1. ACHIEVING AGRICULTURAL DEVELOPMENT THROUGH AGRICULTURAL TRADE What do Developing Countries Need From Trade Negotiations? By Percy W. Misika 29 February 2004

2. STRUCTURE  Introduction  Current World Agricultural Trade developments  WTO Agreement on Agriculture –The three pillars of the AoA –Deficiencies within the AoA  The Doha Development Agenda  The needs of developing countries –Procedural principles –Overall negotiations outcome –Specific negotiation outcomes  Conclusion

3. INTRODUCTION  Focus on needs of developing countries from Agricultural Trade Negotiations  Developing countries` needs and concerns are diverse and complex  One-size-fits-all principle is not applicable (Focus on Namibia’s needs)  Focus on Multilateral (WTO) Agricultural Trade Negotiations

4. CURRENT WORLD AGRIC. TRADE DEVELOPMENTS  Share of world total agricultural exports  Agriculture accounts >50% of export earnings for 40 developing countries  Agricultural exports from ACP account for only 4% of EU market Western Europe 42.7% Africa1.4% Latin America 0.6%

5. FACTORS CAUSING IMBALANCED AGRIC. TRADE  Unfair provisions within the WTO AoA  Capacity constraints  Limited/lack of financial resources  Limitations in technological transfer  Trade inhibiting SPS measures  Trade distorting support measures  Limited research and development  Institutional weaknesses in terms of legislation, organizational structures & policy implementation

6. THE AOA (3 Pillars)  Concluded & signed on 15 April 1994  Came into force on 1 January 1995.  The implementation period: –6 years for developed countries –10 years for developing countries.  Market access (measure limiting / facilitating access to markets in terms of market entry and market share  Domestic support (production support subsidies) –Green box –Blue box –Amber box Traffic robot lights Has anyone ever wondered why there is no red colour in the market access robot?

7. Cont…  Export competition –export subsidies –Export credits –Export insurances –State trading enterprises (STE) –Food aid

8. DEFICIENCES WITHIN THE AoA  Trade –High tariffs; tariff escalation; tariff peaks and non-tariff barriers within developed countries, e.g. import licences, import quotas, minimum import prices; and technical barriers to trade e.g. SPS measures, animal welfare standards, food safety standards, labour standards, etc.  Policies –Developed countries use massive support measures at the expense of developing countries –Safeguard measures against unfair competition costly and complex

9. Cont…  Food security –Sustainable food security compromised by depressed commodity prices in developing countries –May lead to balance of payment difficulties in the long-term –The non operationalization of the Marrakesh Decision favoring NFIDC’s

10. THE DOHA DEVELOPMENT AGENDA (DDA)  Based on para 13 & 14 of Doha Ministerial Declaration (DMD)  Comprehensive negotiations aimed at: –Substantial improvements in market access –Reductions of, with a view to phasing out all forms of export subsidies –Substantial reductions in trade-distorting domestic support

11. Cont… –S&DT integral part of all elements of the negotiations –NTC to be taken into account –Set modalities by 31 March 2003 –Establish new AoA by January 2005

12. THE NEEDS OF DEVELOPING COUNTRIES What do developing countries need from Agricultural Trade Negotiations? Procedural principles  Fair procedures to ensure a fair outcome –Transparency –Inclusiveness –Non Discrimination –Equality –Balance –Fairness –Flexibility

13. Proof of process fairness Widen the inter-sessional consultationsWiden the inter-sessional consultations Ensure fair representation of all all developmental groupings of countries, i.e. developed, developing, least developed, net food importing developing, highly indebted poor, and small island developing countriesEnsure fair representation of all all developmental groupings of countries, i.e. developed, developing, least developed, net food importing developing, highly indebted poor, and small island developing countries Do away with the notion of the chosen few so- called green room or even better back- door consultations;Do away with the notion of the chosen few so- called green room or even better back- door consultations; Do away with so-called Chairpersons` texts produced on their “own responsibility” as this highly exclusive practice defeats the very purpose of the negotiations.Do away with so-called Chairpersons` texts produced on their “own responsibility” as this highly exclusive practice defeats the very purpose of the negotiations.

14. Cont… Capacity building, technical assistanceCapacity building, technical assistance Accord equal weight or importance to the viewpoints of all Member StatesAccord equal weight or importance to the viewpoints of all Member States Ensure meaningful and effective cross linkages in all areas of the single undertaking negotiations (win-win concept),Ensure meaningful and effective cross linkages in all areas of the single undertaking negotiations (win-win concept), Accord developing countries sufficient requisite flexibility to take account of their development needs.Accord developing countries sufficient requisite flexibility to take account of their development needs.

15. OVERALL NEGOTIATIONS OUTCOMES  A Multilateral Development Oriented Doha Round Agreement on Agriculture  Minister fought and achieved this in Doha  Deviation from DDA principles a betrayal of Minister’s confidence in negotiators  No multilateral AoA means Rule of the Jungle

16. SPECIFIC NEGOTIATIONS OUTCOMES 4 key imperatives  Trade a means to an end, not an end in itself  Agriculture is the engine for development in most developing countries  Political will and commitment to redress world trade imbalances and deficiencies  Flexibility be accorded to developing countries to pursue their agricultural development and food security policies (SSM and SP concept),

17. Specific negotiation outcomes in each pillar of AoA

18. Amber Box  Significant reductions in total AMS, as these have not been binding at all  Further limitations on switching support between products, preferably making AMS reduction commitments product-specific (disagregation)  Elimination or reduction of de minimis allowances for developed countries  As S&D, maintain current level of de minimis for developing countries  Burying once and for all the now expired or “dead” peace/due restraint clause (Article 13)

19. BLUE BOX Blair House (EU/ USA Compromise)  Acknowledge these measures are trade-distorting and count them under Current Total AMS for reduction purposes over an agreed period of time, if not phasing them out completely.

20. GREEN BOX  Tightening of the criteria for inclusion in the green box, including a more concise/measurable notion of what is "minimal effect on production and trade".

21. EXPORT COMPETITION  Substantial reduction or elimination of export subsidies that displace domestic production, with due consideration of possible negative effects (e.g. strengthening the Marrakesh Decision on NFIDC’s) in order to help food importers adjust to change  Subjecting all forms of export support to the same provisions accorded to export subsidies  Provision of food aid in fully grant form

22. Cont…  Extension of clause 9.4 (marketing and internal transport and freight costs)  Longer implementation period coupled with low repayment interest rates of export credits  Allowing developing countries to impose temporary export restrictions for food security and rural development

23. MARKET ACCESS  Substantial reduction, with a view to, phasing out tariff peaks, escalation and high tariffs in developed economies;  Uniform internationally accepted SPS regulations coupled with financial and technical assistance to developing countries to achieve compliance with set international standards;  As S&D accord countries that benefit from preferences a period of time to adjust and make the required structural adjustments;  Eliminate SSG for developed countries (38 countries)

24. Cont…  Provide minimum market access volumes for special products of developing countries into the markets of developed countries (X% of domestic consumption);  Provide duty and quota free market access for agricultural products originating from least developed countries in all developed countries; and  Provide for longer implementation time periods and lower tariff cuts for developing countries.

25. OTHER AREAS  Other needs are: –Continued technical assistance and capacity building –Institutional support to effectively implement SPS standards

26. CONCLUSION  There is an urgent need for an “All Inclusive trade coalition” using an “All inclusive world agriculture trade strategy”, if mankind is to rid the developing world of: –Poverty –Malnutrition –And the scourge of hunger

27. THE END