Agriculture: Shadow boxing for 2000 ?

Geneva, 18 Nov (Chakravarthi Raghavan) -- Issues relating to the monitoring of the Marrakesh and Singapore decisions on the impact of the Agriculture reform programme on the least developed countries (LDCs) and net food importing developing countries (NFIDCs) as well as non-trade food security concerns were addressed this week at the World Trade Organization's Committee on Agriculture.

The Committee is engaged in an exercise of 'notification and review of related issues' - an euphemism for pre-negotiation talks for taking up the continuation of the agricultural "reform process" in year 2000.

Under Art. 20 of the Uruguay Round Agreement on Agriculture (AOA), members have agreed to initiate one year before the end of the implementation period (six years from 1 Jan 1995) i.e. in year 2000, negotiations for the continuation of the reform process.

This is to be done taking into account (a) the experience to date of the implementation of the reduction commitments; (b) effects of the reduction commitments on world trade in agriculture; (c) non-trade concerns, special and differential treatment to developing country members, and the objective to establish a fair and market-oriented agricultural trading system, and the other objectives and concerns mentioned in the preamble to the Agreement; and (d) what further commitments are necessary to achieve the above mentioned long-term objectives.

This mandate in agriculture has been reiterated in the Geneva Ministerial meeting and is a specific item on the work programme - though the term 'agriculture' itself is not mentioned.

The EC has said that it stood by this commitment, but after the Geneva ministerial one of its officials was also quoted in the press as saying that the EC is only committed to take up the further negotiations in 2000, but not to complete it within any time-frame!

The EC has also been arguing with negotiators here (in pushing for a big millennium round and with new issues of investment, competition policy etc) that it would need some concessions on these new issues in order to make the promised concessions in agriculture and elsewhere.

While the Cairns group of countries have been willing to have a new round embracing such new themes, other developing countries have been insisting that they have already paid a price in the Uruguay Round to establish the balance (which in fact, they note, is imbalanced) and the various further liberalisation measures including on agriculture is part of that balance, and they need and will not pay a "new price" for implementation by the EC or US and others of commitments already made.

The work in the agriculture committee to prepare for the negotiations in 2000 is in this context, though the EC has insisted it should not even be called the preparations for negotiations.

And the secretariat of the WTO, which is 'sensitive' to the major concerns of the major entities, has been very reticent in briefing media and others on the agriculture committee issues.

The ongoing process in the committee - with informal meetings and discussions, without any records or meetings, but with some conclusions reported by the chairman to formal meetings on his own authority -- is one of the very opaque and non-transparent activities of the WTO.

The process set in motion after Singapore, at the insistence of the Cairns group of agricultural exporters, has been described by some participants and observers as a preparatory "shadow-boxing" game, where the different countries and groups are probing each other's positions and intentions -- before the mandated further talks on continuing the agricultural reforms agreed in the Agreement on Agriculture.

Much of the agricultural talks and negotiations during the Uruguay Round became one of negotiations and discussions between the US and the Cairns Group of agricultural exporters on the one side, and the European Communities (whose protectionist measures of domestic support,
export subsidy and import restrictions under the common agricultural policy has been the main target), other Europeans and Japan and South Korea who have been similarly following policies shielding off their domestic sectors from external competition but not engaged too much in
subsidised exports.
Most of the developing countries during the round spoke of ending the GATT situation where agriculture was an exception to the trade rules, and generally repeated the need for agricultural liberalization.

But they were essentially bystanders. The final agreement was one forged by the US and EC, with the US obtaining some concessions from the EC and Japan and South Korea, to provide some benefits from its most ardent supporters inside the Cairns group.

While initial analysis by the then GATT Secretariat, and by the OECD and the World Bank, made some extravagant claims of trade and welfare benefits, subsequent objective analysis have shown that apart from exporters of some temperate zone products among the Cairns group countries, most developing countries have gained little, and that in some respects the rules and disciplines are likely to make agricultural development, and ending poverty and hunger more difficult.

Writings and analysis of non-government organizations and experts like Kevin Watkins and others, and trade specialists like Bhagirath Lal Das have brought out the issues involved and the inequities of the current agreement.

Some of these have begun to surface in the current work of the agriculture committee as well as in the WTO preparatory process for the 3rd Ministerial meeting in 1999 in the United States.

In the agriculture committee this week, the problems and difficulties have been raised by several of the delegations, but the actual proposals or ideas they may have for remedying their difficulties may
surface only in the preparatory process, some trade officials say.

The issue of implementation of the Marrakesh and Singapore Ministerial decisions favouring the least developed and net food importing developing countries, and the non-trade issues including S & D treatment to developing countries and other objectives set out in the preamble of the Agriculture Agreement, but without any operative provisions in the rules, have figured in the committee discussions this week, some participants said.

In the discussions on the problems of the Marrakesh decisions on LDCs and NFIDCs, a secretariat note has brought out that the volume of food aid has declined by one-half in volume between 1987 and 1997. The food aid shipments have declined over the period from a 12.7 million tonnes in 1987 to a 5.43 million tonnes in 1997. The secretariat paper does not give any reasons for this.

Among others, the US spoke about the difficulties in getting a new food aid convention (to replace the current one due to end on 30 June 1999) negotiated, while Norway spoke of the need to tackle this and the decline in aid to be addressed. Egypt expressed its alarm over the decline in food aid. Other problems raised included the issue of export credits and the role of the multilateral financial institutions and their not having done enough to provide help to the NFIDCs.

The multilateral financial institutions have been explaining away their positions by saying that there was no increased import costs that could be attributed to the rise in food prices due to the reform process!

FAO has explained that at the moment food prices were lower, except for rice, and this was one of the reasons for the decline in food aid. But FAO has projected an increase in prices in 1998-1999.

On the issues relating to non-trade concerns and other issues -- set out in Art.20 (c) -- adverted to in the preamble of the agreement, participants said that the substantive discussions on these will
continue at the next meeting (scheduled for March 1999).

Some points of agreement on some of these issues have emerged:

Firstly, everyone recognized the importance of these issues. Secondly, the objectives mentioned in the preamble have not been dealt with by rules and provisions of the agreement. Thirdly, there was near unanimity that non-trade concerns should not be used to take steps and measures inconsistent with the WTO rules.

But this general agreement or consensus did not extend to how these issues could be tackled.

The perspectives of industrial and developing countries on what are "non-trade" concerns in agriculture themselves differ.

When industrial countries speak of them, they are using it in terms of measures for preserving rural landscape, environment, bio-diversity etc. The European Communities use this term to refer to the "quality" of food.

For most of the developing countries, except for the Cairns group members, non-trade concerns involve issues of food security and rural employment given that agriculture is the largest sector of rural employment. They do not accept the US or Cairns Group views that freeing the markets would enable imports that would give food security.

If a country does not have the foreign exchange or resources to buy and import food, or if the rural people have no employment or earnings to pay for food and these needs, there is neither security nor any prospects of ending poverty, hunger and under-development.

In the discussions, the LDCs and the NFIDCs are anxious that their special positions recognized by the Marrakesh decisions are not diluted or undercut.

Development issues of the 60s and 70s and early 80s in this area that have been brushed aside in the neo-liberal dogma of the "Washington consensus" and the GATT/WTO trade theorists are thus resurfacing.

And several analysts in looking at individual agreements, including agriculture, have brought out that the promises of "Special and Differential" (S&D) treatment favouring developing countries have
become "Special and Discriminatory" treatment against developing countries.

India at this week's meeting presented a paper on "Food Security - An Important Non-Trade Concern". A number of other developing countries, including South Africa and Mauritius, as well some developed countries like EC, Japan and South Korea, made preliminary comments supporting this viewpoint. A more detailed consideration is expected at the next session of the committee in March.