Draft Paper – Not to be cited without author’s permission
Every two years, give or take, the WTO holds its highest level ministerial meeting, with the trade and/or finance ministers of each member country. At these meetings key decisions are made regarding the future path of the WTO. Between the ministerial meetings, the negotiations continue.. The on-going negotiations on trade in agricultural and food products are carried out under the rubric of the evolving Agreement on Agriculture (AoA), though there are also many non-AoA issues—like intellectual property, competition, investment and government procurement policies—that also impinge on agriculture.
Current Status of the WTO Negotiations
After the failure of the Cancún ministerial meeting, negotiations on agricultural trade and subsidies moved in two separate directions. On the one hand, both the U.S. and the EU rushed to negotiate and in some cases sign regional and bilateral free trade agreements. These included the signings and negotiations between the U.S. and Central America (CAFTA), the Andean region, the Middle East, Australia, Africa and others, including the stalled negotiations for the Western Hemisphere (FTAA), 4 and between the EU and
EU expansion, and bilateral negotiations.5
This is a potentially
dangerous trend, as typically in these bilateral and regional contexts the trade superpowers enjoy a greater advantage of political and economic power over their partners than they do in the WTO, and thus are often able to extract greater concessions including larger opening for dumping cheap agricultural products.
On the other hand, the US and the EU have intensified their efforts to agree on a new framework for WTO negotiations post-Cancún. This took the form of negotiations on the so-called “July framework” that concluded in Geneva on August 1, 2004. Observers noted heavy pressure tactics by the U.S. and EU.6 The July framework is a roadmap for the remaining WTO negotiations in the so-called “Doha round,” and as such, sets the limits—if not the details—on the best and worst that countries can expect on a series of issues, including agriculture.
The short version is that the trade superpowers made some concessions, but largely got what they wanted. While the U.S. and the EU agreed to eliminate export subsidies and to put disciplines on the use of export credits, which—as can be seen in the case of Mexico described separately— can contribute to dumping, no road map or fixed end date for their elimination was set. Experience with the negotiations to date suggests that without those two items, an issue may well be lost. The U.S. and the EU also agreed to a 20 percent cut in their so-called Amber box (trade-distorting) subsidies, but that is likely to be more than balanced out by the expansion of so-called Blue box to include new programs, and continued use of programs, such as decoupled payments, that are eligible for unlimited spending in the Green box (which is theoretically limited to non-trade distorting programs). Robert Zoellick, the U.S. negotiator, was quick to assure U.S. farm interests that the new framework “protects U.S. farm subsidies.” 7