Second draft of the Cancun WTO Ministerial text

The following web link provides access to the second revised draft of the Cancun Ministerial text of September 13th 2003. Annex A of this text contains the proposals for the framework for agricultural modalities. This text was not adopted in Cancun. There was substantial disagreement on agricultural issues, with the EU strongly emphasising the importance of distinguishing between the trade-distorting effects of different types of support, and maintaining that not all forms of support were bad and that the EU had increasingly shifted over to less trade-distorting and non-trade-distorting forms of support, which it felt should not be subjected to any WTO disciplines. The USA for its part was unwilling to address the west and central African concerns in the cotton sector in the form favoured by these governments, preferring instead to discuss broader issues of market access for clothing and textile products using both cotton and man-made fibre. Comment: This struck at the heart of the debate on domestic agricultural support in OECD countries, by challenging a major policy plank in an area which clearly had adverse effect on some of the poorest developing countries. In this context the strong position taken by the Group of 21, led by Brazil, India and China, with heavyweights such as Egypt also joining in, was always going to lead to head-on disagreement. The Group of 21 put forward a framework proposal calling for more extensive cuts in domestic support and less stringent access commitments for developing countries. This proposal signalled a readiness to fight for major changes in the draft text put forward, particularly in the area of domestic support for agriculture. The G21 in particular objected to the draft text's willingness to protect US and EU subsidies in the 'blue box' category, which covers subsidies linked to production restraint. The G21 paper called for the elimination of the blue box and tighter disciplines on domestic support for products which are primarily exported (the modification on June 26th 2003 of the Commission's initial CAP-reform proposals made it more difficult for the EU to agree to these types of proposals). These proposals were intended to target the dumping of commodities by rich countries where subsidies allow the good to be exported at below the production costs of the developed country. On market access the G21 called for developing countries to agree to minimum and average reductions to all tariffs but with developed countries subject to much more significant tariff reductions. The G21 proposal also suggested different 'special and differential treatment' rules for net food-importing developing countries. The EU criticised the G21 paper as 'flawed' since it asked developed countries to make concessions while little was asked of developing countries. This, Commission spokespersons maintained, was unrealistic.The following web link provides access to the second revised draft of the..