The Doha Round of WTO Negotiations: The U.S. Perspective Robert L. Thompson Chairman International Food & Agricultural Trade Policy Council and Gardner.

Slides:



Advertisements
Similar presentations
DOHA and the EU. Intro Trade of industrial goods Trade in services Trade in agricultural goods Trade and the Environement.
Advertisements

Twenty-Five Ways to Improve the Derbez Draft International Food and Agriculture Trade Policy Council
Provisions of the Federal Agriculture Improvement and Reform Act of 1996 (FAIR Act of 1996) Also referred to Freedom to Farm Developed by: Joe L. Outlaw.
Agriculture Negotiations in the WTO Dr Biswajit Dhar Professor and Head Centre for WTO Studies Indian Institute of Foreign Trade New Delhi WTO Cell, IIFT.
Prosperity Through Trade Sharing Canola With the World Tackling Trade Barriers Presentation to the Canola Council of Canada Convention March 23, 2004 Liam.
Origins of WTO General Agreement on Tariffs and Trade (GATT) –Established in 1947 as a forum to reduce trade barriers WTO replaced GATT in 1995 as legal.
Subsidies in Agriculture – are they good/bad? MERC SEMINAR 10 September 2009 By Bonani Nyhodo (NAMC)
WTO AGRICULTURAL NEGOTIATIONS Portfolio Committee Agriculture and Land Affairs April 2003 Günter Müller Directorate: International Trade National Department.
U.S. Agricultural Policy Joseph W. Glauber U.S. Department of Agriculture Silverado Symposium on Agricultural Policy Reform / Napa, California /January.
WTO Agriculture Negotiations Outstanding Issues for Developing Countries Tim Ruffer Oxford Policy Management
Building on the July Framework Agreement: Advice and Cautions International Food & Agricultural Trade Policy Council International Agricultural.
Trade Negotiations and Agreements Dr. George Norton Agricultural and Applied Economics Virginia Tech Copyright 2009 AAEC 3204.
1 [Giovanni Anania, IAAE Congress, Durban, August 2003] The Fischler reform of the CAP and the WTO negotiations Giovanni Anania Department of Economics.
The Doha Endgame SS Economics of Food Markets Alan Matthews.
CAP/WTO Success: A Global Perspective Alan Matthews Trinity College Dublin Presentation to the Agricultural Science Association National Conference, 23.
The EU’s CAP and the likely impact of a Doha Agreement Lecture 24. Economics of Food Markets Alan Matthews.
Doha Negotiations – obstacles and alternatives to a successful Doha Round outcome Lecture 26 Economics of Food Markets Alan Matthews.
AGRICULTURAL POLICY REFORM IN THE WTO The Road Ahead.
INTERNATIONAL FINANCIAL ENVIRONMENT and EXPORT CREDITS UPDATE
The Economics and Politics of U.S. Agricultural Policy James Dunn Pennsylvania State University.
WTO’s Doha round in an era of high food prices Kym Anderson University of Adelaide, Australia Review session for Ch. 3 of the Monterrey Consensus, on International.
The U.S. and World Sugar Industries under the EU and DOHA Trade Liberalization Won W. Koo   Chamber of Commerce Distinguished Professor and Director  
Directorate for Food, Agriculture and Fisheries ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION DE COOPÉRATION ET DE DEVELOPMENT ÉCONOMIQUES.
WTO Ag Trade Negotiations and the 2007 Farm Bill Robert L. Thompson Gardner Professor of Agricultural Policy University of Illinois August 10, 2005.
Doha Progress & Farm Bill Implications: A Fresh Assessment Robert L. Thompson Gardner Professor of Agricultural Policy University of Illinois 27 July 2006.
Domestic Support and the WTO: Comparison of Support Among OECD Countries C. Edwin Young Mary Burfisher Frederick Nelson Lorraine Mitchell Economic Research.
Global Trade and Trade Policy Robert L. Thompson Gardner Professor of Agricultural Policy University of Illinois September 16, 2005.
Negotiations on Agriculture State of Play by Surabhi Mittal WTO &The Doha Round : The Way Forward 6-7 April, 2006.
Overview and Current Status of the Doha Work Program and Negotiations Southern Agricultural Economics Association Annual Meetings Orlando, FL, February.
1 Agriculture in July Package: Nepal Presentation by South Asia Watch on Trade Economics and Environment (SAWTEE), Kathmandu.
Status of the Doha Round and Agricultural Policy Reform Robert L. Thompson Chairman International Food & Agric. Trade Policy Council and Gardner Chair.
1 Nepal’s WTO Membership and the Agriculture Sector Navin Dahal South Asia Watch on Trade Economics and Environment.
IPC Seminar Multilateral Trade Negotiations: Update on The Doha Development Round MARCELO REGUNAGA Hanoi – October 2005.
A RETROSPECTIVE ON THE DOHA ROUND OF WTO TRADE NEGOTIATIONS Robert L. Thompson ACE Department Seminar January 26, 2007.
The Doha Development Agenda, Taking Stock A European Perspective Rolf Moehler former Deputy Director-General for Agriculture of the European Commission.
Prospects for U.S. Agriculture in the Doha Round of WTO Trade Negotiations Robert L. Thompson Gardner Professor of Agricultural Policy University of Illinois.
International Policy Live in a global economy where: –Interdependence means that any policy decisions made by one country has a impact on the U.S. –Many.
Agricultural Trade, WTO and the Doha Round: What is the relevance of CAP reform? Tassos Haniotis Head of Unit Agricultural Trade Policy Analysis DG for.
The Economics and Politics of U.S. Agricultural Policy James Dunn Pennsylvania State University.
The Doha Development Agenda: Progress Or Process? Parr Rosson Professor & Director Center for North American Studies Department of Agricultural Economics.
1 WTO Impacts on U.S. Farm Policy U.S. Views on WTO Domestic Policy Obligations New Orleans, Louisiana June 3, 2005 The U.S. Sugar Industry: Status and.
Agriculture Negotiations: Moving Forward Ashok Gulati IFPRI Director in Asia WTO and The Doha Round: The Way forward ICRIER-SRTT Conference 6-7 April,
The 2007 Farm Bill: Key Drivers & Prospects Robert L. Thompson Gardner Professor of Agricultural Policy University of Illinois September 9, 2005.
“July Package” & South Asian Agriculture Prof. J. George Faculty of Economics & Development Planning (FEDP), Haryana Institute of Public Administration,
AG -1 © WTO – OMC 2012 The WTO Agreement on Agriculture Serafino Marchese, Chief, Training and Capacity Building Section WTO Institute for Training and.
1 Implications of a Doha Agreement for Agricultural Markets in Sudan Imad Eldin Elfadil Abdel Karim University of Khartoum - Sudan David Abler Penn State.
Impact on EU agriculture of Falconer’s draft modalities DG for Agriculture and Rural Development European Commission.
Prosperity Through Trade North American Agri-Food Integration Session II - The European Perspective Discussant Liam McCreery, President Canadian Agri-Food.
Agricultural Trade, Rural Development, and Policy Coherence Association for International Agriculture and Rural Development June 7, 2004 John Nash The.
Ag Policy, Lecture 6 Knutson, Penn, & Flinchbaugh, Chapter 5 World Trade Organization Review.
Legislative Issues, WTO, & U.S. Farm Policy Presented by Chip Conley Democratic Economist House Agriculture Committee.
Budgetary, Political, and WTO Forces on the Next Farm Bill July 7, 2005 Agricultural Policy Summit “New Directions in Federal Farm Policy: Issues for the.
OECD World Forum “Statistics, Knowledge and Policy”, Palermo, November
“The Domestic Politics of Trade: A U.S. Farmers View” Ron Heck, President American Soybean Association “Agricultural Trade Negotiations: Politics and Prospects”
Corn and Soybean Issues for 2006 Bruce A. Babcock Center for Agricultural and Rural Development Iowa State University Presented at.
WTO Status of Negotiation, July 2004 Framework... and Beyond Debra Henke USDA/ Foreign Agricultural Service.
Weaving the Next Agricultural Safety Net Bruce A. Babcock Center for Agricultural and Rural Development Iowa State University Presented.
Twenty-Five Ways to Improve the Derbez Draft International Food and Agriculture Trade Policy Council
Eric Wailes and Alvaro Durand-Morat University of Arkansas, Division of Agriculture Impacts of WTO Policy on U.S. Rice Policy.
The 2007 U.S. Farm Bill: Issues and Challenges Won W. Koo Chamber of Commerce Distinguished Professor and Director Center for Agricultural Policy and Trade.
Multilateral Trade Negotiations: Update on The Doha Development Round A European Perspective Dr Rolf Moehler.
The EU’s CAP and the likely impact of a Doha Agreement
The Potential Impact of the Doha Round on Grains
The 2007 Farm Bill: More of the Same or a New Path?
WTO Support Commitments and U.S. Farm Policies
Bashir A. Qasmi Evert Van der Sluis
European agriculture, the future of the CAP and the WTO negotiations
The EU-US Agricultural Framework Agreement
Agriculture in the July Framework
Presentation transcript:

The Doha Round of WTO Negotiations: The U.S. Perspective Robert L. Thompson Chairman International Food & Agricultural Trade Policy Council and Gardner Professor of Agricultural Policy University of Illinois at Urbana-Champaign 31 October 2005

There Is No ONE U.S. Perspective U.S. agriculture is large and heterogeneous across many agro-ecosystems In general U.S. agriculture is export-oriented since it produces one-third more than the U.S. consumes. –Increasing market access and expanding the total size of the world market are important priorities There are also highly subsidized products produced behind protectionist barriers to imports. –They oppose liberalization and cuts in their subsidies Exports of processed and high value agricultural exports growing faster than raw bulk commodities

U.S. Producer Support Estimates, (Percent of producers’ gross revenue) Sugar 58 Milk 44 Rice 44 Sorghum 37 Wheat 34 Barley 30 Corn 20 Soybean 19 Wool and lamb 17 Pork, beef and broilers 4 Overall 19 Source: OECD PSE database

World Agriculture in Disarray Import protection and producer supports –Distort what gets produced where and, in turn, agricultural trade flows –Depress world market prices below long-term trend –Reduce price and/or income risk to one country’s farmers while increasing price volatility in world market –Largest producers and farm land owners get most of the benefits

OECD Producer Support Estimates, 2004, Percent of Gross Receipts Switzerland 68 Japan 56 European Union 33 Canada 21 United States 18 Mexico 17 Australia 4 New Zealand 3 30 Countries Overall 30 Source: OECD Agriculture Directorate

Average Producer Support, OECD Countries, 2004, Percent of Gross Revenue Rice 75 Sugar 58 Milk 36 Beef & Veal 34 Wheat 33 Corn 31 Oilseeds 27 Pork 21 Eggs 9 Overall 30

“A successful Doha Round will reduce and eliminate tariffs and other barriers on farm and industrial goods. It will end unfair agricultural subsidies…. We must work together in the Doha negotiations to eliminate agricultural subsidies that distort trade and stunt development, and to eliminate tariffs and other barriers to open markets for farmers around the world…. The United States is ready to eliminate all tariffs, subsidies and other barriers to free flow of goods and service as other nations do the same.” George W. Bush United Nations 14 September 2005

Overall Domestic Support Present: Categorizes all support policies in one of three boxes, with only amber box total (“aggregate measure of support (AMS)”) capped. U.S. proposes: –Cap blue box, trade-distorting de minimis, and non-trade distorting de minimis each at 2.5% of agricultural GDP –Cap sum of amber box + blue box + trade-distorting de minimis + non-trade distorting de minimis policies, and reduce this total 75% (less for countries with lower total subsidies). This would significantly increase maximum allowed support in US and EU! Very large cuts would be required to cause any reduction in actual support. U.S. proposes 75% for highest subsidizers, with declining percentages for lower subsidizers)

Amber Box Framework Agreement said “Substantial reduction in the overall level of its trade-distorting support from bound levels” U.S. proposes –Full phase out over 15 years: 60% in first 5 years; rest in last 5 years, with higher/lower % reductions in countries where higher/lower AMS. –Product-specific caps at levels Open issue –Highest levels of support reduced the most? E.g., rice, cotton, sugar; dairy in the U.S.

Blue Box Present: Trade-distorting policies that have measures that offset their production-inducing effect, e.g. set-aside or quota on production or sales. No cap at present. Tentatively agreed in Framework Agreement: –Broaden to include “direct payments that do not require production,” e.g. counter-cyclical payments [no link to current production, but per unit payment is based on current market price; therefore, not green box]. U.S. proposal: Redefine blue box and cap at 2.5% of total value of all national ag production (including non-program crops).

Green Box Present: No cap. Doha Round likely to encourage shifting as much money as possible from amber to green box payments. –Essential not to cause a land price collapse Brazil cotton case affirmed that direct payments are “green” only if there are no constraints whatsoever on what can be grown on land receiving payments. –U.S. must either delete fruit & vegetable exclusion or include direct payments in amber box Open issue: Tighten definition of “minimally trade-distorting”

Market Access The most difficult pillar on which the least has been agreed to date Framework Agreement says: –Substantial increase in market access though tariff cuts or tariff rate quota (TRQ) expansion –Categorize all tariffs into “bands,” each with a different reduction formula, with the highest tariffs to be reduced the most. –Allow each country to designate an “appropriate number” of (politically) “sensitive products” on which smaller cuts can be made. –Increase tariff-rate quotas (TRQs) on “sensitive products” on which tariffs are cut less than formula would otherwise require. –Make cuts from bound rates. –Allow developing countries to use “special safeguard” –Developing countries can make smaller cuts over longer period

Market Access (cont’d.) U.S. proposal would –Reduce tariffs by 55-90% (highest tariffs cut the most) –Cap tariffs at 75% in high income countries (a little higher cap elsewhere) –Limit “sensitive products” to less than 1% of tariff lines “with full compensation” via TRQ expansion –Allow “developing countries” Special Safeguard and Special Products –Internationally competitive developing countries must provide meaningful increase in access to their markets FYI: U.S. has TRQs on sugar, dairy, cotton, peanuts, and beef.

Export Subsidies Present: Cap on volume and value of export subsidies on agricultural policies. The E.U. has agreed to eliminate all direct agricultural export subsidies by a (yet to be agreed) date certain WTO Cotton Case mandated that the U.S. must eliminate subsidy component in export credits and export credit guarantees (marketing loans?) Conditions yet to be agreed: –Date: U.S. proposes –Eliminate subsidy element in U.S. food aid –Mode of operation of state-trading enterprises (STEs), e.g. Canadian Wheat Board, must preclude possibility to subsidize exports.

Special & Differential Treatment of Developing Countries Allow smaller cuts phased in over a longer period Allow each developing country to designate a (yet to be defined) number of “special products” that can be protected Exempt LDCs completely from adjustment ???? There remains politically divisive issue of definition of “developing country” (as opposed to a least developed country (LDC)).

Conclusions Writing the next U.S. Farm Bill and completing the Doha Round negotiations are on the same time table – mid Changes in U.S. farm policy are generally evolutionary, not revolutionary BUT, there are a number of forces that could bring bigger changes in 2007: –Federal budget deficit –WTO trade negotiations –Public perception that farm programs are not achieving their objectives The most-discussed alternatives involve moving dollars from the amber box to the green box, e.g. –Some form of subsidized gross income insurance –Payments for conservation or environmental services –Rural infrastructure investments