Brussels, 20/05/2008 (Agence Europe) - The chairmen of the committees on agricultural negotiation and on industrial products (NAMA), Crawford Falconer and Don Stephenson respectively, presented their new revised compromise texts on Monday 19 May on the liberalisation of trade in each of their sectors, including what could, in a final agreement, become formulae allowing tariffs to be lowered and farm subsidies with the impact of trade distortion. The two documents, which are revisions of the drafts distributed in July 2007 (EUROPE 9471) and February 2008 (EUROPE 9599-9600), are the result of positions adopted by the governments of WTO member nations in discussions held in negotiating committee since September 2007. They must open the road to trade-offs, at the level of ambassadors, on the two agriculture and NAMA sections in the context of the horizontal process, before being endorsed by trade ministers. Generally speaking, the key elements of the new revised texts, which are therefore not the final versions of the texts, are almost unchanged.
Agriculture: “This version is in a more simplified or cleaner form than the immediately preceding version”, Mr Falconer stresses in the introduction to his new compromise text. According to the New Zealand ambassador to the WTO, there are still some “hot spots” to be negotiated. Farm negotiators will be meeting as of 26 May when the text will be put to their scrutiny. The main developments for each pillar can be summarised as follows:
1) Domestic subsidies. The new text does not contain any new elements on the broad lines concerning reduction in subsidies (see EUROPE 9600 for reduction figures). In his introduction, Mr Falconer states he remains convinced that discussions on the “green box” may be concluded.
2) Market access. The revised text simplifies the figures for the reduction of agricultural customs duties according to the famous four tariff band format which would make the largest cuts in the highest tariffs and the lowest cuts in the lowest tariffs. For developed countries, over five years, there will be a 50% reduction in tariffs below 20%, a 57% cut for tariffs between 20% and 50%, a 64% reduction for tariffs between 50% and 75% and the reduction of between 66% and 73% for tariffs over 75% remains. For developing countries, the reductions will be 33.3% for tariffs below 30%, 38% for tariffs between 30% and 80%, 42.7% for tariffs between 80% and 130% and between 44% and 48.7% for tariffs over 130%.
On sensitive products and the tariff quotas to be opened in compensation for these products, the text is clearer and further progress is still possible. Developed countries will be able to include 4% to 6% of their tariff lines as sensitive, and developing countries between 5.3% and 8%.
In his introduction, Falconer says that there are still differences on special products and the special safeguard mechanism as well as on tropical products and preferences, and that negotiations on these issues is continuing. The new text does not reflect the latest negotiations in this sector and will be updated at a later date.
3) Export competition. No significant alteration has been made to this chapter. At a press briefing, however, Falconer said that, despite there being a few details to iron out, the sub-chapter on food aids and export credits was almost sealed.
Industrial products - The agreement proposed is based on a Swiss formula with two separate tariff reduction coefficients, one for developed countries and the other for developing countries. Falconer's new revised text proposes greater flexibility. For developed countries, the tariff reduction coefficient is now between 7 and 9, rather than 8 and 9 as it was in the previous text; for developing countries, the range is between 19 and 26, depending on three possibilities, instead of between 19 and 23 as in the previous text. These options are: - countries which accept a reduction coefficient of between 19 and 21 will be able to protect between 12% and 14% of their tariff lines relating to their most sensitive products, but these tariff lines must not represent more than 12% to 19% of the total value of the country's imports; - countries which accept a reduction coefficient of between 21 and 23 will be able to protect up to 10% of their tariff lines relating to their most sensitive products, but these tariff lines must not represent more than 10% of the total value of the country's imports; - countries which opt for a coefficient of between 23 and 26 will not be allowed any flexibility. The revised text also offers flexibility: - for customs unions; - for countries subscribing to sectoral agreements; - in deadlines for implementing tariff reductions of the countries that have recently joined the WTO.
These compromise texts are “a step which takes negotiators closer to the end,” commented WTO General Director Pascal Lamy, while acknowledging that “considerable work still remained to be done”. On Tuesday 20 May, the European Commission welcomed the publication of the new texts. (E.H.)