1. WTO AGRICULTURAL NEGOTIATIONS Portfolio Committee Agriculture and Land Affairs April 2003 Günter Müller Directorate: International Trade National Department of Agriculture

2. WTO Agricultural Negotiations Part of the broader WTO Round launched in Doha, Qatar in November 2001 by the 4 th WTO Ministerial Meeting WTO Round: “Doha Development Agenda” Agriculture is a critical part of broader negotiations 4 th WTO Ministerial agreed on a detailed mandate for the agricultural negotiations Agreed on a schedule for the negotiations

3. Doha Decisions on Agriculture (“Mandate”) Building on the work carried out to date:  Substantial improvement in market access  Reductions of, with a view to phasing out, all forms of export subsidies  Substantial reductions in trade distorting domestic support  Special and differential treatment for developing countries  Non-trade concerns will be taken into account

4. WTO AGRICULTURAL NEGOTIATIONS Agricultural negotiations chaired by Ambassador Stuart Harbinson (Hong Kong) Meetings in Geneva in informal and formal negotiation sessions with broad, active participation, also by developing countries First Modalities Draft Paper by Chair: 12 February 2003 According to schedule: Agreement should have been reached on modalities by 31 March 2003. Modalities:framework/structure for commitments by individual WTO members, e.g. formula for tariff reductions, size of reduction in domestic support, time frame for eliminations of export subsidies

5. WTO AGRICULTURAL NEGOTIATIONS Major Negotiation Issues Market Access: Level of tariff reductions, special treatment for certain products, Safe Guard Clause, Tariff Preferences Domestic Support: Level of reduction in support, Non-trade concerns, definition of “boxes” amber, blue and green Export Competition: Elimination or not of export subsidies, time frame, handling of export credits, state trading enterprises Positions of WTO members on these and other negotiation issues far from reaching a compromise

6. WTO AGRICULTURAL NEGOTIATIONS Harbinson Draft (released February 2003) Based on work carried out with the objective to build bridges and “attempt to identify possible paths to solutions” Text was discussed during special negotiation sessions in Geneva in February and March with very little sign of progress towards an agreement WTO Membership is split mainly on the level of ambition Agriculture one of various deadlines in the broad WTO Round that has been missed

7. WTO AGRICULTURAL NEGOTIATIONS RSA Objectives (summarized) Domestic support: provide for the development of historicaly disadvantages farmers, rural and farming communities, and, facilitate a substantial reduction in current high levels of support to bring about real structural change in developed countries. Market Access: Substantial improvement in market access in targeted markets for South African agricultural products with export potential Export Competition: Elimination of all export subsidies (included subsidies under export credits) over the shortest period of time possible Link between further market access commitments by RSA and substantial reduction in domestic support by developed countries

8. WTO AGRICULTURAL NEGOTIATIONS RSA Approach Approach negotiations from a development perspective Close consultation and co-operation with SACU and SADC Active participation in Africa Group Active participation in Cairns Group

9. WTO AGRICULTURAL NEGOTIATIONS Harbinson draft modalities

10. HARBINSON TEXT: TARIFFS Developed Countries (reduce over 5 years) Original tariffAverage reduction Minimum per line 90 +6045 15 - 905035 15 -4025

11. TARIFFS Developing Countries (reduce over 10 years) Original tariffAverage reduction Minimum per line 120 +4030 20 - 1203323 20 -2717 SP (? % of agri products) Food + livelihood security, rural development 105

12. HARBINSON TEXT Harbinson UR Formula Developed Countries  500% Tariff peaks? Not addressed Tariff escalation? Reduction to be higher on processed product Flexibility  275% Developing countries  500% Tariff peaks? Tariff escalation? SP products to be reduced by an average of 10% with minimum of 5% per line  475%

13. SACU IMPORTS: 2001 Duties: Major Products

14. RSA IMPORTS 2001

15. AVERAGE TARIFFS ON RSA EXPORTS EXAMPLES (%)

16. RSA EXPORTS 2001

17. Market Access (other) Preferential Schemes  tariffs of products of vital interest to developing countries may be reduced over 8 instead of 5 years  Erosion of preferences: major topic for negotiations Tariff Quota volume Developed Countries  Increase to 10% of consumption over 5 years (additional flexibility) Developing Countries  Increase to 6.6% over 10years (additional flexibility) In quota tariff: No proposal

18. Market Access Safeguard Clause – Article 5 Will be phased-out for developed countries after 5 years New provision for SP products developing countries based on Article 5 of AoA, detail to be agreed Debate: Countervailing measure for developing countries to act against subsidized imports Non-Trade Concerns GIs, Animal welfare, food safety

19. Export Competition Export Subsidies 50%: to zero in 5 years 50% to zero in 9 years Improved rules Export Credits Food Aid State Trading Export Enterprises Export Restrictions and Taxes

20. Export Competition Commitment and expenditure in US $m

21. Domestic Support Green Box  No major changes Blue Box  Capped at 1999 – 2001 level and reduced by 50% over 5 years  Alternative: included in amber box Amber Box  To be reduced by 60% over 5 years De Minimis  Developed countries: reduce from current 5% to 2.5% over 5 years  Developing countries: maintain 10% level Article 6.2 (input subsidies, developing countries)  To be maintained and enhanced

25. WTO AGRICULTURAL NEGOTIATIONS Negotiation time frame and deadlines Agreement on Modalities: 31 March 2001 Tabling of draft country schedules by the 5 th Ministerial Meeting in Mexico (September 2003) Conclusion of Round by 1 January 2005

26. WTO AGRICULTURAL NEGOTIATIONS Contentious Issues Level of ambition Special flexibility to developing countries Scope of negotiations