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Tackling Agriculture in the Post-Bali Context Tackling Agriculture in the Post-Bali Context A collection of short essays Edited by Ricardo Meléndez-Ortiz Christophe Bellmann and Jonathan Hepburn October 2014 Tackling Agriculture in the Post-Bali Context A collection of short essays Edited by Ricardo Meléndez-Ortiz Christophe Bellmann and Jonathan Hepburn October 2014 ICTSD Programme on Agriculture Trade and Sustainable Development Published by International Centre for Trade and Sustainable Development (ICTSD) International Environment House 2 7 Chemin de Balexert, 1219 Geneva, Switzerland Tel: +41 22 917 8492 Fax: +41 22 917 8093 E-mail: [email protected] Internet: www.ictsd.org Publisher and Director: Ricardo Meléndez-Ortiz Senior Resident Research Fellow: Christophe Bellmann Programme Manager: Jonathan Hepburn Acknowledgments This electronic publication, as is traditional with ICTSD undertakings, builds on many years and various forms of collaboration between ICTSD, policymakers, analysts, and stakeholders. Many thanks go to the authors for their prompt response to our invitation, and the very high quality and targeted nature of their contributions to this volume. ICTSD is equally grateful for the support of its core and thematic donors including the UK Department for International Development (DFID); the Swedish International Development Cooperation Agency (SIDA); the Netherlands Directorate-General of International Cooperation (DGIS); the Ministry of Foreign Affairs of Denmark, Danida; the Ministry for Foreign Affairs of Finland; and, the Ministry of Foreign Affairs of Norway; as well as the Swiss State Secretariat for Economic Affairs (SECO), for support of ICTSD’s related work through the World Economic Forum – ICTSD E15 Initiative: Strengthening the Global Trade System. For more information about ICTSD’s Programme on Agriculture, Trade and Sustainable Development, visit our website at http://ictsd.org ICTSD welcomes comments and feedback on this publication. These can be sent to the volume editors at [email protected]; [email protected]; [email protected] or to ICTSD’s Managing Director for Communications and Strategy at [email protected]. Citation: Meléndez-Ortiz, Ricardo; Christophe Bellmann and Jonathan Hepburn; (ed.)(2014); Tackling Agriculture in the Post-Bali Context; International Centre for Trade and Sustainable Development, Geneva, Switzerland, www.ictsd.org The views expressed in this publication are those of the authors and do not necessarily reflect the views of ICTSD or its funding institutions. Copyright © ICTSD, 2014. Readers are encouraged to quote this material for educational and non-profit purposes, provided the source is acknowledged. This work is licensed under the Creative Commons Attribution-Non-commercial-No-Derivative Works 3.0 License. To view a copy of this license, visit http://creativecommons.org/licenses/bync-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. ISSN 1817 356X Tackling Agriculture in the Post-Bali Context - A collection of short essays 3 TABLE OF CONTENTS Preface 5 List of Abbreviations 7 Overview 9 PART ONE: Evolving Trends in Global Agricultural Markets 31 Has the Treadmill Changed Direction? WTO Negotiations in the Light of a Potential New Global Agricultural Market Environment 33 By Josef Schmidhuber and Seth Meyer Energy Markets: The Impact on Trade in Biofuels and Farm Goods 47 By Harry De Gorter International Trade Disciplines and Policy Measures to Address Climate Change Mitigation and Adaptation in Agriculture 55 By David Blandford Challenges Facing Poor Food-importing Countries: Can WTO Disciplines Help? 61 By Panos Konandreas Can We Have Regionalism and Multilateralism? 75 By Ken Ash and Iza Lejarraga PART TWO: The 2008 Draft Modalities and Evolving Trends in Agricultural Trade Policies 85 MARKET ACCESS Implications of the Draft Market Access Modalities on Bound and Applied Tariffs 87 By David Laborde Import Surges and the Special Safeguard Mechanism in a Changing Global Market Context 103 By Jamie Morrison and George Mermigkas EXPORT COMPETITION Export Subsidies and Export Credits 115 By Eugenio Díaz-Bonilla and Jonathan Harris Trade Policy Options for Enhancing Food Aid Effectiveness: Revisiting the Draft Doha Deal 123 By Edward J. Clay 4 Tackling Agriculture in the Post-Bali Context - A collection of short essays DOMESTIC SUPPORT Evolution of Trade-distorting Domestic Support 139 By Lars Brink Market Price Support in Large Developing Countries 147 By Raul Montemayor The 2014 US Farm Bill: Implications for the WTO Doha Round in a Post-Bali Context 153 By Vincent H. Smith The EU CAP Reform: Implications for Doha Negotiations 159 By Stefan Tangermann The Future of Green Box Measures 167 By Jonathan Hepburn and Christophe Bellmann EXPORT RESTRICTIONS Export Restrictions and Food Security 183 By Giovanni Anania COTTON How to Re-invigorate the Cotton Issue at the WTO: Generate Ideas, Spin Proposals, Weave Solutions and Avoid Stocks 195 By Nicolas Imboden PART THREE: Systemic and Institutional Issues 205 WTO Agriculture Negotiations: The Way Ahead 207 By Harsha Vardhana Singh In Agriculture, it is Time to Act with Plurilaterals 219 By Aluisio de Lima-Campos Transparency and Monitoring in Agricultural Trade: Policy Options for the Post-Bali Agenda 223 By Tim Josling Strengthening the Deliberative Function of the Regular Committee on Agriculture 229 By Manzoor Ahmad and Ammad Bahalim ABOUT THE AUTHORS 235 Tackling Agriculture in the Post-Bali Context - A collection of short essays 5 PREFACE At the ninth WTO Ministerial Conference in Bali, Indonesia, Ministers formally signed off on their first multilateral trade deal in nearly two decades by agreeing on a small package built around a new trade facilitation agreement, some elements of agriculture and select development-focused provisions. Building on the Bali success, members are now set to revisit the rest of the Doha trade talks. In addition to a rather narrowly defined work programme under the Committee on Agriculture to find a permanent solution to the controversy around public food stockholding, Members have agreed to design a “clearly defined” work programme on the remaining Doha Development Agenda (DDA) issues. Such a work programme should build on the decisions taken at the Ministerial, “particularly on agriculture, development and LDC issues, as well as all other issues under the Doha mandate that are central to concluding the Round.” In doing so, Ministers recalled the need expressed at the 2011 Ministerial to explore different negotiating approaches, while respecting the principles of transparency and inclusiveness, and to look at ways to overcome the most critical and fundamental stumbling blocks. How WTO Members will define such a work programme remains unclear at this stage. While some insist on the need to take a piecemeal approach, carefully calibrating ambition and do-ability in a balanced package, others have privileged plurilateral or critical mass agreements as illustrated by negotiations already under way in a number of areas, including services with the Trade in Services Agreement (TISA) or on environmental goods, through the green goods initiative launched by a group of 14 WTO Members. Yet, regardless of the approach taken, it is clear that the work programme will have to tackle the so-called “DDA core issues”, which have been put on hold since 2008, starting with the highly controversial agriculture talks. In doing so, Members will need to assess the extent to which going back to the 2008 draft texts as a basis for further negotiations is both possible and desirable in the light of recent changes in the global agricultural landscape. While the overall objectives defined in the Doha negotiating mandates may very well remain relevant, several WTO Members have argued that the draft modalities developed since then essentially reflect a reality prevailing in the late 1990s and early 2000s. At the global level, global value chains and the proliferation of regional trade agreements have changed the way in which global agricultural trade takes place. At the same time, production shortfalls, combined with high energy prices, declining growth rates of cereal yields and rising global demand for food and biofuels have resulted in a series of food price spikes. Trade-related policy responses such as export restrictions or biofuels subsidies and mandates have further exacerbated price increases on world markets. Responding to the new world environment, large agriculture producers and major trading nations are reforming their agricultural policy – with the impact on other countries often only considered as an afterthought. While market access has been characterized by a downward trend in applied tariffs, as a result of unilateral liberalization and regional trade agreements, several emerging countries have increased their subsidies to farmers very rapidly, as illustrated by the Bali controversy around the government purchase of food at administered prices for public stockholding. Meanwhile, OECD countries have introduced new forms of support measures ranging from environmental payments to crop and revenue insurance schemes. 6 Tackling Agriculture in the Post-Bali Context - A collection of short essays This has prompted several WTO Members to call for new data and updated information on agricultural trade, a move interpreted with suspicion by other countries who fear that such a quest would be used as a rationale to extract more concessions from them. For these countries, starting WTO negotiations
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