Sep 30, 1989


GENEVA, SEPTEMBER 29 (BY CHAKRAVARTHI RAGHAVAN)— The issue of "development" and measures undertaken by third world countries to promote agriculture are not negotiable, and the proposed rules and disciplines for agriculture trade will have to accommodate this.

This in essence was the message, with varying nuances, that some third world countries reportedly put across at this week’s meeting of the Uruguay round negotiating group on agriculture.

The group was discussing the issue of "application of differential and more favourable treatment for developing countries" in the agriculture negotiations.

The mid-term accord in agriculture reiterates that this treatment is an integral element of the negotiations, that government measures of assistance, direct or indirect, to encourage agriculture and rural development, are an integral part of the development programmes of the third world, and that the agriculture negotiating group in its work programme should evolve modalities for special and differential treatment.

The industrial countries, particularly the U.S. and some others, while conceding this as a principle, have been trying to whittle it down by first pushing for general rules and principles and disciplines, and then for time-bound case-by-case exemptions to third world countries on merits.

The discussions in the group this week centered around a statement made by Brazil, a member of the Cairns Group, and on which a number of other third world countries gave their own reactions.

The Brazilian statement called for "indispensable flexibilities" for third world governments and set out a "non-exhaustive list of instruments" they could use to achieve this.

But it also suggested that in respect of "trade-distorting" support measures, third world countries would come under the disciplines but would be subject to "cuts lower than agreed targets".

India, which had first raised in the group the "development" dimension in agriculture, and the need to provide for it as an integral part of new disciplines rather than the GATT way of exceptions, in its comments rejected the idea that domestic support measures of third world countries in any way distorted international trade and hence needed disciplines.

The major weight and trade shares in the world markets in agriculture is with the ICS, who had gained this through protectionism and domestic and export subsidies, and it is their policies that have to be reversed and disciplined, India made clear.

The U.S. and others raised the issue as to what was "development", whether there would be an agreed definition of this or of the developmental measures, and who would be "developing countries", as also the issue of "graduation".

In effect, Brazil and others made clear that "development" was not negotiable, that "developing countries" was a self-elective class in the GATT as in the rest of the UN system. They also rejected the idea of graduation by others deciding whether a country had "developed" or not. .

In other discussions, the EEC presented a paper explaining its ideas on rules and disciplines, which suggested that it would not give up or modify its variable levy system or its export subsidies, but only negotiate the levels of its domestic support.

The U.S. and members of the Cairns Group in their comments were reportedly quite caustic about the EEC’s stand-pat positions.

In its statement on the differential and more favourable treatment (S and D as it is known in GATT) issue, Brazil said that the implementation of reform commitments for a more market responsible agriculture by the third world "must be coupled with the application of indispensable flexibilities".

As a general principle, third world countries should be allowed to set priorities on various measures and their implementation schedules.

The needed flexibility could be provided by a longer time-frame: third world countries should be provided extended periods for implementing and completing the reform process, and the periods adjusted on the basis of "genuine difficult circumstances that may arise".

Another instrument for needed flexibility, Brazil said, should be in the differential treatment in application of commitments.

In the area of access, this could be expressed by lower cuts in tariffs and non-tariff measures than the generally agreed target. It should also include flexibility in the area of quantitative restrictions (QRS).

In the area of support measures, those forming an integral part development programmes of third world countries, "will not be negotiated".

For trade-distorting support measures, the cuts would be lower than agreed targets.

Consistent with this, if an aggregate measure of support (AMS) is used in the negotiations, certain items linked to "measures to encourage agricultural and rural development" and infrastructure costs should not be included in the case of third world countries, Brazil said.

In the area of sanitary and phytosanitary regulations, the most important is to eliminate discriminatory treatments that third world countries have been facing.

Longer time frames for implementation of new measures and standards, once they have been enforced at national level by the participants demanding compliance, could be useful.

Third world countries should also be compensated for loss in value or share of their exports to individual markets either as a consequence of frequent changes in domestic sanitary regulations or of the application of sanitary regulations without multilateral scientific support.

As for net food importing third world countries, their legitimate needs should also be considered. By applying some of the measures it had outlined, some of the concrete problems of these could be alleviated.

There should be also be study of what could be done inside GATT to meet their problems and what outside GATT. As a first step, there should be a definition of net food importing countries, Brazil suggested.

Colombia and Indonesia (on behalf of the Asian members) also made statements, which explicitly or implicitly appeared to support some of the points made by Brazil.

Amb. Kartadjoemena of Indonesia indicated that the Asian, along with other members of the cairns group was working to develop a concrete and balanced approach to S and D.

The Asian statement underscored "the primordial importance" of agriculture to development of the third world, and the commitment of these countries to ensure that all necessary measures to develop effective long-term agricultural production capabilities be considered as an integral part of the development efforts.

This last included the capacity to develop long-term basic staple food production capabilities at competitive levels.

Within the context of development efforts, S and D was important to achieve development objectives. Proposals to be formulated should include flexibility in content and extent of reform commitments of the third world countries and longer time-frame for implementation.

The Indonesian delegate also expressed Asian’s sympathy with the efforts of net-food importing to deal with their serious problems. An element of the negotiating group's work to develop of a comprehensive, balanced and constructive approach to meet development needs should hence contain elements to deal with the specific interests of food-importing third world countries.

India, in its intervention, reportedly recalled its earlier statements in the group that trade distortions in the international markets in agriculture were caused by the industrial countries who had used export subsidies and protection and domestic support in agriculture. Third world countries were not responsible for the current distortions in the world market and this had to be recognised.

It was recognised by all that the support provided by third world countries in their domestic markets was essentially part of development policies and programmes. In view of this, no commitments could be set or expected from third world countries as far as support programmes were concerned. "The domestic agricultural policies of developing countries are just not negotiable."

Participants at the meeting said that some 18 third world countries took the floor to offer their preliminary comments. These included Colombia, Indonesia for Asian, Peru, Chile, Jamaica, India, Argentina, Cote d'Ivoire, Yugoslavia, Korea and Uruguay. While they had differing nuances, they appeared united on the "development" issue.

Also, for the first time there was a dialogue of sorts with industrial countries participating in the discussions. The U.S. reportedly asked some quest ions about definition of "developing countries", about definition of "development" and "development measures".

Brazil, in its response to the discussions would appear to have noted that the issue of special and differential treatment and developing countries had been dealt with in the Punta del Este declaration. The ideas it had put forward, Brazil reportedly clarified, were preliminary ideas and it would work with cairns group members to put forward concrete suggestions. Brazil was open to the substance of the ideas.

The chairman of the negotiating group, Aart de Zheew of Netherlands, would appear to have summed with the statement that in his view the ideas put forward by Brazil had received support and they were "very good ideas" to be pursued further.