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DRAFT WTO AGRICULTURE PAPER MEETS SOME REFORM OBJECTIVES, BUT NOT OTHERS

The draft World Trade Organisation agriculture paper was "like the proverbial curate's egg ? good in parts", Trade Negotiations Minister Jim Sutton said today.

Mr Sutton, speaking from Tokyo where he is to attend a WTO "mini-ministerial" meeting with about 25 other WTO members, said that despite the shortcomings of the draft plan, the WTO must remain committed to the ambitious mandate for reform of the rules governing trade in agricultural products that was agreed to by every WTO Member in Doha in 2001.

A draft of the so-called "modalities"paper was published by the Chairman of the WTO agriculture negotiations, Stuart Harbinson, today. The paper proposes the framework for new commitments and rules for the WTO agriculture negotiations.

Mr Sutton said Mr Harbinson had done a professional job in difficult circumstances in his first draft.

"But we're far from the end of the road. While the text looks like a step in the right direction, it does not meet New Zealand and Cairns Group expectations.

"It certainly accommodates most developing country concerns and importantly for New Zealand for the first time it sets a definite date for the elimination of export subsidies. But that date is still much too far away: export subsidies undermine world markets and hurt farmers in New Zealand and around the world. They must be removed as quickly as possible.

"The paper also fails to meet Cairns Group ambitions for tariff reductions and domestic subsidy cuts. The flexibility it gives would allow countries to pick and choose products and could leave some highly distorted products largely excluded," he said.

The paper sets out a formula for tariff reductions which would deliver bigger reductions for higher tariffs, but which would also leave scope for countries to apply minimum reductions in politically-sensitive products. It calls for some tariff quotas to be expanded, although to a lower level than the Cairns Group was seeking.

Export subsidies are to be phased out over a 6 to 10 year period, but the proposal would allow countries to choose sensitive sectors for the later elimination date. Trade-distorting domestic support would be reduced by 50 to 60 percent of existing bound levels, which could leave actual applied subsidy rates largely unchanged in many countries. Mr Sutton said he was particularly disappointed at low level of tariff quota expansion.

"The improvements of the current proposal would be less than those achieved in the Uruguay Round. Domestic support has recently been highlighted by the OECD as the source of many of the worst problems in agricultural trade yet the Harbinson paper would leave much support in place even after 5 years."

Mr Sutton said he would be making it clear to other ministers at the Tokyo Mini-Ministerial that the text needed to be improved.

"But we have to recall that this is a first draft, and we have a further six weeks to negotiate on it before the modalities must be established.

"Other Members will have their own concerns about the paper. But I will remind my colleagues this weekend that this draft must be regarded as the basis for all of us to keep working in order to finalise the modalities by 31 March. The Doha mandate was clear about that deadline, and we will respect it."

Mr Sutton said that he had tasked officials to examine the detail of the text closely against the Doha mandate and to continue negotiations on it in Geneva.

WTO Ministers will meet again in September 2003 in Cancun, Mexico, and the Doha Round is scheduled to conclude on 1 January 2005.

US IMPORT BEEF TRADE

Wed, Feb 12, 2003

( Australia and New Zealand)

Compared to Wednesday, price levels on import boneless were steady on very limited trading. Demand continued to be light as grinding business was very slow on all grinding sectors. In addition, a mostly steady domestic boneless beef market also caused buyers to hold off on buying. Offerings for spot delivery were light while, out-front delivery product was moderate, especially from New Zealand.




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