1. Agriculture in the July Framework
Navin Dahal
South Asia Watch on Trade, Economics and Environment (SAWTEE)
5/31/2019

2. Framework Agreement
Reform in all three pillars form an interconnected whole and to be approached in balanced and equitable manner
Operationally effective and meaningful provisions for SDT for developing country member
5/31/2019

3. Market Access Tiered Formula for tariff reduction
Bound rates as starting points
Progressivity – deeper cuts in higher tariffs
Proportionality
special and differential treatment for developing countries
No reduction commitments for LDCs
Special products
Flexibility – Sensitive products
5/31/2019

4. Market Access Reduction or elimination of in-quota tariff rates
Operationally effective improvement in tariff quota administration
Tariff escalation to be addressed through a formula to be agreed
5/31/2019

5. Sensitive Products
“Without undermining the overall objective of the tiered approach” appropriate number of tariff lines to be treated as sensitive
Substantial improvement will apply to each product
Substantial improvement to be achieved through
Tariff quota commitments
MFN-based tariff quota expansion for all such products
5/31/2019

6. To be Determined Structure of the tiered formula
Selection criteria for sensitive products
Selection criteria for special products
Approach to Tariff Escalation
Approach to tariff simplification
Approach to SSM
Approach to Preference Erosion
5/31/2019

7. Market Access Issues Ad-valorem equivalents Sensitive Products
Number of Products
Selection criteria
Implications of tariff profiles
SSM for developing countries
Tariff line (six digit /eight digit level)
5/31/2019

8. Tariff Structures Bound Tariffs
USA
EU-15
INDIA
Mean
12%
29%
117%
Maximum
350%
277%
300%
Minimum 0%
10%
# Tariff lines
1,829
2,091
692
T = 0%
388
399
0% < T >30%
1,247
1,060 24
30%<T>100%
139
480
422
T >100% 28
152
246
5/31/2019

9. Products with High Tariffs
USA
EU-15
INDIA
Dairy
Meat of Bovine & Pork
Nuts
Grapes
Pork
Wheat
Peanuts
Vegetable oil
Sugar
Banana
Beverages
Tobacco
Processed Cereal Grains
Prepared vegetables….
5/31/2019

10. South Asia
Tariff only protection as non of the countries have TRQs (EU 87, US 54)
SA countries do not have the right to use Special Safeguards SSGs (EU 539, US 189)
Progress in other pillars also to be considered in the final discussion on the magnitude of tariff reductions
5/31/2019

11. Developing Countries
Proportionality – tariff reduction/quota expansion
Longer implementation periods
Number and treatment of sensitive products
Special products – self determination
SSM
5/31/2019

12. LDCs Not required to reduce tariff
Developed and developing country Members should provide duty free and quota-free access to markets for products originating from LDCs
Key Goal – Maintain tariff preference levels
5/31/2019

13. Domestic Support
Overall Support – To be reduced using a tiered formula
Bound level as starting point
Final bound total AMS – To be reduced using a tiered formula
Blue Box – Expanded
De Minimis – Reduced
Green Box Measures – Reviewed
5/31/2019

14. Overall Reduction
Tiered formula to be used to reduce overall sum of all trade distorting domestic support (AMS+permitted de minimis level + Blue Box)
Harmonization – Higher levels to be reduced more
20 % reduction in year 1
5/31/2019

15. Final Bound AMS To be reduced substantially Harmonization
Product-specific AMS to be capped
Greater than formula reductions may be required to achieve required level of cut in overall support
SDT – longer implementation period and lower reduction coefficients
5/31/2019

16. Blue Box Article 6.5 to be reviewed
Additional measure inserted – Direct payments not related to production if unchanged fixed base and payments to 85% or less area
Blue Box support not to exceed 5% of total VoAP
Some flexibility to large current users
5/31/2019

17. The De Minimis Provision
Reduction to be negotiated,taking into account SDT
Support to LIRP in developing countries to be exempt
Greater than formula reduction may be necessary to achieve required level of cut in overall support
SDT – longer implementation period and lower reduction coefficients
5/31/2019

18. Green Box Measures Criteria to be reviewed
The basic concepts, principles and effectiveness of Green Box to remain
Take due account of non trade concerns
5/31/2019

19. Domestic Support Negotiation Dynamics
No SA country has AMS reduction commitment
EU 15 - high total De Minimis and Blue Box
US – High AMS and De Minimis
India – PS AMS Negative, 5.68% VoAP under Art. 6.2 (1997)
Pakistan - PS AMS Negative - (1999)
De Minimis – Future flexibility
5/31/2019

20. Export Competition Export subsidies Export credit
Trade Monopolies – STEs
Food Aid abuse
5/31/2019

21. Export Subsidies No SA country has right to use ES (EU - 20, US – 13)
Share of Total ES notified to the WTO ( ) EU 25 – 90%, Sw’land –5%, USA 1.4%
Share of Total ES notified to the WTO ( ) Dairy 35%, Beef 18%, Sugar 11%, Grains 14%.
To be eliminated as scheduled by the end date to be agreed
SDT 1 – Longer implementation period
SDT 2 – Continued access to the provision under Article 9.4 of the AoA for a reasonable period to be negotiated
5/31/2019

22. Export Credits
Share of EC (1998) – USA 49%, Australia 20%, EU 15 16%, Canada 14%
Share of EC – Cereals 28%, Livestock products 16%, Vegetable products 16%, Processed Products 10%
Export credits, export credit guarantees or insurance programs with repayment periods beyond 180 days will be eliminated by the end date to be agreed
5/31/2019

23. Export Credits
EC, ECG or insurance programs with repayment periods of 180 days and below will be eliminated if their terms and conditions are not in accordance with disciplines to be agreed. These disciplines will cover, inter alia:
Payment of interest
Minimum interest rates
Minimum premium requirements
Other elements that can constitute subsidies or otherwise distort trade
5/31/2019

24. Export Credits SDT 1 – Longer implementation period
SDT 2 – Disciplines on EC, ECG or IP to be agreed will make appropriate provisions for differential treatment in favour of LDCs and NFIDCs
5/31/2019

25. Exporting STEs
Trade distorting practices with respect to exporting STEs, will be eliminated, including export subsidies provided to or by them, government financing,and underwriting of losses
The issues of the future of monopoly powers will be subject to further negotiation
SDT 1 – Longer implementation period
SDT 2 – STEs in developing countries that enjoy special privileges to preserve domestic consumer price stability and ensure food security will receive special consideration for maintaining monopoly status
5/31/2019

26. Food Aid
Elimination of food aid provision that is not in conformity with operationally effective discipline to be agreed.The objective of such disciplines will be to prevent commercial displacement.
The role of international organisations as regards the provision of food aid by Members, including related humanitarian and developmental issues, will be addressed in the negotiations
The question of providing food aid exclusively in fully grant form will also be addressed in the negotiations
5/31/2019

27. Export Competition Issues
End date
Parallel Elimination
Transparency
SDT
5/31/2019

28. Negotiation Dynamics
US defensive interest on Domestic support and offensive interest on Market Access in developing countries
EU defensive interest on Market Access
EU-US interest on Export competition
5/31/2019

29. Consequence for SA Countries
Minimal gain in export competition
No or minimal gain in reduction in Domestic support
No gain in market access in developed country markets
Undermine their defensive position in Market Access
Preference Erosion
5/31/2019