Sep 16, 1988


GENEVA, SEPTEMBER 14 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Four net food-importing third world countries have tables proposals in the Uruguay round negotiating group on agriculture underscoring the need for special and differential (S and D) treatment for third world countries in the rules and disciplines to be elaborated on agriculture.

"A clear distinction should be made between subsidies/incentives that are used by developing countries mainly with a view to developing basic infrastructure and for improving production and developed countries to maintain uneconomic production and support unfair competition in domestic and export markets", Egypt, Jamaica, Mexico and Peru said in their paper tabled on Tuesday in the negotiating group.

The paper indicated it had also the support of Morocco and Nigeria, and was "open to further participation and elaboration".

The United States and the Cairns Group, in their proposals for liberalisation of trade in agriculture, have spoken of S and D treatment, but somewhat limited in scope and essentially in terms of longer time frame for third world countries to adhere to the rules and disciplines to be elaborated.

The proposal of the four third world countries deals with the S and D issue clearly and elaborately, and both in regard to disciplines on subsidies as well as market access and other issues.

Given the pivotal role of agriculture in the economic development of third world countries, and the high dependence of these countries on trade in agriculture (both as importers and exporters), any disciplines and rules to be adopted relating to measures that could be taken by Contracting Parties at the border, as well as internal measures that affect the conditions of competition, should include provisions for S and D treatment, the four said.

Such provisions inter alia should:

--Respect the policy objectives and measures adopted by governments of third world countries for promoting development of, and growth in agricultural sector,

--Provide sufficient flexibility to these countries in accepting the obligations which the new rules might impose, taking into account their development, financial and trade interests, and

--Facilitate the trade of third world countries by specifying special measures to be taken by industrial Contracting Parties, and elaborating additional measures for the benefit of least developed countries.

The paper reportedly received support from a number of other third world countries and China who spoke Tuesday.

The U.S. and EEC reportedly welcomed the paper as "a good contribution".

But Japan, the world’s largest net importer and which has made clear that any trade liberalisation would have to except rice in the case of Japan, said it recognised the special needs of third world countries in this sector and the need for S and D treatment.

In their paper, the four countries said that the fulfil the negotiating objectives in agriculture, understandings would have to be reached in 1988 on several elements:

Negotiations should include all trade measures relevant to agriculture, including those taken under the GATT protocol of provisional application (which saved pre-GATT laws), protocols of accession of industrial countries (which as in the case of Switzerland excepted agriculture), or waivers and derogations from GATT obligations (as in the case of the United States).

The concessions should be exchanged among all participants, and the coverage should extend to the widest range of agricultural products including semi-processed and processed.

Al agreements having an impact on agriculture trade should be taken into account – including bilateral long-term arrangements between industrial countries, multilateral arrangements like Usual Marketing Requirements (UMRS), food security, food aid and disaster relief, and sanitary and phytosanitary measures.

Full account should be taken of S and D provisions of GATT like part IV and the 1979 enabling clause.

Understanding should also be reached in 1988 on an appropriate measure of value of concessions to monitor the benefits of liberalisation by industrial countries in favour of the third world.

Such a measure had application beyond agriculture, and should contribute to evaluation of the effective application of the differential and more favourable treatment (mandated by the Punta del Este declaration) to be carried out by the Group of Negotiations on Goods (GNG).

The four also noted the need for actions to improve market access, improve the competitive environment by increased disciplines on use of all direct and indirect subsidies, and minimising the adverse effects of sanitary and phytosanitary regulations.

Transitional arrangements that might be agreed upon in 1988 on each of these elements would have to elaborated in 1989 into rules and disciplines, including for S and D treatment to third world countries, and lead to conclusion of negotiation in 1990.

In the area of tariffs (for improved market access), there should be a formula cut approach, incorporating factors for tariff harmonisation, including supplementary reductions on individual products, to be agreed with the objective of zero or low tariffs in industrial country markets.

Also, the GSP and other preferential schemes covered by GATT’s enabling clause, should be improved by better access conditions, and with commitments not to remove such preferential tariffs over a fixed period and to progressively liberalise any non-tariff measures.

Predictability and stability for such arrangements should be achieved through consultations with the third world countries to increase product coverage, improve market access conditions, and achieve greater transparency.

In the area of non-tariff measures there should be agreement on measures to eliminate within an agreed time frame other charges like internal, consumption and excise taxes on products of export interest to the third world.

Voluntary export restraints and bilateral quotas on exports of third world countries should be removed on a priority basis, and all other restrictive trade measures eliminated or brought under improved GATT disciplines.

The rules and disciplines governing trade-distorting subsidies should be strengthened and applied to trade in all goods, while taking account of the special characteristics of agriculture trade and protecting rights and interests of third world countries.

While it would be for each Contracting Party to determine the extent to which use of subsidies by other CPS adversely affect its domestic markets, and take remedial measures like anti-dumping and counter-vailing duties, the disciplines for application of such measures should be clearly defined to prevent abuse by industrialised countries.

"The policy reforms and improved use of disciplines on subsidies in developed countries should not lead to increased prices on world markets being passed on to importing developing countries".

Measures designed to remove trade barriers arising from application of sanitary and phytosanitary regulations should be included in the short-term and transitional arrangements so as to increase transparency and market access, particularly for products of third world countries.

As part of strengthened GATT rules and disciplines, there should be clear rules and disciplines for use of these measures.

There should be special measures to provide information on, and transparency in the application of regulations and measures both in industrial and third world countries.

The immediate application of international standards in third world countries might serve as unintended barriers to trade among third world countries.

A technical group should be established in 1988 to collate, identify and analyse those measures which a priori might be considered to be trade barriers with a view to recommending a framework of principles, rules and disciplines including the possibility of harmonisation and equivalence.

The four countries said that there should be no separate arrangements for trade in agriculture.

Rather, the aim should be to improve and strengthen the rules and disciplines of GATT (including in the area of safeguards) and ensure their application to agriculture.

Improved disciplines for settlement of disputes should also apply to agriculture, taking into account the special characteristics of the trade in perishable products.

There should be a review of the arrangements on bovine meat and dairy products to determine whether they would be necessary in the light of the operationally effective and strengthened GATT rules and disciplines.

The negotiating plan, the paper of the four notes, call for agreements on the content of specific multilateral commitments and on implementation programmes, including transitional arrangements.

Towards this end, and commencing in 1988, short-term or emergency measures and transitional arrangements should be implemented.

The short-term measures, in addressing urgent problems identified by participants, should provide mutual advantage and balance of benefits to each participant. Special and differential measures should be applied as appropriate, including for products of interest to the third world.

The transitional arrangements, like short-term measures, should be formulated and implemented so as to be in conformity with strengthened GATT rules and disciplines envisaged.

In the course of 1988 and 1989, the transitional arrangements should be agreed upon and cover:

--Identification or GATT articles and disciplines to be made effective and/or strengthened,

--Time-table for removal of import restrictions of industrialised countries covered by protocols, waivers, derogations, etc.,

--Improvements in or phasing out of arrangements on dairy products and bovine meat, and

--Establishment of a unit of measurement and mechanism for evaluating the benefits from the implementation in practical and concrete terms of the S and D treatment in favour of third world countries in respect of market access for their exports.