Joint South Centre – Oxfam Workshop on the “Interfaces of the WTO Doha Round and EPA negotiations” Malawi, 26-28 April 2007 : Joint South Centre – Oxfam Workshop on the “Interfaces of the WTO Doha Round and EPA negotiations” Malawi, 26-28 April 2007
Outline : Outline Agricultural trade and production in the ESA Region
Challenges arising from the interface between the EPA and WTO negotiations
From the offensive perspective
Commodity Protocols, erosion of preferences and formula for tariff reduction in the WTO
From the defensive perspective
Identification of sensitive products
Agriculture Safeguards
Conclusions
Agricultural trade and production in the ESA Region : Agricultural trade and production in the ESA Region Importance of agricultural imports for food security
Many ESA countries depend on few commodities for their export earnings
Agricultural sector = main contributor to employment in the region
Share of agriculture in the regional economy has been increasing during the last decade
High reliance on developed country markets, in particular the EU
Commodity Protocols, erosion of preferences and formula for tariff reduction in the WTO : Commodity Protocols, erosion of preferences and formula for tariff reduction in the WTO Preferential market access conditions provided by Commodity Protocols to ACP countries
These are being eroded as a result of:
Dispute Settlement cases at the WTO
Reform of the Common Agricultural Policy (CAP)
Tariff liberalization (MFN-WTO and regional-bilateral agreements by the EU)
Other issues that affect the benefits of preferences (RoO, standards, etc…)
Commodity Protocols, erosion of preferences and formula for tariff reduction in the WTO : Commodity Protocols, erosion of preferences and formula for tariff reduction in the WTO MFN liberalization (WTO)
Harmonizing formula for reduction of bound rates
Special and Differential Treatment in discussions about the formula
Trade solutions to preference-erosion (EU not actively engaged in these discussions)
Parallelism among pillars (the “proportionality principle”)
EPA discussions
Elimination of 80% tariffs of ACP
EU doesn’t want to discuss subsidies / CAP Reform
EU doesn’t want to discuss preference erosion
Synergies:
Extent of tariff liberalization in RTAs (art XXIV GATT)
Link trade liberalization to drastic reduction of subsidies @ WTO
Dealing with loss of benefits of Commodity Protocols under EPAs – Development dimension (?)
Identification of sensitive products : Identification of sensitive products The rationale behind shielding certain products and sectors from liberalization:
Link between agriculture production, poverty reduction and development
Why is tariff protection justified for developing countries?
One of the few policy instruments at their disposal
Food security / Livelihood security
Identification of sensitive products : Identification of sensitive products What is being discussed in the WTO
“Special Products” vs “Sensitive Products”
Controversial issues
What is being discussed in EPAs
Designation on the basis of amount traded and importance to the economy
20% (?)
Regional consensus to define which sectors should be protected
Synergies:
Designation according to more criteria?
Is there need for a homogenous methodology within and among regions?
More sensitive products?
Agricultural Safeguard : Agricultural Safeguard The rationale of an agricultural safeguard:
Agricultural markets are volatile and unstable
Many developing countries have experienced increased import surges and price depressions since the last decade
Causes
Trade liberalization
Subsidies
External factors affecting production
Consequences of import surges and price depressions
Displacement of domestic producers
Uncertainty and act as a disincentive for producers to invest in agriculture development
Lower income in rural areas
Challenges from the defensive perspective – 4 : Agriculture safeguards in the WTO
Special Safeguard (SSG)
Special Safeguard Mechanism (SSM) – currently under negotiation
Agriculture safeguards under EPAs
Proposal against cheap imports from the EU
EU not willing to discuss this (?)
Import surges in the ESA Region
Synergies:
Compliance of the mechanism with WTO rules
Retaining possibility to apply WTO SSM
Level of the remedies
Challenges from the defensive perspective – 4
Conclusions : Conclusions Not all elements being discussed under EPA on agriculture products guarantee improved market access opportunities and development outcomes for the ESA Region
Some elements that are out of the EPA negotiations (CAP Reform, subsidies negotiations in the context of the WTO) affect the capacity of the region to appropriate development benefits from agriculture liberalization
Some elements of WTO negotiations on subsidies, safeguards, sensitive products and special products could be useful in terms of maintaining “policy space” in the region
They could be mainstreamed into the EPA debate. There might be need to fine tune them according to the national and regional needs, to turn them into a national/regional position.
Thank you : Thank you Luisa A. Rodriguez O.
Programme Officer for Agriculture
Trade for Development Programme
rodriguez@southcentre.org
www.southcentre.org