1. Doha Agriculture Negotiations State of Play May 2009

2. 2 2000 Agriculture talks start – Built-in Agenda (Art 20 of the AoA) 2001 Doha Negotiations launched (DDA) 2004 “July Framework” 2003 Cancún Ministerial – failure to conclude modalities July 2006 – draft modalities (W/3) – negotiations suspended Agriculture Negotiations – Timeline 2005 Hong Kong Ministerial Late 2006 – “Quiet diplomacy” Fall 2007 – intensive negotiations March 2003 - Modalities deadline missed Early 2007 – Resumption of negotiations Feb - May 2008 - revised draft modalities W/4/Rev.1, Rev.2 & Rev.3 Dec 2008 – W/4/Rev.4 draft modalities Aug 2007 – revised draft modalities (W/4) July 2008 – failure to conclude modalities 2009?? The future: conclude modalities; scheduling; legal drafting; & DDA conclusion

3. 3 Big meetings, small meetings Negotiating Process concentric circles ‘Inclusive’: all coalitions represented in consultations ‘Transparent’: reps. report back to coalitions ‘Green Room’ - Informal small group consultations Key players, - reps. of all groups - hard bargaining, drafting Formal plenary - Full membership - Speeches/consensus decisions Informal, heads of delegations - All members, no record, reports from consultations, /reactions Bilateral, very small group consultations

4. 4 G–90 G-10 G-33 ACP LDCs Cairns Group G-20 Recent new African Group EU G-27 TROPICAL PRODUCTS (Bolivia) (Colombia) (Costa Rica) (Ecuador) El Salvador (Honduras) (Guatemala) (Nicaragua) (Panama) (Peru) (Venezuela) Chad Burkina Faso Burundi Togo Central African Rep Djibouti DR Congo Mali Gambia Guinea Guinea Bissau Lesotho Malawi Mauritania Niger Sierra Leone Rwanda Benin Madagascar Senegal Uganda Zambia Tanzania Belize Barbados Antigua/Barbuda Dominica DominicanRep Grenada Guyana St Vincent/Grenadines Trinidad/Tobago Jamaica Suriname St Kitts/Nevis St Lucia Gabon Ghana Namibia Honduras Mongolia Nicaragua Panama Sri Lanka Turkey El Salvador Nigeria Zimbabwe Botswana Cameroon Congo Côte d’Ivoire Kenya Mozambique Egypt Tunisia Morocco Angola Swaziland Mauritius R Korea Iceland Israel Japan Liechtenstein Norway Switzerland Ch Taipei Austria Belgium Bulgaria Cyprus CzechR Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden UK Mexico India China Venezuela Fiji Papua New Guinea Indonesia Pakistan Philippines Peru Cuba Haiti Australia Canada Colombia Costa Rica Guatemala Malaysia N Zealand Chile Brazil Bolivia Uruguay Thailand Paraguay Argentina Bangladesh Cambodia Maldives Myanmar Nepal HongKongCh MacaoCh Singapore Qatar UAE Brunei Kuwait Bahrain S Africa Solomon Islands US G–1 Albania Armenia Cape Verde (China) Croatia Ecuador FYR- Macedonia (Georgia) Jordan KyrgyzR Moldova (Mongolia) Oman (Panama) Saudi-Arabia (Ch Taipei) Viet Nam Tonga

5. 5 Positions  All issues are important but relative importance depends on Member and issue  All Members have offensive & defensive positions across the negotiations  Members form alliances – but often groups are not homogenous, including within developing countries Key to success – finding convergence

6. 6 Doha Negotiating Mandate  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  S&D - integral to all elements of the negotiations  Non-trade concerns to be taken into account

7. 7 TIERED FORMULA Tariff escalation (list) Tropical products (list) Minimum average cut (DdC) SVE flexibility Maximum average cut (DgC) LDC flex SENSITIVE PRODUCTS SPECIAL PRODUCTS (DgC) RAMs SP flexibility SVEs SP flexibility Commodities (case by case) MARKET ACCESS SSG SSM (DgC LDC products VRAMs and small low-income RAMs flexibility RAM flexibility Preference erosion

8. 8 TIERED FORMULA Threshold/Tier/Band (tariffs)Cuts 0-20%50% 20-50%57% 50-75%64% >75%70% Developed Country Tariff Cuts & Flexibility Overall minimum average cut of 54% Sensitive Products  In general, [4]% of tariff lines (Japan & Canada argue for more, plus some additional flexibility)  Lower tariff reductions but quid pro quo – tariff quota expansion Tariff Cap  100% on non-Sensitive Products (with possibility for limited exceptions)

9. 9 SVEsRAMs* Threshold/Tier/Band (tariffs) Cuts (2/3rds DdC cuts) Cuts 0-30%33.3%23.3%25.3%* 30-80%38%28%30% 80-130%42.7%32.7%34.7% >130%46.9%36.9%38.9% Developing Country Tiered Formula Cuts *No cuts if tariff less than or equal to 10% & very recent RAMs and small low- income RAMs with economies in transition exempt from reduction commitments Overall maximum average cut of 36% Tariff Cap  150% but doesn’t apply to Sensitive or Special Products

10. 10 Developing Country Flexibilities from Tiered Formula Special Products Treatment # TLs# zero cut TLsAverage SP cut DgC12%5%11% RAMs13%5%10% Sensitive Products  5.3% of tariff lines ( 1/3 rd more than DdC)  deviations from tariff formula with lower tariff quota expansion commitments than for DdC  Non-tariff quota expansion possibilities

11. 11 Small, Vulnerable Economies (SVEs) Tariff reduction flexibility Either (i)Apply moderated tiered cuts plus Sensitive Products flexibility plus Special Products flexibility OR (ii)Simply meet an average cut target of 24%

12. 12 Special Agricultural Safeguard  Developed countries – reduce coverage to 1% of schedule tariff lines on 1 st day of implementation  Remaining SSG coverage eliminated after 7 years  If a tariff line with the SSG is a Sensitive Product, must use greatest deviation (2/3rds) and tariff quota expansion (4%)  Developing countries – reduce coverage to 2.5% on 1 st day of implementation  SVEs – reduce coverage to 5% of tariff lines over 12 years

13. 13 SSM – Volume-based Thresholds (para 134) Remedies[1] 110%-115%25% current bnd tariff OR 25 percentage points 115%-135%40% current bnd tariff OR 40 percentage points >135%50% current bnd tariff OR 50 percentage points [1] Basis of rolling average of imports over 3 preceding years  Exceeding pre-Doha bindings - LDCs, SVEs and DgC  TN/AG/W/7 suggests 2 triggers & remedies for exceeding pre- Doha bindings (i)120% - 140% - 1/3rd of current bound or 8 percentage pts whichever is the higher (ii)>140% - ½ of current bound or 12 percentage pts whichever is the higher Other Issues  Length of remedy – 4/8 months; may be re-imposed after the lapse of 4/8 months (equal period of time must lapse)  Cross-check (not normally applicable if domestic price falling)  Limitation on scope (2.5% TLs?)

14. 14 SSM – Price-based TriggerRemedy 85% of three year monthly average 85% of difference between trigger price and import price max duty current bound duty  Applied on a shipment-by-shipment basis  Not normally take recourse if import volumes manifestly declining (cross-check)

15. 15 Tropical Products & Preference Erosion  Considerable progress made in July 08 mini-Ministerial  A lot depends on the outcome of the banana agreement  Chairman wanted to record progress in latest draft modalities text but due to “certain material changes” which occurred post July, the Chairman was unable to modify the draft modalities text  Existing text:  Tropical products – essentially seeking greater tariff reductions than under the tiered formula  Preference erosion – normally tariff reductions but greater implementation period

16. 16 Other Market Access Elements  Tariff escalation  Commodities – inter alia, if tariff escalation not eliminated, Members to engage with commodity-dependent producers to find satisfactory solution  Tariff simplification  Tariff quotas reductions in bound in-quota tariff rates tariff quota administration  LDCs – inter alia, duty- and quota-free access for at least 97 percent of products at a tariff line level  Cotton market access - duty- and quota-free for cotton exports from LDCs

17. 17 Domestic Support Main issue – size of reductions Green Box Product- specific limits Cotton de minimis Overall trade-distorting domestic support Amber Box/AMS 10% VoP (Avg 95-00) Blue Box S&D

18. 18 New Concept – Overall Level of Trade-distorting domestic support Base level Final Bound Total AMS 10% of average value of production in the 1995-2000 The higher of: average Blue Box payments as notified to the Committee on Agriculture, or 5% of the average total value production, in 1995-2000 period + + = S&D for DGCs

19. 19 Reductions in OTDS  Tiered reduction formula – higher cuts for higher levels of OTDS Minimum overall commitment  DdCs with high relative levels of OTDS in the second tier (≥ 40% of VoP) to undertake additional 5% effort (Japan) TierThreshold (US$ billion)Cuts 1 > 60 (EC)80% 210-60 (US and Japan)70% 3< 10 (all other DDC)55%

20. 20 Reductions in OTDS Special & Differential Treatment  DgC reduction  2/3 rds of DdC cuts in the third tier (37%) BUT  DgC exempt from OTDS reductions if:  don’t have Final Bound Total AMS;  NFIDCs (as listed in G/AG/5/Rev.8);  very recent RAMs and small low-income RAMs with economies in transition  very recently acceded Members

21. 21 Reductions in Final Bound AMS  Tiered reduction formula – higher cuts for higher levels of AMS  DdCs with high relative levels of AMS (≥ 40% of VOP) to undertake additional effort ½ difference between tiers (Japan, Iceland, Norway, Switzerland) TierThreshold (US$ billion)Cuts 1 > 40 (EC)70% 215 - 40 (US and Japan)60% 3< 15 (all other DDC) 45%

22. 22 Reductions in Final Bound AMS Special & Differential Treatment  DgC - 2/3 rds of DDC cuts in the third tier BUT  DgC exempt from AMS reductions:  If AMS <= US$100 million  NFIDCs (as listed in G/AG/5/Rev.8);  Very recent RAMs and small low-income RAMs with economies in transition Continued access to provisions of Article 6.2 (development programmes)

23. 23 Product-Specific AMS Limits Current situation: Aggregate AMS New product-specific AMS limits sugar beef dairy rice wheat Current Aggregate limit Beef limit Rice limit sugar wheat rice dairy beef AMS limit

24. 24 De minimis Developed Countries  Reduce by at least 50% but more if necessary to meet OTDS Special and Differential Treatment  Reduce by at least 2/3rds of DdC but more if necessary to meet OTDS commitment  RAMs with de minimis of 5 percent reduce by at least 1/3 rd DDC reduction  Longer implementation period (i) DgC with no Final Bound Total AMS; (ii) DgC with AMS but which allocate almost all that support to subsistence and resource poor producers; (iii) NFIDCs as list in G/AG/5/Rev.8; (iv) Very recently acceded Members; (v) Small low-income RAMs with economies in transition Exempt from reductions

25. 25 Blue Box  Additional criteria – expansion of policy coverage to include direct payments that do not require production  Overall cap on Blue Box – 2.5% of average total value of agricultural production, 1995-2000 (i.e. reduction from 5% vop to 2.5%) but if Blue Box more than 40% of trade-distorting support, reduce by level of AMS cut  Product-specific limits Special and Differential Treatment  Blue Box cap at 5% of the average total value of agricultural production, either over the period 1995-2000 or 1995-2004  Flexibilities with respect to determining the product-specific limits

26. 26 Final Bound Total AMS 10% value of Ag. production Higher of: avg. Blue Box payments OR 5% val. Ag. prod Base Overall OTDS Lower Blue Box Limit Reduced AMS Reduced de minimis Tiered reductions Tiered reductions Final OTDS level Reductions in Overall Trade-Distorting Domestic Support + + S&D for DgCs

27. 27 Green Box – Proposals Possible amendments to Annex 2, including:  expand coverage of para.2 to specifically cover the special needs of developing country Members  Additional flexibility when accounting for the acquisition of stocks for foodstuffs for food security purposes under para 3  tighten provisions related to base period update (paras. 6, 11 & 13)  fine-tune eligibility criteria in para 8, base periods and an allowance for payments in the event of destruction of animals or crops to control/prevent pest and diseases  exempt developing country Members from the condition that disadvantaged regions must constitute a clearly designated contiguous geographical area with a definable economic and administrative identity

28. 28 Cotton  Key element of the round  Reductions trade-distorting support: to be more ambitious; and implemented more expeditiously than the general provisions relating to trade-distorting support  C4 proposal currently in draft modalities  Key to solution lies with reduction commitments to be made by developed countries

29. 29 Export Competition Parallel elimination of all forms of export subsidies by 2013 Food Aid Main issues – definition of safe box, monetisation Exporting STEs Main issue – monopoly powers Export credits Main issue - self-financing Export subsidies Main issue – phasing Special and differential treatment

30. 30 Export Subsidy Elimination Developed Country Members Developing Country Members EliminationEnd of 2013End of 2016 (no reductions for LDCs) Budgetary Outlays 50% by the end of 2010 and remaining by end 2013 Equal annual instalments Quantity levels Standstill at actual average 2003-05 levels – not to be used to new markets Equal annual instalments Article 9.4NA2021 (5 years after the end-date for elimination of export subsidies)

31. 31 Export Credits – Key Elements  Forms and providers subject to disciplines  Maximum repayment term: 180 days  Must be self-financing: When premium rates charged over a previous 4 year (6yrs for DgC) rolling period are adequate to cover the operating costs and losses of the programme during the same period  Still subject to provisions of other Agreements, including ACSM  If an export subsidies within the meaning of Item (j) of Annex I of the ASCM, also deemed not to be self-financing  Repayment period between 360 & 540 days for LDCs and NFIDCs. Additional time in exceptional circumstances

32. 32 Agricultural Exporting State Trading Enterprises (STEs)  Provisions applicable to any exporting STEs meeting the definition set out in the Understanding on the Interpretation of Article XVII  Elimination of: Export subsidies Government financing of STEs Government underwriting of losses Monopoly powers – except if trade in product small share of world trade  S&D – provisions for DgCs, including SVEs and LDCs to maintain or use monopoly powers

33. 33 International Food Aid  Commitment to maintain adequate levels of food aid  General disciplines for all food aid transactions: Needs driven provided in fully grant form Not tied to commercial exports of goods or services Not linked to market development objectives of donors Not re-exported (with exceptions)  Market conditions of the same or substitute products to be taken into account  Donors encouraged to procure food aid from local or regional sources  Encourage the shift towards cash-based food aid

34. 34 International Food Aid Disciplines for aid provision under two different situations (i) Emergency Food Aid (Safe Box)  Emergency declaration or emergency appeal combined with assessment of need by relevant UN Agency (e.g. WFP)  No monetisation except for LDCs for the purpose of transport and delivery  No time constraints if conforms with provisions (ii) Non-Emergency Food Aid  Based on a targeted assessment of need  Provided to redress food deficit situations – targeted to meet nutritional requirements  Provided with the objective of preventing or at least minimising commercial displacement  Monetisation prohibited except under certain circumstances Key issues: definition of emergency, monetisation, in-kind food aid, targeting

35. 35 Other Issues Cotton  DdC export subsidies for cotton prohibited DgC to comply with prohibition by end of the 1 st year of implementation period  Any new or additional obligations from export credits, STEs and food aid shall be implemented: on 1 st day of implementation for DdC by the end of the 1 st year for DgC Export Prohibitions and Restrictions  Strengthened disciplines

36. 36 What is at Stake?  Tariff reductions – continued reform process with a high level of ambition  Improved possibility for developing countries to increase trade with developed countries but also other developing countries  Flexibility for developing countries to protect their sensitive sectors  Reduction of trade-distorting domestic support and elimination of export subsidies for improved competition, both on domestic and international markets  No new concessions for LDCs but duty- and quota-free access for 97 percent of tariff lines