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Focus on agriculture in WTO

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While the G-20 has made its stand clear on the importance of agriculture, crucial is the nature of the response by the US and the EU. The developed countries have been using every means at their disposal to drive as hard a bargain as possible with the developing world on various issues. The commitment of the rich to the WTO regime itself is now under test, and the G-20 should use this opportunity to get its pound of flesh without making too many sacrifices elsewhere.

If the Doha Round is to yield results, agriculture is the key.
If the Doha Round is to yield results, agriculture is the key.

Ranabir Ray Choudhury

THE MOST important message that the New Delhi meeting of the G-20 members of the WTO (now G-21 following Uruguay's accession to the group) has sent to the world at large and to the developed economies in particular is that nothing will move at the Hong Kong ministerial meeting (the sixth since the World Trade Organisation was established in 1994) in December unless there is some advance in the farm sector.

In a way, this can be seen as the concerted reply of the developing world to the stand adopted by the rich, namely, that agriculture is just one element of the WTO negotiating process, and that for a successful conclusion of the ongoing talks leading to the finalisation of the Doha Development Agenda (known popularly as the Doha Round), there must be progress in sectors such as market access for industrial products, services, TRIPs, etc.

In fact, in early March, a "mini-Ministerial" (attended, by invitation, by 29 Ministers and senior officials) was held at Mombasa in Kenya where a clear attempt was made by the developed countries to labour the point that the success of the ongoing negotiations depended to a large extent on the composite nature of the progress that would have to be made between now and (latest) August on a wide array of issues. The attempt was "indirect" to the extent that the meeting's original agenda was to discuss services, non-agricultural market access, anti-dumping "and other related issues as well as development".

Among other things, what this makes clear is that the driving force behind the Mombasa meeting was clearly aligned to the general stand of the developed economies on the Doha Round issues, which is just one more indication that Africa, though squarely among the poor and the poorest of the poor, is today considered to be fertile ground in terms of support for those pushing the "non-priority for agriculture" line in Geneva.

As on other occasions, here too the Brazilian Foreign Minister, Mr Celso Amorim, took up the cudgels on behalf of the G-20 and emphasised the point that "leadership must be by agriculture because that is why the round exists".

The Australian Trade Minister, Mr Mark Vaile, too reportedly pitched in with the line that farm issues should continue to "lead the round". Not surprisingly, both the EU and US representatives made a weak attempt to back their stand with the argument that the need of the hour was "a balanced deal that would include real cuts in tariffs for non-agricultural products, as well as more open services markets". It is of interest to note that, at this Mombasa meeting at least, the participating African countries avoided taking sides and adopted a general line with Rwanda's Commerce Minister calling for a "tangible political commitment" to addressing issues important for the poor economies.

It is against this background that the G-20's focus on farm issues should be seen, the symbolic importance attached to the emphasis being adequately emphasized by the very first paragraph of the declaration issued at the end of the meeting, which reads (in part): "Agriculture is vital for all developing countries and is central to the Doha Development Agenda. Our common goal is to put an end to trade-distorting policies in agriculture maintained by developed countries, thus contributing to growth and development of developing countries and their positive integration into the world trading system".

In the fourth paragraph, the point has been made that farm negotiations "have multiple dimensions and are technically complex" and that, importantly, "these negotiations should be intensified to stimulate progress in all other areas of negotiations".

Without doubt, the pre-eminence of agriculture in the scheme of things associated with the Doha Round has been established by the G-20 meeting, the declaration spelling out in some detail the group's position on the issues of trade-distorting domestic support to farmers in the developed economies and on subsidies for farm exports.

The G-20 has added teeth to its emphasis on agriculture by, for the first time, suggesting a specific time limit for the elimination of the export subsidies in question by the developed countries, principally the EU. Paragraph 16 of the declaration reads in part: "Ministers expressed that in the export competition pillar, a key decision to be taken is the date of elimination of all forms of export subsidies. They urged countries that apply such instruments to eliminate them in a period no longer than five years and with a front-loading of commitments".

The importance of this demand is underscored by the following sentence: "An early agreement would inject new momentum to the agriculture negotiations and make progress easier on other fronts".

The G-20 has focused attention not only on agriculture but also on the need to treat the poorer among the developing countries on a separate footing. By doing so, two birds have been aimed at, the first being the rich economies which have till now assiduously pursued the strategy of trying to divide the developing world by driving a wedge between the latter and the least developed countries (LDCs); the second being the growing suspicion among some developing countries that the more better-off among them are pooling their resources together and trying to forge a deal with the rich which would be more to their own advantage than to that of the other poor countries.

Thus, paragraph 27 refers to the special position of the least-developed countries, the G-20 Ministers iterating their support for provisions exempting the LDCs "from any (tariff) reduction commitments" and "for steps to be taken to promote the export capacities, including the need to address the supply constraints of LDCs". The declaration went the extra mile to add that "it should be ensured that the LDCs make meaningful gains in each of the three pillars".

In paragraph 28 a reference has been made to other categories of developing countries which are not as badly off as the LDCs but which also cannot be categorised along with economies such as China, Brazil, India, etc, a group which, at some point of time, could be used effectively by the developed countries to scupper the façade of unity at present marking the developing world. This paragraph reads as follows: "Without creating any new categories of developing countries, Ministers agreed that the concerns of small, vulnerable economies must also be effectively addressed as part of the Work Programme mandated in paragraph 35 of the Doha Ministerial Declaration."

While the G-20 has made its stand clear on the importance of agriculture, the more important issue is the nature of the response, if any, by Washington and Brussels to this initiative.

Left to themselves, the developed countries have been putting up a brave face and using every means at their disposal to drive as hard a bargain as possible with the developing world on the issues involved. This is as it should be, but in recent days something else has happened which has driven the US and the EU into a corner, extrication from where requires a different ball game altogether. The two WTO rulings on cotton and sugar subsidies, which have gone against Washington and Brussels, respectively, have added powerful "official" ammunition to the ongoing campaign of the developing countries against these charges.

The US and the EU cannot be seen to ignore the rulings, but neither can they capitulate without a fight which, in all likelihood, will take the path of prevarication and delay.

The commitment of the rich to the WTO regime itself is now under test, and the G-20 should use this opportunity to get its pound of flesh without making too many sacrifices on other fronts.

(This article was published in the Business Line print edition dated March 28, 2005)
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