Apr 6, 1984


GENEVA, APRIL 4 (IFDA/CHAKRAVARTHI RAGHAVAN) -- A consensus favouring greater discipline in international trade in agricultural products, leading to liberalisation of this trade, would appear to have emerged at the meeting of the Committee on Agriculture of the General Agreement on Tariffs and Trade, which concluded its fifth session here this week.-

While Industrial countries with interest solely in temperate zone products seemed optimistic, Third World countries were very cautious in their assessments.-

For one thing, they noted that the so-called consensus, as summed up at the meeting by the chairman of the Committee, Mr. Aert Je Zeew of Netherlands, is in very general terms, and is to be the basis for some draft recommendations to be prepared by the GATT secretariat and the chairman, for the consideration of the Committee, at its next meeting set for June 6-8.-

If these are adopted by the Committee, it will go to the meeting of the Contracting Parties in November 1984, who would then have to decide whether they could then move forward towards negotiations on these issues.-

Secondly, they said, though not specifically put down as part of the consensus summing up, there was the issue of the asymmetrical relationships between the Industrial and developing countries, and hence need for differential and preferential treatment favouring the Third World, whether on market access or on subsidies.-

This view, very strongly presented in the Committee by the Third World participants, has to be incorporated in some way in the new text to be prepared, with specific recommendations. Only then would the Agricultural Committee at its next meeting, and the Contracting Parties, be able to move forward towards negotiating a multilateral framework.-

Some Third World participants also noted that the issue of trade in tropical products is now being dealt with separately in the Committee on Trade and Development, and there would have to be progress there and its outcome should result in some negotiations, and would have a bearing on the agricultural trade issues.-

Also, their experience of the GATT system and negotiations has been that the major trading partners bargain among themselves and seek mutual accommodations, ignoring the interests of others, and come and present their agreements on a take-it-or-leave it basis.-

This is what happened in the Tokyo Round, whether on tariffs or on various codes.-

This week's meeting, attended by some 40 of the 50-member Committee and at level of "policy-making officials" from capitals, had before it a "non-paper" that had been presented by the chairman, in the light of the detailed data and discussions at earlier meetings which had examined the agricultural policies and trade regimes of various members.-

The setting up of the committee and the work programme in agriculture was itself the outcome of the November 1982 GATT Ministerial meeting, were no progress was found possible on the of trade in agriculture products.-

According to GATT sources, there is now an emerging consensus that:

-- There are linkages between domestic support price policies in the agriculture area and measures affecting trade.-

While there could be no negotiation or re-negotiation of the domestic policies in GATT, there should be a clearer definition of permissible limits to the impact of domestic agricultural policies on trade.-

-- All Quantitative Restrictions (QRs), both formal quotas and informal arrangements (Voluntary Export Restraints, Orderly Marketing Arrangements, etc.) were barriers to trade.-

The provisions of article XI of GATT, dealing with QRs, should be reinforced in a manner that would enable these restrictions and other related measures being brought under effective GATT surveillance and disciplines.-

-- Health and sanitary, and quality measures applied by countries also are significant in this field, and there is scope for consultations in this area on their "unnecessary adverse trade effects", i.e. when such measures are used as a protective device.-

-- There is currently little discipline on the use of subsidies, governed by article XVI of GATT and the code on subsidies. Neither of these provisions have been effective in the area of agricultural trade, and the use of subsidies should be brought under some kind of control within GATT.-

The article XVI approach could be used to provide for a general prohibition of sasidies but subject to specified exceptions.-

Not merely the "transparent" direct subsidies to exports, but all subsidies that have a trade effect should be covered.-

While the U.S. does not "subsidise" exports, and is in the forefront of demand for their abolition, its domestic agriculture support measures provide considerable support to agriculture. The EEC, a target of attack for its subsidised exports, contends that U.S. support measures have the same effect as subsidised exports.-

The issue of better access for developing countries to world markets and in fairer conditions, and need to take account of their special needs, though proposed as a separate issue for discussion by the chairman, was not apparently discussed.-

However one GATT source suggested this "permeated" the discussion on all other issues.-

Third World participants said it was clear that both the EEC and the U.S.A. feel now a common need to find some way of rolling back their own agricultural subsidy and support programmes. For their own ends, they need a multilateral framework in this behalf.-

Australia and New Zealand, among the developed countries, and Argentina in the Third World, are other temperate zone agricultural producers and have been pressing on EEC and U.S.A. on these issues.-

But as far as the developing countries are concerned, their problems are entirely different and, in terms of the international economy and trade, clearly asymmetric.-

Agriculture in their countries is still traditional, and major source of employment and livelihood for the vast majority. In the Industrial countries, agriculture is now "an industry" with all its implications and ramifications.-

Facing as it does asymmetry in trade relations, the market access issues for the Third World have a different meaning. There could thus be no multilateral framework by which the Industrial countries can demand reciprocal and equal market access in the Third World for the agricultural products of the north.-

On the subsidies too, the other side of the coin of market access, the situation of the developing world is quite different from that of the industrial. For food security, for increasing employment and other development considerations, agriculture in their countries may require subsidies and support.-

Even in terms of these products entering international trade, the developing exporters would have to break into the "organised" markets of the world, where the Industrial countries and their transnationals have "carved up" the market.-

Any multilateral agricultural framework sought, must hence reflect not only the asymmetric position of the developing world on market access and subsidies, but go beyond the usual "pious" statements of intent about differential and preferential treatment. They should be clearly spelt out.-