Cancun 11 September 2003

Agriculture continues to hog the headlines here and any agreement appears as elusive as it was when the ministerial began. The matter continues to agitate those outside the hallowed portals of the convention centre. Farmers groups continued their agitation few miles away charged by the sad incident of a Korean farm leader committing hara-kiri. The farmer: Lee Kyung-hae climbed the high security fence waving “WTO kills Farmers”, took out a knife and stabbed himself in the chest. Incidentally, he was the same farmer who had camped outside the WTO building in Geneva a few months ago asking for exclusion of agriculture from the WTO.

Lee’s death must be in vain. The two groups–with a large silent majority—continue to hold hardline positions. The G-21 alliance (comprising of countries like Brazil, India and China) is holding on, with the other party: the EU trying hard to break this alliance. That is the crux of the proceedings that dominated discussions at the WTO Ministerial Conference in Cancun on September 11. There is a feeling among the EU officials that India is a difficult nut to crack. A strategy to separate Brazil from India may be well on their cards. That is why they have primarily identified Brazil as the leader of G-21 rather than India. Further, developed countries have spotted some clear differences between the two big developing countries – Brazil and India – on contentious agriculture issues.

Brazil, a leading farm exporter and member of the Cairns group of countries is strongly advocating for total liberalization of agriculture that includes tariff reductions and complete phasing out of subsidies by rich countries. On the other hand, India is mainly interested in the elimination of subsidies and not the reduction of tariffs, as it itself maintains relatively high tariffs rates to shield her farmers. Another soft target is Argentina, which owes billions of dollars to the International Monetary Fund.

Delivering an update on the day’s happenings at the Ministerial, Franz Fischler, the EU Agriculture Commissioner, in a briefing with NGO representatives, said that the meeting this afternoon with the facilitator of the Agriculture group was the starting point of the real negotiations in Agriculture.

The discussions lasted over two hours where the G-21 and the EU presented their respective positions. Fischler commented that the G-21 countries in their proposal were demanding reforms in the Blue Box (elimination of blue box subsidies), Green Box measures (capping and strict criterion) and Amber Box (setting of higher targets and ambitious timelines for trade distorting subsidies. According to him, the fact that they were discussing green box measures, besides blue box and amber box makes their proposal flawed. The EU’s position, he said is that “the Green box indicates non-trade distorting subsidies and the WTO is only concerned with trade distorting subsidies, so why should we discuss Green box measures at all”. The risk he said was that discussing this will block discussions on other sectors that need reform.

On market access, Fischler said, the G-21 was asking for a different approach and we, the EU think “it will be risky to have 2 WTOs, one for developed countries and one for developing countries”. However, it is clear that we, the EU, should do more for developing countries and we are prepared to do more than compared to the past. In this context he also said that one should not underestimate the importance of South-South trade in agriculture. If you liberalize agricultural trade, then 80 % of the benefits of this liberalization will come from greater trade between developing countries.

Importantly, Fischler clearly stated that the EU is offering to discuss a list of products of interest to developing countries and in relation to that the complete phasing out of the subsidies associated with these products.

Said Fischler, “It is a matter of fact that since the 1993 agricultural reforms in the EU until today, there has been a reduction of more than 70 per cent in the trade distorting subsidies of the EU”. He emphasised that in principle, the EU is moving forward but we don’t see moves in other parts of the developed world. This, of course, was a clear indication towards the stubbornness of the US.

Fischler added that the EU feels committed to help poor countries get the chance to increase their agricultural exports. However large agricultural exporters such as Brazil should not ‘cash in’ on benefits to the poor and disadvantaged developing countries.

With regard to the cotton subsidy issue, when interrogated by somebody from the audience has to why the EU has not made a commitment now, but is waiting for autumn to announce a reform, Fischler said that the EU has planned to decide on a reform proposal by next week. So, he said, we are not delaying things.

The five facilitators who were entrusted with the job of informal consultations started work today. However, there is no significant breakthrough on any of the issues so far. Most of the Members have still not gone beyond their Geneva position. Members have stated their initial position on non-agricultural market access and special & differential treatment (S&DT). On non agricultural market access, members want to start work on two issues: formula for tariff reduction and sectoral tariff component (Para 3 and 6 of Annex B, Cancun Draft Ministerial Declaration). On S & DT, Pakistan has proposed a framework agreement. India has argued for the immediate adoption of 24 issues mentioned in Annex C of Cancun Draft Ministerial Declaration, related to S &DT.

Surprisingly, on new issues, not much discussion took place. In the meanwhile, India is trying to form yet another formidable alliance comprising of countries like China, to oppose all the Singapore issues. How far she will succeed, will depend on the movement on agriculture.