8 February by the respective chairmen of the World Trade Organisation (WTO) negotiating committees Crawford Falconer and Don Stephenson, did not throw up any surprises. The European Commission responded cautiously on Monday 11 February. “These texts must advance the negotiations by providing for new trade flows and new opportunities in the global economy,” it said, promising detailed comments “as soon as possible”. EUROPE here looks at the overall figures and main innovations of the revised text on agriculture which will be considered at a meeting of the agriculture negotiating committee in Geneva on 15 February.
The main changes brought by Falconer to his July 2007 draft (see EUROPE 9471) and the 16 working papers submitted at the end of December-start of January (see EUROPE 9578) lie effectively in the clarifications on issues relating to developing countries and countries which recently joined the WTO and on a number of technical matters, particularly exemptions on tariff reductions for sensitive products and special products, and also special safeguard mechanisms. Similarly, throughout the new text, which is built on three pillars (domestic support, market access and export competition) a large number of square brackets (figures or sections of text still open to negotiation) have been removed.
- Domestic support - Falconer's revised text proposes a reduction in the overall trade distorting domestic support (OTDS, “blue box”, “amber box” and de minimis) over the period 2009-2013 of between 75% and 85% for the EU (somewhere between US$16 and $27 billion), between 66% and 73% for the United States (between $12.8 and $16.4 billion for Washington) and Japan, and between 50% and 60% for the other developed countries. However, the revised text proposes, with no square brackets, a reduction on “amber box” domestic support (which affects most trade) of 70% for the EU, 60% for the US and Japan and 45% for the other developed countries. A significant amendment is proposed on this point: the EU, the US and Japan will have to cut this support by 25% immediately the overall agreement is implemented, then by equal annual increments over 5 years (compared with 30% immediately and 4 years in the July 2007 text).
- Market access - the revised texts makes no changes to the July 2007 draft. Agricultural customs duties will be reduced principally according to the terms of a four tariff band formula which provides for the greatest cuts to be in the highest tariffs and the smallest in the lowest tariffs. For developed countries, reductions will be within the 48-52% range for tariffs below 20%, within the 55-60% range for tariffs between 20 and 50%, within the 62-65% range for tariffs between 50 and 75%, and within the 66-73% range for tariffs of over 75% (Ed: no square brackets for these figures removed in the revised text). For developing countries, the compromise proposal sets out, in an annex, a list of 45 developing countries, small and vulnerable economies not on the list of LDC (least developed countries) which will be able to introduce lower customs duty cuts.
For sensitive products (goods that can be subject to a lower tariff reduction), the revised text contains very few alterations from the January working paper, with one exception: the rules that apply to countries at least 30% of whose tariff lines are in the highest category of duties. These countries will be able to declare 6-8% of their tariff lines as sensitive, compared with 4-6% for the other countries; however, only those products in the additional 2% will be subject to higher than normal import tariff quotas. Also, additional import quotas are to be granted for all sensitive products in the case of countries which will have more than 4% of all their tariff lines (instead of 5%) above 100% following the general customs duty reductions.
The revised text also says that the increase in import tariff quotas should result in increased market access equivalent to at least 1% of domestic consumption from the first day of the implementation of the agreement, with, thereafter, annual progression of 1%. It says that 1.5% of tariff lines will be eligible for the special safeguard clause (increase in border protection in the event of massive imports). However, Falconer's revised text sets out in legislative terms the arrangements proposed for developing countries with regard to their sensitive products, known as special products and the special safeguard mechanism.
- Export competition - No significant alteration has been made to this chapter. The text notes the withdrawal of export subsidies by 2013 (half by 2010) in developed countries and by 2016 for developing countries. (E.H.)