Trade Policy Roundtable
Taking a Framework Agreement on Agriculture Seriously (May 28, 2004)
INSTEAD of persisting with efforts to get agreement on the modalities for negotiations on agriculture, which got nowhere in three years, the focus in the Doha Round talks has shifted to discussing the outline of a final package. If all WTO members were to take the Doha Ministerial Declaration seriously, governments might be able to agree on an approach that could achieve the stated objectives on agriculture, but there is no sign yet of that happening.
To get discussions in Geneva re-started, following the Cancún debacle last September, Robert Zoellick, the U.S. Trade Representative, wrote to trade ministers in January and then visited capitals to consult them. As a result, the negotiators are trying to agree by the end of July an approach to tackling agriculture, set out in a framework agreement without details, and an approach, too, to tackling non-agricultural market access in another such agreement. Agreements on an approach to other Doha Round issues are also being sought.
Opportunity to Pause for Reflection
Nobody expects to be able to reconcile the positions of the different trade blocs and coalitions by the end of July. On agriculture, for example, positions range from that of the Cairns Group countries, fed up with being discriminated against in industrialized-country markets, to the gradualist (“do nothing”) approach of Japan, Korea, Switzerland and Norway.
Regarding the majors, it is hard for the United States, for well-known political reasons in a presidential election year, to discuss the reform of domestic farm-support programs. And for the European Union it is also hard, with its “Eastern enlargement” in progress and its Commission changing at the end of the year, to think seriously about fundamental reforms – assuming a disposition to do so.
For other countries, however, the current discussions in Geneva might be viewed as the beginning of a collective effort to reflect on what the Doha Round negotiations are trying to achieve. Something of the sort, which should have been done at a policy-making level before the negotiations were launched, was discussed at the Institute’s last meeting, held on November 25 (click here for more). There it was argued that a big re-think would be necessary if the negotiations are to be “re-launched” in the second half of next year – after U.S. trade-negotiating authority has been extended.
In the meantime, those interested in seeing the multilateral trade-liberalizing process extended fully and effectively to the agriculture sector of the world economy might take the proposed framework agreement seriously, looking carefully at what is being proposed.
Proposals on the Three Pillars
The agenda of the Cordell Hull Institute’s meeting, along with the speakers, is set out over the page. It has a two-fold purpose. One is to discuss proposals on the three pillars – domestic support, export subsidies and border protection – and the other is to marshal the arguments for achieving the Doha Round objectives on agriculture.
On domestic support, the debate is about tightening the definition of categories of farm-support measures according to whether they do or do not distort patterns of trade – or, for that matter, patterns of production and consumption. On export subsidies, the United States is apparently prepared to remove the subsidy element in export credits and to discuss food aid, so attention is chiefly focusing on eliminating export subsidies.
On border protection, which is the form that public support for agriculture takes in developing countries, various formulas have been urged, including (i) the Uruguay Round formula used to get the agricultural trade-liberalizing process started and (ii) the Swiss formula first used in the Tokyo Round negotiations to harmonize industrial tariffs while also reducing them, the aim being to cut “tariff peaks”.
The European Union and the United States have favored (iii) a blended formula, as proposed in the draft “Derbez text” that was produced, but not adopted, at the Cancún ministerial conference. Many Cairns Group and G-20 countries prefer (iv) a modified Harbinson framework, which would involve a three-tier approach, with different formulas for developed and developing countries, the latter also expected to enlarge their tariff-rate quotas.
Need for a Psychological Push
If governments are able in the WTO General Council to settle on the two framework agreements by the end of July as planned, even if at a high level of generality, it could impart a psychological push to the Doha Round negotiations. In any event, the effort should help to get under way in capitals the reflection and analysis required at a political level to resume the negotiations successfully at the next WTO ministerial conference, which is due to take place in Hong Kong sometime in 2005, maybe in June or July.
CHAIRMAN William D. Rogers – Acting Chairman, Cordell Hull Institute, Washington, DC, and Vice Chairman, Kissinger Associates, New York; former U.S. Under Secretary of State for Economic Affairs
09:05-10:00 Re-launching” the Doha Round Negotiations in 2005
SPEAKER Clayton Yeutter – Counsel, Hogan & Hartson, attorneys-at-law, Washington, DC; former Secretary of Agriculture and onetime U.S. Trade Representative
DISCUSSANT Bob Stallman – President, American Farm Bureau Federation, Washington, DC
10:00-12:30 Elements of a Framework Agreement on Agriculture
10:00-10.45 Substantial Reduction of Domestic Support
SPEAKER Robert L. Thompson – Chairman, International Food & Agricultural Trade Policy Council, Washington, DC; former Director of Rural Development, World Bank
DISCUSSANT Thomas Lambie – President, Federated Farmers of New Zealand, Wellington, New Zealand
11:00-11:45 Dealing with Unfair Export Competition
SPEAKER Pedro de Camargo – Consultant, Sociedade Rural Brasileira, São Paulo, Brazil; former Secretary for Production and Trade, Brazilian Ministry of Agriculture, Brasilia
DISCUSSANT Liam McCreery – President, Canadian Agri-Food Trade Alliance, Ottawa, Canada
11:45-12:30 Substantial Reduction of Border Protection
SPEAKER Andrew Stoeckel – Executive Director, Centre for International Economics, Canberra, Australia
DISCUSSANT Eugenio Diaz-Bonilla – Executive Director (Argentina), Inter-American Development Bank, Washington, DC
13:30-14:30 Prospects for on a Framework Agreement on Agriculture
SPEAKER Allen Johnson – Chief Agriculture Negotiator, Office of the U.S. Trade Representative, Washington, DC
About the Speakers
Mr PEDRO DE CAMARGO, former Secretary for Production and Trade, Brazilan Ministry of Agriculture (2001-02), is a consultant to, and director of, the Sociedade Rural Brasiliera, São Paulo, having been its president in 1990-94. Mr de Camargo is also a director of the International Food & Agricultural Trade Policy Council, Washington, DC.
Mr HUGH CORBET is President of the Cordell Hull Institute, Washington, DC. Earlier, in 1990-97, he was at the Sigur Center for Asian Studies, George Washington University, the Brookings Institution and the Woodrow Wilson Center, Washington. For 20 years, he was the Director of the Trade Policy Research Centre, London (1968-89).
Dr EUGENIO DIAZ-BONILLA has been Executive Director (for Argentina) at the Inter-American Development Bank, Washington, DC, since 2002. Earlier, he was a Senior Re-search Fellow at the International Food Policy Research Institute (1995-2002), having been a senior trade official in the Argentine Government.
Ambassador ALLEN F. JOHNSON has been the Chief Agricultural Negotiator in the Office of the U.S. Trade Representative, Washington, DC, since 2001. Earlier he was legislative assistant to U.S. Senator Charles Grassley, of Iowa, and before that he was Executive Director of the Iowa Soybean Association, 1988-91.
Mr THOMAS LAMBIE, President of the New Zealand Federated Farmers, operates two organic dairy farms at Pleasant Point, near Timaru, on the south island of New Zealand. Earlier, in 1996-2002, he was the Vice President of the NFF; and before that he was President of the NFF’s South Canterbury branch.
Mr LIAM McCREERY has recently become President again of the Canadian Agri-Food Trade Alliance, Ottawa. He was CAFTA’s first President in 2001-02. Mr McCreery produces grains and oilseeds on the family farm in Oxford County, Ontario, and has been a member of the board of the Ontario Soybean Growers since 1993.
Mr BOB STALLMAN, a rice and beef producer from Columbus, Texas, has been the President of the American Farm Bureau Federation, Washington, DC, since January 2000. He is a member of the Agricultural Policy Advisory Committee for Trade, which advises the U.S. Secretary of Agriculture and the U.S. Trade Representative.
Dr ANDREW STOECKEL is Executive Director of the Centre for International Economics, Canberra, Australia. Earlier, as head of the Australian Bureau of Agriculture Economics (1981-86), he directed a series of ground-breaking studies on the economy-wide costs of agricultural protection in the European Union, Japan and the United States.
Hon. ROBERT L. THOMPSON, a Senior Fellow at the National Center for Food and Agricultural Policy, Washington, DC, is Chairman of the International Food & Agricultural Trade Policy Council. Dr Thompson was Director of Rural Development at the World Bank in 1998-2002. In 1985-87 he was U.S. Assistant Secretary of Agriculture for Economics.
Hon. CLAYTON YEUTTER is Counsel at Hogan & Hartson, attorneys-at-law, Washing-ton, DC, and Chairman of Oppenheimer Funds Inc., New York. In 1989-91, he was U.S. Secretary of Agriculture, having earlier been U.S. Trade Representative in 1985-88. Before that Dr Yeutter was President of the Chicago Mercantile Exchange in 1978-85.
The Cordell Hull Institute’s Trade Policy Roundtable is sponsored by Akin Gump Strauss Hauer & Feld, Arnold & Porter, O’Melveny & Myers, Steptoe & Johnson and Wilmer Cutler & Pickering