Dead as Doha. But will come alive in 2010

Font Size

Print

Feedback

Email

Discuss

: dismantling of agricultural import barriers not only in developed countries, but also in India and China.

Since negotiations are about give and take, there will always be tensions and contentious haggling until a mutually acceptable agreement is hammered out. But once the controversial Singapore issues (investment protection, competition policy, transparency in government procurement and trade facilitation) were junked in Cancun 2003 and DDA’s agenda was no longer over-loaded, the negotiating points were NAMA (non-agricultural market access) and agriculture.

In Hong Kong negotiations, it was decided that a Swiss formula (see box) would be used for NAMA. For the July 2008 talks, a coefficient of 7-9 was proposed for developed countries. For developing countries, the suggested bands were 19-21, 21-23 or 23-26, with a country free to choose between these three options. Developing countries were allowed less-than-formula cuts on sensitive products.

This isn’t a package India would have been happy with. However, no country would have been happy with the package. That is the hallmark of any good compromise agreement. Plus, with India migrating to a unified goods and services tax and unilateral reform and regional agreements bringing down manufacture tariffs, NAMA provisions are not the deal breaker. Agriculture broke the talks, as it always has.

The three pillars

Following the Uruguay Round agreement on agriculture, agricultural negotiations have followed the so-called three pillars of domestic support, market access and export competition. Market access means opening up markets. Since quantitative restrictions (QRs) are virtually non-existent for imports of agricultural products, opening up markets primarily means tariffs. There has been consensus for some time that there will be four tariff bands, with average tariff reductions varying across these bands. There has also been consensus that average tariff reductions will be lower for developing countries than for developed ones. The dispute has been over the precise numbers.

In addition, over and above the overall safeguards clause, there was consensus that there should be a special safeguard mechanism (SSM) that would be available to developing countries. If there are significant agricultural imports, safeguards duties can be imposed. How high will these duties be? What will be the trigger for invoking the SSM clause? Will it be based on the volume of imports or the price at which imports take place? These have been controversial negotiating issues.