Feb 23, 1988

AGRICULTURE DEVELOPMENT AND EMERGENCY ACTIONS DISCUSSED

GENEVA FEBRUARY 18 (IFDA/CHAKRAVARTHI RAGHAVAN)ó The issues of development and the application of-special and differential (S and D) treatment concept in the Uruguay round agricultural trade negotiations were reported to have been discussed in some depth at this week's meeting of the negotiating group.

Chaired by Art de Zeeuw of Netherlands, the group discussed proposals from Japan and Jamaica, and EEC proposals for emergency and short-term measures to stabilise markets in cereals, sugar and dairy products.

The group is to hold its next meeting on April 18.

While arguing for emergency and short-term actions to counter the catastrophic situations in some markets, the EEC appears to have virtually rejected the U.S. and Cairnes group ideas for "mid-term harvest" involving some agreements on medium to long-term objectives and rules in agriculture by 1988 end, and to have an accelerated rhythm of negotiations to facilitate such agreement before the mid-term review.

"I just hope the U.S. will have no illusions on the possibilities of agreement during the mid-term review nor about complete elimination of all agricultural support measures and subsidies in ten years", the EEC negotiator, Guy Legras told newsmen Thursday at a briefing.

Legras said the EEC proposals had been criticised by the U.S. and Cairnes group, who both insisted on prior acceptance of their philosophies on long-term measures - end to all subsidies and full operation of market forces.

But the EEC views had received favourable reactions from countries like India and Egypt, he said.

Another EEC official, Rolf Mueller, said everyone was seeking immediate measures but no one seemed willing to discuss them.

But if there is no interest in stabilising the market in the short terms how do you explain the talk about crisis in world agriculture, he asked.

"If no one wants immediate measures, this reduces interest in the mid-term review exercise", he added.

Third world participants in the negotiating group said that there had been some spirited exchanges on concepts of development in relation to agriculture, and the issue of S and D for third world countries.

The discussions and views, they said, were generated by the Jamaican paper, and the responses of some third world countries to the views of the U.S. and Cairnes group.

Earlier, India's Amb. S. P. Shukla, speaking for the "informal group of developing countries" in the GATT, reportedly complained over the way the viewpoints of third world participants in the group were being reflected in the minutes and records, and said they expected the chairman to ensure that their views were fully reflected.

The group also demanded adequate attention in the negotiations to the S and D requirements, mandated by the Punta del Este declaration, and full discussion of development aspects.

In a reference to the informal meetings and groups on agriculture - such as the Morges group, with limited membership - Shukla reportedly noted that the complicated issues did need informal discussions in small groups. But third world countries had very small delegations, and it was not possible for them to attend such meetings, especially when they were scheduled at the same time as other important meetings.

However, the chairman of the negotiating group should ensure full transparency in the negotiations, by keeping the negotiating group fully informed of these goings-on.

The negotiating group also reportedly discussed Japanese proposals, put forward at the end of December.

The Japanese proposals were a typical Japanese approach, Mueller later told newsmen. It dealt with problems of Japanese agriculture, and not world agriculture, and dealt with problems of export subsidies, which did not affect them but had nothing on access to Japanese markets.

The EECís proposals for short-term and emergency actions sought to cover cereals and cereal substitutes, sugar, and dairy products.

In these three areas, the EEC proposals called for individual undertakings by countries valid for a single marketing year, starting with the next, but renewable by common agreement.

In the case of cereals and cereal substitutes, the EEC called for "price discipline" in exports.

For sugar, it proposed supply management to reduce quantities put on sale on the so-called "free market" - exports other than those covered by special arrangements as of Cuba with the Soviet Union, Lome countries with EEC, etc.

In respect of dairy products, the EEC wanted non-member GATT CPS who are significant exporters to comply with the disciplines of the international dairy arrangement.

The U.S. has opted out of the agreement.

The EEC noted that recently prices of wheat and sugar had improved, and agricultural negotiators should give priority to measures to prevent return to the situation in these markets in recent years.

Countries of significant importance in trade in cereals, sugar and dairy-products should examine without-delay the immediate and coordinated measures, the EEC suggested.

In this regard the EEC suggested associating the executive directors of international wheat council and international sugar council in the work of the group.

These immediate measures, it argued, would be "specific temporary and transitional", and create conditions for a lasting agreement on short and long-term measures to achieve the objectives of Punta del Este declaration.

In the case of cereals, it suggested, that the main countries concerned in cereals export trade should introduce measures to improve market conditions, particularly pricing, and these could include undertakings on prices and/or on quantities placed on the market.

Bread wheat, and main feed grains - fodder wheat, maize and barley - should be covered by such undertakings.

There should be parallel undertakings to enhance transparency, through exchange of information on transactions and terms and conditions.

As regards exports to third world countries, these undertakings could be "waived by mutual agreement" among countries concerned in order to take account of particular problems arising for the third world countries concerned.

In regard to sugar, the main exporting countries should undertake to reduce their net exports by an agreed percentage of the average for the last five years, and importing countries should undertake either to maintain or restore their net imports to level corresponding to their average net imports over the same reference, period.

In regard to dairy products, CPS who are members of the international dairy arrangement should undertake to maintain firm prices in, the framework of the disciplines of the arrangement, and non-member CPS who are significant exporters should comply with these disciplines.

Mueller said that the Cairnes group criticised the EEC proposals as not covering the entire agriculture sector, and promoting interventions in the market to which they were opposed.

The U.S. and Cairnes group also criticised the proposals as going contrary to their philosophies and ideas for long-term framework.

Legras said the EEC did not expect to formulate and table its proposals for long-term measures before next year.

The U.S. position, Mueller said, appeared to be that if no results could be obtained before end of 1988, the negotiations would get nowhere afterwards.

"But we could not accept this, and we did not agree to an accelerated rhythm, of meetings and negotiations", he added.

Third world participants said that in commenting favourably on the EEC proposals, India noted the EEC support for commodity stabilisation in cereals and sugar, and hoped that the EEC plea for short-term emergency measures and for market stabilisation would be applied to all commodity stabilisation agreements, and the EEC would support third world proposals in this regard in the Uruguay round trade negotiations committee (TNC).

In other discussions, participants said the Canadian extensive technical paper on producer subsidy equivalents was viewed by India and others as perhaps relevant in the OECD context, but not applicable to all countries and all sectors of agriculture.

To the complaint that none of the proposals from the three major groups (U.S., EEC and Cairnes) dealt with the development or S and D aspects, the United States reportedly argued that its paper had dealt with a number of issues including environment, development, etc.

India argued that the pde mandate talked only of the "S and D" issue and not others. All the papers viewed the development issue as an exception or distortion to general rules.

There was much more to development than research, training and extension. Agriculture development could involve commodity specific procurement and price support policies in the third world, and these could mat be viewed as trade-distortive.

On the Argentina view that the Cairnes group proposals had sought to address the S and D and development issues, by enabling a wide range of domestic support measures for agricultural development, Jamaica reportedly noted that the Cairnes proposals for example ruled out use of export subsidies by third world countries, whereas the GATT rules on manufactures permitted this.

Jamaica also reportedly said that the third world perspectives had been reflected only in the statements before the group at the last meeting by countries like India, Egypt and Mexico, and the Jamaican communication was based on discussions with a number of countries and sought specifically to focus on these issues.

Mueller told newsmen Thursday that the Jamaican paper had introduced some things, which had not got the attention, that it deserved namely the situation of the imparting third world countries.

"This debate has just started in the group, and it has not finished and will have to be taken up at subsequent meetings", he said.

The problem of increased prices for imparting third world countries would have to be faced he said.

In the long-term, third world importing countries too would benefit from better disciplines and rules in agriculture, but in the short term some of them would have serious problems.

The issues of haw much S and D treatment should be given in the negotiations, and how, had not been addressed either. There were no ready-made answers, but they have to be tackled, the EEC official said.

So far, the negotiations have involved Australia, New Zealand (and the Cairnes group), the U.S. and EEC. The Jamaican paper brings other viewpoints into the negotiations.

Participants in the group said that the U.S. had argued against the concept of food security in the Jamaican and third world proposals, and reportedly said countries would have to choose between "opportunity and security" and third world countries would do well to look for new opportunities rather than for security.

India reportedly replied that the concept of equal opportunities in an unequal world of GATT was fundamentally unsound.

As regards the U.S. plea that third world countries should not "fear competition", this proposition could be accepted by third world countries if it was extended by U.S. and others to other sectors, like manufactures, where they were fearing competition and restricting imports (as in textiles, etc).

In arguing the case for exceptions and special treatment to the third world, Jamaica reportedly noted that even the U.S.-Canadian free trade agreement exempted whole sectors of agriculture.

Canada defended the agreement as a great step towards free trade, and the reasons why particular sectors had to be excluded, and left to be tackled through GATT multilateral negotiations.

India reportedly said that it understood this logic of "not going the whale hag" but those who wanted people to move in agriculture would have to show movement elsewhere. The fear of competition was very much manifest in certain groups of countries, who at the same time advocated the road of competition to others in agriculture.