Apr 25, 1988


GENEVA APRIL 21 (IFDA/CHAKRAVARTHI RAGHAVAN)— The negotiating group on agriculture ended its two-day meeting Thursday to continue its current phase of work. The group is to meet again on June 9-10.

At this meeting this week, the group would appear to have had some discussion, without reaching conclusions, on the idea of using the OECD--developed PSE (producer subsidy equivalent) concept in the negotiations, and also heard some preliminary discussion on the U.S. paper on the treatment of third world countries under the proposed new disciplines on agriculture.

After some discussions that brought out sharp differences with the U.S. approach, a consensus decision was reached to the effect that the group recognised that special and differential treatment should be "an integral part of any rules on agriculture", and the group should decide on the contents of such a treatment.

Earlier, in some preliminary comments on the U.S. paper, the EEC is reported to have sarcastically congratulated the U.S. for its 'baldness', in 'hat the U.S. proposals required the third world countries and industrial to do in agriculture more than they did in manufactures.

A number of third world countries reportedly commended the U.S. for at last having taken note of the issue of special and differential treatment, mandated by the Punta del Este declaration, but found fault with the contents of the U.S. paper.

India reportedly noted that the U.S. idea that the special treatment should be dependent on results in other negotiating groups, appeared to suggest 'linkages' that were not acceptable.

Also, the Punta del Este objective was to integrate agriculture trade into GATT, and not to rewrite GATT provisions on special and differential treatment, and impose greater and heavier obligations on these countries than in GATT now. GATT did not totally prohibit quantitative restrictions (QRS), for example, and there were some exceptions. There were also special provisions for third world countries under the GATT provisions on balance-of-payments.

Pakistan, Mexico, Yugoslavia, and Brazil were among- those who agreed with India, and said the U.S. ideas would lead to a lot of problems.

Israel reportedly agreed that it was not possible to have non-commodity specific subsidies for agricultural development.

U.S. agricultural negotiator, Amstud, agreed that there was linkage with outcome in other groups. Also, while what the U.S. was suggesting in agriculture for third world countries implied more obligations on them than now in GATT, and their quantitative restrictions and others for BOP reasonsmight be 'GATT consistent', the U.S. objective in the Uruguay round was to change all these GATT provisions.

A technical group is looking into the idea of evolving an aggregate measure of support and other matters, including the PSE concept, and has held its first meeting, and yet to make recommendations.

However, an attempt was reportedly made at the negotiating group this week, to require all countries to furnish their PSE data and estimates, and in a format to be drawn up by the secretariat.

This would have meant that the PSE concept would be used in negotiations, only leaving the question of how to be decided.

The PSE concept has been endorsed by the U.S. and some of the leading cairns group protagonists, while the EEC has been cool.

But a number of third world countries have said they found the concept too technical, and inapplicable to the problems of agriculture and development in their countries, where state support and active involvement is a necessity.

Some of these countries have also been refusing to accept ‘commitments’ in respect of supply of data or accent notification requirements beyond those they are committed to already under the general agreement.

As a result, the negotiating group reportedly merely agreed that 'it would be open' to participants to submit, in line with 'an appropriate format', PSE data and estimates to the technical group to facilitate its work.

This, it was further agreed, would be done 'on a best endeavour basis’ and without prejudice to whether and if so how, an aggregate measurement of support might be used in the negotiations.

The chairman reportedly made clear that decisions on these matters would have to be taken in the negotiating group itself and not in the technical group (whose meetings are seldom attended by third world countries who have few staff to field for multiple meetings at the same time).

Participants said at this week's meeting, the group had received and examined more papers and communications - from Nigeria, Argentina, Morocco, the U.S., and the EEC - on one or another aspect of its agenda, and discussed some of the proposals.

However, they said, little progress could be expected, until a solution is found to the impasse aver short-term vs. long-term measures, and how to deal centrally with the development issue in agriculture.