Representatives from key World Trade Organization countries recently broke an agriculture negotiations logjam that threatened to slow down talks for a planned WTO ministers’ meeting in December.
Donald Stephenson, Canada’s permanent representative to the WTO, said in a March 18 interview from Geneva that the issue had been affecting progress in the market access talks.
The European Union was refusing to translate its tariffs from specific levels to an ad valorem basis Ñ a percentage of the import value Ñ to be used in the negotiation. The EU wanted a guarantee that the final deal would allow it to revert to fixed tariffs, no matter what the value of the imported commodity.
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“That is something to be negotiated and the Europeans wanted to short-circuit the negotiations,” said Stephenson.
“There was resistance and the dispute was holding up the start of real market access negotiations.”
The issue was resolved during a recent meeting of some WTO ministers in Kenya, where they reaffirmed a promise to make negotiating progress by July in preparation for a full ministerial meeting in Hong Kong in December. The goal is to complete the negotiation started in 2001 by the end of 2006.
Stephenson said the tariff calculation issue had hampered negotiations in Geneva for weeks.
“It was boring as an issue but it held the rest of the negotiations hostage,” said the Canadian trade official. “I would say resolving that was the most important thing to come out of Kenya.”
Canada was a side player at the meeting because it did not send a minister.
Stephenson said the mood of ministers and WTO negotiators is to press ahead for at least the outline of a deal by the end of July, with more details to be pinned down by the Hong Kong meeting, where ministers will be expected to make the political decisions necessary to send the talks into their final stage.
And he said the goal is for an “ambitious” result on market access that really forces countries to allow more imports.
Some countries that negotiated high “bound” tariff levels in the last WTO agreement in 1994 but then set actual tariffs at less-than-maximum levels, want any new cuts to be from the bound tariff base. For example, if a country had an allowable bound tariff level of 400 percent but actually applied a 200 percent tariff, it could absorb a 50 percent tariff cut without being required to reduce the real trade-distorting tariff.
Stephenson said cuts must be from the actual tariff levels.
“Ministers have had a fairly full consensus that what we are looking for in market access negotiations is real new market access,” he said. “That is what we are aiming for.”
The market access negotiations are being watched nervously by Canada’s supply managed sectors, which have insisted high over-quota tariffs on dairy, poultry and egg products must not be reduced. Talk of deep cuts in actual tariff levels would open them up to increased competition from cheaper imports.
Negotiations in Geneva have yet to get to the stage of exchanging detailed market access proposals to give a hint of how Canada’s defence of over-quota tariffs will fare.
