1. Agriculture Negotiations: Moving Forward Ashok Gulati IFPRI Director in Asia WTO and The Doha Round: The Way forward ICRIER-SRTT Conference 6-7 April, 2006, ITPO, New Delhi.

2. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2 Key Questions for India (and developing countries like India) Doha outcome: More or less ambitious? A hollow outcome: missed opportunity for Doha as a development round? Should one play defensive or pro- active? Peace Clause is dead: Can one use it to put pressure in the negotiations?

3. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 3 Domestic Support- Issues in Negotiations Tiered formula for cuts on overall level of trade distorting support Tiered formula for cuts in AMS Capping of product specific AMS Reduction of de minimis Review of criteria for Blue Box and Green Box Lower reduction coefficient and longer implementation period for developing countries

4. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 4 Example US: Falling Commitment levels but rising actual AMS Source: Hoda and Gulati, forthcoming: WTO, Agricultural Negotiations, and Developing Countries: Lessons from the Indian Experience

5. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 5 Source: Hoda and Gulati, forthcoming: WTO, Agricultural Negotiations, and Developing Countries: Lessons from the Indian Experience Example US: Falling World Prices and Increasing Domestic Support for rice (similar story for cotton and many other products)

6. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 6 Suggestions on Domestic Support Tiered formula for cut in overall Trade Distorting Support (to say 5% of value of production) most important. Total AMS, Product Specific AMS, De minimis and Blue Box should get squeezed. Developing countries can accept a low limit for overall TDS. Green Box criteria: it is important to propose that direct payments be limited to small farmers.

7. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 7 Issues in Market Access Basic approach: toward progressive reduction Tiered formula for reduction of tariffs Sensitive products (???) Special products (???) Special Safeguards Mechanism

8. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 8 Defensive means hollow outcome If one per cent of tariff lines are categorized as sensitive or special products, 75% of potential gains from trade liberalization are lost (Bouet, 2006) In that case, Doha round can not be a “development” round. If deeper cuts in tariffs realized, Special safeguards would be needed by all.

9. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 9 Example Switzerland: Concentration of high Bound duties in 1% of tariff lines, 2001 Source: Antoine Bouët, “WHAT CAN THE POOR EXPECT FROM TRADE LIBERALIZATION? OPENING THE “BLACK BOX” OF TRADE MODELING”, forthcoming

10. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 10 Example India: Surges in Vegetable oil imports (SSM needed if peak tariffs capped a low levels) Source: Hoda and Gulati, forthcoming: WTO, Agricultural Negotiations, and Developing Countries: Lessons from the Indian Experience

11. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 11 Suggestions on Market Access Capping is critical Any reasonable reduction Special and sensitive Products: Self selection would be credible only if products are extremely limited in number Maximum reliance on SSM

12. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 12 Issues in Export Competition Implementation period for elimination of direct export subsidies Disciplines on export credit, export credit guarantees and insurance programmes less than 180 days Disciplines on food aid Disciplines on State Trading Enterprises S&D treatment of developing countries

13. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 13 Suggestions on Export Competition Suggested period of 5 years for elimination of direct export subsidies should be maintained While developing disciplines on export credit for under 180 days the possibility of any exceptions or looseness should be ruled out For food aid fundamental changes are necessary The exporting STEs should not have monopoly powers For S&D treatment by way of longer period should be with reference to the period of elimination

14. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 14 Way Ahead: Strategies and Options Developing Countries' offer of tariff cuts must be conditional on steep cut of domestic support of US and EU. Domestic support disciplines must be simplified. The current structure based on the three boxes is complex and ambiguous. To identify well-targeted and transparent exempt measures that minimizes trade distortion.