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The World Trade Organisation's agriculture negotiations chairperson Ambassador Crawford Falconer and Non-Agricultural Market Access (NAMA) chairperson Ambassador Don Stephenson circulated their revised draft ‘modalities' for the Doha round of trade talks on July 17, 2007.
The talks have been bogged down by disagreements between developed and developing countries on agricultural subsidies and tariffs on manufactured goods.
The drafts are based on WTO member governments' latest positions in the negotiations and are an assessment of what might be agreed for the formulae for cutting tariffs and trade-distorting agricultural subsidies, and related provisions.
Key features of the texts include:
On agriculture
- The United States to cut farm subsidies to between $ 13 billion and $ 16.4 billion a year. The US's current limit is estimated at around $ 48 billion. It has offered a cap of $ 17 billion in WTO negotiations.
- The European Union to cut its highest tariffs on farm imports by 73%. It has offered 60% so far.
- Between 4% and 6% of farm products in most developed countries can be classed as “sensitive” and can therefore be protected from the full impact of tariff cuts. The United States and some poor countries had called for a 1% limit; the EU originally said it wanted 8%.
- Does not specify how many tariff lines developing countries can deem as “special” products which are protected from tariff cuts; instead suggests guidelines. The United States has urged countries such as India not to protect large sectors of agriculture against farm imports.
Non-Agricultural Market Access (NAMA)
- Developing countries to cut import tariffs on industrial goods such as cars and chemicals, but not by as much as rich nations.
- A 19-23 range of coefficients for developing countries in a tariff-cutting formula. This is less demanding than a level of 15 sought by the EU and the United States, but deeper than a level of 30 proposed by Brazil and other countries.
- The above would result in the US cutting tariffs on manufactured imports to less than 8% from 58%. For India, imported manufactured tariffs would decline to 15% from an average of 19%. The very poorest countries would have more protection.
- Rich countries to cut tariffs to below 3% on average, with “peaks” or high tariffs for some individual products under 10%.
The international agency Oxfam said the proposal offers too little and costs too much to developing countries to constitute the basis for a development deal.
“This (proposal on agricultural subsidies) is a step in the right direction, but this is very unlikely to bite into actual spending. On average, the US spent $ 15.4 billion between 1995 and 2005. Unless severe caps are put on specific products, these new figures would mean that dumping of cheap produce, which is so damaging to developing countries, will not be eliminated,” said Celine Charveriat of Oxfam's Make Trade Fair campaign.
Of the NAMA text, she said: “It turns the negotiating mandate on its head, requiring a developing country such as Brazil to make more than twice the cut in tariffs than the US. This proposal forces a handful of developing countries, with large and growing populations, to carry the burden of a WTO deal. It would lead to significant job losses and would stifle efforts by developing countries to move into higher value-added sectors.”
Commenting on the proposals, Celso Amorim, foreign minister of Brazil, a key player in the WTO negotiations said: “The papers have problems.” Brazil was still studying the proposals, but they appeared to demand greater tariff cuts in manufacturing than in agriculture. A balance would be preferable, he said.
July 19, 2007
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