IPC Seminar Multilateral Trade Negotiations: Update on The Doha Development Round MARCELO REGUNAGA Hanoi – October 2005

THE G-20: A NEW MAIN PARTNER FOR AGRICULTURE NEGOTIATIONS  Two years of activities (inauguration in September 2003)  Main partner for Agriculture negotiations: 63% of world farmers from Asia, Africa and Latin America; 51% world population; 20% ag. production; 26 % ag. exports; 17% ag. imports  Bases:  Linkage between Agricultural Trade and Development  Agricultural Reform can unlock potencial of Agriculture in the developing world: poverty erradication  Views:  Differentiated responsibility of developed countries to address distortions and adopt reforms in Agriculture  Fair and balanced process that ensures inclusiveness and participation (G20 : cross section of developing members)  Doha Round must result in a fairer trading system

THE DOHA MANDATE AND THE FRAMEWORK AGREEMENT  Developing Round: should provide concrete results on agricultural reforms to level the playing field with other sectors  Framework incorporates more that reasonable flexibilities in domestic support and market access  Domestic support:  Increased permitted support: blue box; de minimis  Reductions in OTDS must be very large too be effective  Market access flexibilities:  Water in tariffs  Sensitive products, special products  Special safeguard

RECENTS DEVELOPMENTS  The G-20 has tabled proposals during 2005 on the three pillars which tend to drive the negotiations forward  Concerns after the Dalian Meeting (lack of progress in relevant issues)  New impetus after the USA October proposal  However, the US and the EU October proposals are not enough to induce substantive reforms  The G-20 also tabled new proposals for the three pillars

G – 20 PROPOSALS : DOMESTIC SUPPORT To deliver the Doha mandate of substantial reductions in trade distorting domestic support it is neccesary to count with a combination of significant cuts, disciplines and monitoring  Structure for reductions in AMS, de minimis and OTDS  Base for the overall reduction on domestic support  Disciplines (review and clarification of green box criteria; elements for discussion: blue box; product-specific capping)  Improving Monitoring and Surveillance Mechanisms, to ensure transparency and compliance with the commitments

G – 20 PROPOSALS : DOMESTIC SUPPORT  OTDS and AMS bands and cuts  OTDS Thresholds Cuts AMS Thresholds Cuts Over 60 US$ billion 80 % Over 25 US$ billion 80 % 10 to % 15 to % 0 to % 0 to %  S&D: given the 10 % entitlement in de minimis, special band for developing countries cuts in OTDS  Developing countries without AMS entitlements: exempt of an overall reduction (exemption in de minimis cuts)  De minimis:  Both product and non-product specific reductions to adjust to OTDS cuts  Developing countries with AMS entitlements adjust to OTDS cuts  Exeptions for subsistence poor farmers and countries with no AMS  Cotton: early agreement on effective measures

G – 20 PROPOSALS: EXPORT COMPETITION  Credible date for elimination of export subsidies: no longer than 5 years and with a front-loading of commitments  Proposal on export prohibitions and restrictions  Maintaining the special status of STEs in developing countries  New disciplines on export credits, export credit guarantees and insurance programs and food aid (proposals to be tabled in the next days)

G - 20 PROPOSALS: MARKET ACCESS  Market access: Developed Bands Cuts Developing Bands Cuts 0 to 20% 45% 0 to 30% 25% 20 to 50% 55% 30 to 80% 30% 50 to 75% 65% 80 to 130% 35% + 75% 75% + 130% 40%  Lineal reductions  No flexibilities in the reduction formulas  Sensitive products:  1% of the products which have tariffs  Base: 6% of consumption  Maximum deviation : 30%; the largest deviation in the formulas more increase in TRQs and reduction in intra-quota tariffs

G - 20 NEW PROPOSALS TO BE TABLED SOON  Tariff escalation  Expansion of TRQs  Special products  Special safeguard  Preferences  Special compensatory measures  Food aid  Export credits  Recently acceded members

MARTKET ACCESS SIMULATIONS (Applied tariffs and % reductions of alternative proposals) Applied tariffsG20USA EU with Flexibility EU without Flexibility EU Corn Sun oil Beef Honey Pears USA Process Beef Pears Tobacco Cookies JAPAN Corn Soy Oil Wine Honey