Agriculture Becomes The Centerpiece-

Original Publication Date: 
8 September, 2003
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AGRICULTURE DISCUSSIONS - SEPTEMBER 09, 2003

Agriculture becomes the centerpiece…

All major press conferences organized on 9th September a day before the Cancun Ministerial Conference (September 10-14, 2003) clearly show that Agriculture is going to make or break the Cancun Ministerial Conference of the WTO. Instead of meekly reacting to the EU-US alliance that can be termed as a sequel to the “Blairhouse Accord”, developing and developed countries have come out with aggressive groupings that for the time being at least seem to pose a serious challenge to the designs of the US and the EU. As we would see from the discussions below, agriculture has become the centerpiece of negotiations at the Cancun Ministerial Conference of the WTO. At least one third of the WTO Membership seems to be quite keen to move forward on negotiations on any other issue only if they see substantive movement on agriculture.

The CAIRNS group of countries (the Group of 14 agriculture exporting countries) and G-21 (a group of diverse developing countries including countries like India, Egypt and China that are not a part of CAIRNS group and countries like Argentina, Costa Rica that are a part of CAIRNS grouping) seem to have given lower priority to other issues and got their act together on agriculture at the Cancun Ministerial Conference of the WTO. Speaking at the press conference organized by the CAIRNS group, the Costa Rican Minister said that “G-20 (Egypt formally joined in the evening to make it G-21) and the CAIRNS grouping are complementary and that they would not allow the EU to divide them this time”.

What increased the significance of this press conference was the body language of all the CAIRNS group representatives (mostly Ministers) attending this meeting. They were very aggressive and confident about pushing their agenda on market access, domestic support and export subsidies - the three pillars of the Agreement on Agriculture.

Mark Vaile, the Australian Trade Minister who chaired the morning press conference of the CAIRNS group clarified that “under no circumstances would the CAIRNS group sacrifice the ambitious mandate of Doha” and that it was not interested to wind up the round if the Doha mandate on agriculture was not addressed as per their ambitions. Congratulating such a development he said, “Make no mistake about the significance of such a development”. He was categorical that Chairman Castillo’s text on agriculture “was deficient” and did not reflect the ambitions that the Doha Ministerial Conference confirmed in the area of reducing and subsequently eliminating domestic subsidies and export subsidies.

The communiqué circulated by the CAIRNS group says, “We are seeking the elimination of export subsidies and substantial reductions in all forms of trade distorting domestic support. In relation to market access, we are seeking deep cuts to all tariffs and substantial expansion of tariff quota volumes.”

When it was pointed from the audience that the G-21 and the CAIRNS group alliance suffered political contradictions with players like India not keen to open their market, the Argentinean Minister pointed out that the areas of disagreement were very small and that agriculture reform would be demanded keeping in view the special demands of developing countries. The explanation of the Argentinean Minister is also supported by the communiqué which mentions, “Across all three reform pillars the proposals detail flexibility options for developing countries to enable them to address food security and rural development concerns.” This language clearly brings concerns of India on board.

When asked as to what would happen if the alliance were to be pushed to the wall by the EU-US tough line on agriculture, the Australian Minister said, “We are here to push the others to the wall and not get pushed.”

In the evening the G-21 (the grouping of developing countries) organized a press conference which was addressed by Ministers of Argentina, Brazil, China, India and South Africa. Summarizing the position of the G-21, Celso Amorin, the Brazilian Minister for Trade said, “This is the first time that such a large group of developing countries have been able to come out with a proposal. We all agree that the fundamental aspect of this endevaour is to keep our unity and we are aware that our unity is going to be tested.”

Expressing his views on the grouping the Indian Commerce Minister Arun Jaitley said, “The formation of this group of 21 countries is very important for us and the WTO. It marks an important point in the WTO process wherein developing countries are making concerted efforts to push their agenda. This document is endorsed by 21 countries that represent majority of the global poor and more than 65% of the world’s farming community.”

The Ministers representing G-21 reiterated that it was the first time that such a grouping of developing countries had taken such a professional, non-circumstantial, constructive position and therefore they would not go without “real substance”. Its communiqué clearly reflects its resolve. In the area of export subsidies the communiqué makes it clear that economic, political, technical and ethical reasons added up to make their continuation an aberration. Whereas in the case of domestic support the communiqué demands that the proposed cuts should be complemented by tighter rules and disciplines which do not encourage box-shifting.

The Ministers pointed out that the suggestions in the G-21 communiqué should not be treated as merely procedural issues but should taken pari pasu with the Chairman Castillo’s text. They want their text to be central to negotiations and for achieving this they are even ready to negotiate issue by issue.

Hitting out at the WTO Secretariat’s gestures in the past towards creating ambiguity on positions, Celso Amorin asked the press to make sure that they got hold of a copy of the joint statement of G-21. The level of seriousness of the G-21 initiative can be possibly gauged from the fact that an official from one of the G-21 delegations was actually approaching the press personally to hand over the Draft Ministerial Communiqué.

The developments and the context in which they have come about are certainly welcome. This political unity has opened some strategic opportunities as well as challenges for political unity of developing countries. What are these opportunities and challenges?

Strategic Opportunities and Challenges

This sectoral initiative launched by CAIRNS and G-21 could open the doors for forming strategic alliances on Singapore issues (investment, competition, government procurement and trade facilitation). If the Grouping is really interested in keeping its unity in tact then it would have to guard itself on all the fronts. Singapore issues are one area wherein Members of this Group have polarized positions. Some of the Members of this Grouping such as Brazil, Argentina, Costa Rica have never negated the possibility of initiating negotiations on investment at the WTO. This is in complete contradiction to the Indian position. Hence safeguarding of agriculture interests of the Alliance might provide India a strategic opportunity to convince its other friends in the Alliance to toe its line on Singapore issues.

The EC Trade Commissioner Pascal Lamy in the press conference in the afternoon has already sounded his intention to test the strength of this Alliance. He said, “If there is an alliance on agriculture, let’s see how long would it hold.” There is great possibility that the EU could use Indian industry to nudge the Indian position on investment and other Singapore issues. In order to avoid being pushed on Singapore issues, India might yield its position on agriculture. Lamy even hinted towards this when he mentioned that he already had the support of the Indian industry on launching investment negotiations at the WTO.

The US has already started dangling carrots before least developed countries by pushing sectoral initiatives such as one on cotton. It has also declared a strong technical assistance package taking its trade related technical assistance for the Doha Agenda to USD 3 million since the launch of negotiations in November 2001. Most of this technical assistance is going to be channeled through the World Bank to least developed countries such as Burundi, Cambodia, Djibouti, Eritrea, Ethiopia, Guinea, Lesotho, Madagascar, Mali, Mauritania, Malawi, Senegal and Yemen. This is going to create considerable difficulties for the Alliance to increase its strength.

Conjuncture

There is no doubt that the EU and the US are certainly disturbed about this political marksmanship shown by G-21 and CAIRNS grouping. The EU Trade Commissioner, Lamy and the Commissioner for Agriculture, Franz Fischler are caught in an uncomfortable position as they cannot dilute their positions without discussing them with the EU-Member States. The USTR, Robert Zoëlick would not want himself to go back with a weak image. Certainly this would not help George Bush whose popularity ratings are taking unprecedented beatings these days.

Arun Jaitley would also been keen to preserve the image of his Party, as one, that does not sacrifice the interests of the farmers and farm labour, especially in the context of the forthcoming elections. At the same time he would not want to unnecessarily ruffle feathers of the industry who provides critical resources during elections. There is news that the Indian Prime Minister has been receiving calls from Washington to re think on their position vis-à-vis agriculture. Who knows one call from Delhi could change the Indian position on agriculture overnight.

Who would lose and win in this balancing act? Would it ever be the farmer and the farm labour?


by:
Raghav Narsalay
Focus on the Global South-India Programme

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