By Aileen Kwa
Para 5 – “there has been some convergence concerning the reductions in Final Bound Total AMS, the overall cut in trade distorting domestic support and in both product-specific and non product-specific de minimis limits”.
Implication of Para 5: “Convergence” implies that there is acceptance of the offers on the table, primarily the US and EU offers to “cut” domestic supports. Unfortunately, both US and EU offers are simply “paper cuts”. These offers cut into the overly generous “bound” or allowable levels of support US and EU had provided themselves in the Uruguay Round. They do not actually cut into the applied levels of supports. The entire exercise is one of “box-shifting”, shifting supposedly “non-trade distorting” supports into the “Green” or “Blue Box”.
If this language is accepted, post-Hong Kong, it would be much more difficult to demand that US and EU reduce their supports. These offers only cut into the money US and EU are allowed to spend (because they gave themselves a very high allowance in the Uruguay Round) but do not currently spend. For both US and EU, their offers do not cut into the actual supports they provide.
The US currently provides “trade-distorting” supports of US$ 21 billion. In spite their “offer” to cut “trade-distorting” supports of up to 60%, their “offer” would still allow them to provide up to US$23 billion in that category of supports. Similarly, EU has offered to cut trade distorting supports by 70%, yet this will allow them to increase supports by about 15 or so billion.
US supports amount to approximately US$74 billion per year, and that of the EU is close to 90 billion Euros per year. These overall levels of supports will be retained and the current dumping by US and EU in cotton, rice, wheat, diary, soy, beef, corn, will be maintained.
The paragraph has implications for the “cotton countries” since the US has said repeatedly that it will only treat cotton as part of the overall agriculture modalities.
US and EU are defensive about their domestic supports and this is a leverage the developing countries have over them and should use in the negotiations to bargain for broad flexibilities (e.g. broad Special Products [SP] and Special Safeguard Mechanism [SSM] provisions). Developing countries should not give this leverage away, whilst the language for SP and SSM (para 7) remains vague.
Para 7: In addition, the Special Products (SPs) and Special Safeguard Mechanism language (para 7) leaves much to be desired. There is very different treatment between Sensitive Products (which the EC wants) vs. language on SPs which developing countries want. There is no discussion on criteria in sensitive products. But in SPs, the text states that the designation of SPs will be “based on the critieria of food security, livelihood security and rural development”. The issues of food security etc are very specific to local conditions and now the WTO wants to define what food security and livelihood security are. Developing countries should not agree to any language refering to “criteria”.