| - On
March 18, 2003, World Trade Organization (WTO) agriculture negotiations chairman
Stuart Harbinson issued second
draft agriculture negotiations proposal. Now Special Session in Geneva is
ongoing (March 25-31) and March 31 is deadline for establishing a plan to reach
an agreement in the area of agricultural trade.
-
Chairman Harbinson's second draft still needs more work on how to achieve greater
market access and reduce trade-distorting domestic support.
- Please
contact U.S Trade Representative Robert Zoellick to urge him to push for significant
reform in the negotiations.
World
Trade Organization agriculture negotiations chairman Stuart Harbinson released
a second draft text on negotiating modalities on March 18 with some pro-developing
country modifications, e.g. with respect to tariffs, trade preferences and a special
safeguard mechanism for developing countries. The main features of the original
draft remained largely unchanged. (Comparison
of original and revised Harbinson's documents) Mr. Harbinson stated that Member
positions on most issues were still too divergent for him to make significant
modifications. The US rejected the draft as lacking ambition regarding the proposed
cuts in tariffs and trade-distorting support. WTO Members are due to establish
reform guidelines on agriculture by March 31, 2003, under a deadline set by WTO
Ministers in the Doha Declaration. Some
countries are continuing to argue for extensive flexibility to continue to favor
their most heavily protected agricultural sectors, at everyone else's expense.
These positions have to be rejected as inadequate. The United States has supported
genuine improvements in market access, and deeper and more tightly defined cuts
in domestic farm subsidies. Reducing
trade-distorting domestic support should be one of our top priorities for these
negotiations. The draft fell far short of substantially cutting "the outrageous
levels of domestic support" provided by the EU, the US, Japan and others. The
European Union (EU) will continue to be able to subsidize its producers at a level
three times that of the U.S. This huge domestic support advantage in favor of
the European Union is one of the main reasons why American farmers find it so
difficult to compete in Europe, as well as in a growing number of important third-country
markets. The United States' proposal to set the same standard for all countries'
allowed level of trade-distorting domestic support, and to eliminate the blue
box loophole, is the best way to address this disparity. The blue box is not subject
to spending limits or percentage reductions. Blue box qualifying programs are
the domestic support payments based on a fixed amount of production, fixed number
of livestock, fixed acreage or yields, or have a 15 percent non-payment base acreage
requirement. Another
top priority issue is tariff cuts. The United States has proposed harmonizing
tariffs over five years, and eventually eliminating all tariffs. Regarding market
access, Harbinson added a further tariff band to his original three-pronged tariff
reduction model. According to the revised modalities draft, the original tariff
band ranging from 120 to 20 percent (with an average cut of 33 percent, and a
minimum cut of 23 percent) would be split into a 120 to 60 percent as well as
a 60 to 20 percent category, with average cuts of 35 and 20 percent and minimum
cuts per tariff line of 20 and 15 percent, respectively. In addition, the tariff
reductions would be less in the 20 percent downwards band (25 percent average,
15 percent minimum cut) as compared to the earlier proposal (27 percent and 17
percent). Average world tariffs on agriculture products are currently 62%, while
the U.S. averages 12%. We must do more to eliminate the high tariff peaks and
barriers that still frustrate market access in too many areas. On
February 12, U.S. Agriculture Secretary Ann Veneman has criticized on Harbinson's
first draft: "The
U.S. has proposed a bold and aggressive approach to level the playing field for
U.S. farmers and ranchers. We have serious concerns that Harbinson's paper lacks
harmonization and equity in both the market access and domestic support areas.
In addition, the low level of ambition reflected in the approach to market access
falls far short of the Doha Mandate, which calls for substantial improvements
in market access. The perpetuation of inequities regarding the allowed levels
of trade-distorting domestic support is particularly problematic." The
National Grange's policy on the agriculture trade issue is summarized in our policy
book: The
National Grange continues to support legislation, trade agreements and other measures
that will lead to the freeing of world trade between nations on a mutually beneficial
basis. We support "fast track" trade legislation to provide the President with
sufficient legal authority to negotiate effectively for a reduction in trade
barriers, both tariff and non-tariff. We continue to favor the principles set
forth in the World Trade Organization (WTO) and will support amendments to the
WTO that will call for swifter remedies to trade disputes. The Grange must continue
to work for sound trade agreements for agriculture by encouraging the Administration
and the Congress to aggressively ensure that American farmers achieve access to
all markets covered by trade agreements.
On May 19, the National Grange is planning to have a discussion of various WTO
agriculture trade proposals by representatives of foreign embassies as part of
National Grange Legislative
Fly In 2003.
Action
Plan --- Please contact U.S Trade Representative Robert Zoellick to urge him
to push for significant reform in the negotiations. Robert
Zoellick
United States Trade Representative
600 17th St. NW
Washington, DC 20508
Phone: 202-395-4510 If
you have any questions or comments please contact Legislative Research Analyst
Chil-Sook Hwang by fax: 202-347-1091
or by phone: 1-888-4GRANGE, ext 109. Thank you for your grassroots participation
in the National Grange Legislative program. Want
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