[Peace-discuss] Fwd: Africa: Cancun, Agriculture

[Alfred Kagan]

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>Date: Fri, 12 Sep 2003 11:40:47 -0500
>Subject: Africa: Cancun, Agriculture
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>AFRICA ACTION
>Africa Policy E-Journal
>September 12, 2003 (030912)
>                    
>Africa: Cancun, Agriculture
>(Reposted from sources cited below)
>
>African cotton producers, with their explicit demand for
>compensation for damages caused by U.S. subsidies to their famers,
>have taken center stage in discussions on agriculture at Cancun.
>And a group of developing nations known as the G21, including
>India, Brazil, and China as well as South Africa and Egypt, has
>issued a strong statement on agriculture, demanding that it be the
>new basis for discussion on this key issue. The group is growing,
>having changed its name recently from G20 to G21 with the addition
>of Egypt.
>
>The Indo-Asian News Service reported today that Deputy US Trade
>Representative Peter Allgeier was "perplexed" about why and how
>this group of countries came together.
>
>This posting contains the official proposal from African cotton
>producers, and a summary from Third World Network on the
>negotiations on agriculture.
>               
>In addition to sources cited in another posting today (Cancun,
>Overview), see the following e-journal postings from 2002 on Crops
>and Trade:
>http://www.africaaction.org/docs02/ag0209a.htm
>and
>http://www.africaaction.org/docs02/ag0209b.htm
>
>+++++++++++++++++end summary/introduction+++++++++++++++++++++++
>
>Draft Decision Concerning Measures in Favour of Cotton
>
>World Trade Organization (Geneva)
>
>August 22, 2003
>
>Geneva
>
>The Secretariat of the World Trade Organization in Geneva
>circulated the following draft declaration calling for the phasing
>out of all subsidies to cotton farmers within three years. These
>proposals were made by Benin, Burkina Faso, Chad and Mali.
>
>The following communication, dated 21 August 2003, has been
>received by the Chairman of the General Council from the Permanent
>Mission of Benin:
>
>I have the honour to submit to you in annex the Draft Decision
>Concerning Specific Measures in Favour of Cotton with a View to
>Poverty Alleviation.
>
>The four countries co-sponsoring the Sectoral Initiative in Favour
>of Cotton, Benin, Burkina Faso, Chad and Mali, would be most
>grateful if this document could be circulated to Members of the
>World Trade Organization, and examined by the session of the
>General Council scheduled for 25 August 2003.
>
>The Ministerial Conference,
>
>Recalling the provisions of paragraphs 1 and 3 of Article IX of the
>Marrakesh Agreement Establishing the World Trade Organization (the
>WTO Agreement) and the Decision-Making Procedures Under Article IX
>of the WTO Agreement agreed by the General Council (WT/L/93),
>
>On the basis of the recommendations contained in paragraphs 13 and
>14 of the Ministerial Declaration (WTO/MIN(01)/DEC/1) of the Fourth
>Ministerial Conference of the World Trade Organization (WTO), held
>in Doha (Qatar) from 9 to 14 November 2001,
>
>Recalling the provisions of Articles 7, 8 and 9 of the Agreement on
>Agriculture concerning domestic support, competition and export
>subsidies, and anxious to ensure open, equitable and just
>multilateral trade and to eliminate all distortions in the
>production and marketing of cotton, a product for which the four
>co-sponsors of the Sectoral Initiative in Favour of Cotton - Benin,
>Burkina Faso, Chad and Mali - have a recognized comparative
>advantage,
>
>Bearing in mind that, as indicated in paragraph 2 of the Doha
>Ministerial Declaration, "international trade can play a major role
>in the promotion of economic development and the alleviation of
>poverty",
>
>Having examined the request of the four (4) WTO Members, Benin,
>Burkina Faso, Chad and Mali, that co-sponsored the Sectoral
>Initiative in Favour of Cotton contained in documents TN/AG/GEN/4,
>TN/AG/GEN/6 and WT/MIN/03/W/2,
>
>Taking account of the strategic importance of cotton for the
>economies of the West and Central African Countries affected by the
>domestic support measures and the cotton export subsidies granted
>by certain countries to their cotton producers,
>
>Concerned at the serious consequences of the domestic support
>measures and export subsidies in favour of cotton for the economies
>of the developing countries, and particularly the least-developed
>countries (LDCs), affected by these measures, and for the social
>conditions of populations in the rural cotton-producing communities
>in those countries,
>
>Stressing the urgency of settling the problems faced by the
>countries belonging to the LDC group as a result of the domestic
>support measures and the subsidies granted to cotton,
>
>Decides as follows:
>
>1. Elimination of domestic support and cotton export subsidies
>
>1.1 WTO Members undertake to eliminate domestic support measures
>and subsidies for the production and export of cotton over a period
>of three (3) years from 1 January 2004 to 31 December 2006.
>
>This elimination shall take the form of a gradual decrease, in
>equal annual portions, i.e. a yearly decrease equal to at least one
>third (33.3 per cent) of the total level of subsidies granted.
>
>2. Transitional financial compensation mechanism
>
>2.1 WTO Members decide to establish a transitional financial
>compensation mechanism in favour of the cotton-exporting LDCs
>affected by these subsidies, for a period of three (3) years from
>1 January 2004 to 31 December 2006.
>
>2.2 Starting on 1 January 2004, and until the domestic support
>measures and subsidies granted to the production and export of
>cotton have been totally dismantled, Members that have granted
>these subsidies will be called upon to grant financial compensation
>equivalent to the amount of the loss in export revenue suffered by
>the LDCs affected by these subsidies, in conformity with paragraphs
>2.3, 2.4, 2.5 and 2.6 of this Decision.
>
>2.3 The annual amount of compensation to be paid shall correspond
>to the estimated losses suffered, calculated on the basis of the
>statistics supplied by the International Cotton Advisory Committee
>(ICAC) for the cotton seasons 1999/2000, 2000/2001 and 2001/2002.
>
>2.4 The amount of the overall financial compensation to be paid
>shall be adjusted in proportion to the subsidy reduction efforts of
>the countries contributing to the compensation fund.
>
>2.5 To that end, a compensation fund shall be created under the
>authority of a body to be determined, with responsibility for
>collecting and distributing the overall financial compensation
>mentioned in paragraph 2.4. The contributing countries shall be
>identified in accordance with the provisions of paragraphs 1.1,
>2.2, 2.3 and 2.4 of this Decision.
>
>2.6 The compensation granted to the LDCs shall be calculated in
>proportion to their respective shares in the production and export
>of cotton as communicated by the ICAC.
>
>2.7 At the national level, the management of financial
>compensations shall be the joint responsibility of the producers'
>associations in the countries affected and the competent national
>structures, under the supervision of institutions to be determined.
>
>3. Management and control of the elimination of subsidies and of
>financial compensation
>
>3.1 Members undertake to create, by 15 October 2003 at the latest,
>a mechanism for the control and elimination of domestic support
>measures and export subsidies in favour of cotton, which shall be
>operated by a committee set up to monitor the implementation of the
>above measures under the supervision of the WTO Committee on
>Agriculture (Special Session). This committee shall submit a
>progress report each year to the WTO General Council and the
>Ministerial Conference on the implementation of this Decision, and
>shall propose, where necessary, appropriate corrective measures.
>
>3.2 WTO Members shall be regularly informed of the implementation
>of this Decision through notifications submitted by the countries
>contributing to and benefitting from the compensation fund in
>connection with the work of the Special Session of the Committee on
>Agriculture.
>
>***********************************************************
>
>TWN Info Service on WTO Issues
>9 Sept 2003
>Third World Network
>http://www.twnside.org.sg
>
>TWN Briefings
>SOME KEY ISSUES IN CANCUN
>By Martin Khor
>
>[section on agriculture; for other sections of this briefing see
>separate e-journal posting today]
>
>AGRICULTURE
>
>This is expected to be Cancun's big fight.  In mid-August the US
>and EU got together and proposed: (a) a deal in which they would
>not have to give up or even reduce their domestic subsidies and
>they can escape from the Doha goal of eliminating export subsidies
>and disciplining export credits; (b) a "blended" formula for
>cutting tariffs in which their high tariffs can escape the net
>whilst the developing countries would end up with deeper cuts in
>more products; (c) nothing substantial on S&D for developing
>countries.
>
>This so outraged the developing countries that 20 of them
>(including Brazil, India and China) combined to come up with their
>own proposal that would: (a) commit the rich countries to
>significantly reduce their domestic subsidies of all types, and
>eliminate their export subsidies, whilst applying the "blended
>formula";  (b) provide S&D for developing countries, with less
>tariff reduction commitments, and the introduction of "special
>products" and a special safeguard mechanism (SSM) against import
>surges.  Some developing countries want more meaningful S&D and
>have their own proposals.  The Chairman's draft text on agriculture
>(especially in Annex A) has practically adopted the US-EU
>framework, with some weak and inadequate provisions for developing
>countries, some of which (like the SSM) would come with conditions
>and have still to be negotiated.  In Cancun, a battle between the
>EU-US position and the Brazil-India-etc proposal can be expected.
>Developing countries and social movements that are really concerned
>with the impact of cheap imports on farmers' livelihoods and food
>security will not see their concerns addressed satisfactorily.  For
>them it will be a case of how much damage will emerge. 
>
>What Should Be Done:  The Cancun draft on agriculture (Annex A)
>should not be accepted.  A new draft should be produced in the
>negotiations, that ensures that developed countries give up their
>export subsidies and domestic support measures within a short time
>frame, whilst strong protection is given for developing countries'
>small farmers and food security. If the complex issues cannot be
>resolved, the Ministers may just ask that further work be done in
>Geneva.
>
>***************************************************************
>
>Third World Network
>
>DEVELOPING COUNTRIES PREPARE FOR AGRICULTURE BATTLE AT CANCUN
>MINISTERIAL
>
>TWN Report from Cancun, 9 Sept 2003 (By Martin Khor)
>
>[excerpts only; for full report see http://www.twnside.org.sg]
>
>As the WTO's Fifth Ministerial Conference begins, developing
>countries have given notice that they will fight to the end of the
>meeting to ensure that their positions on the framework on
>modalities for agriculture negotiations will prevail over the
>present draft Cancun text on agriculture and the US-EU position on
>which it is mainly based.  
>
>On 8 Sept evening, the Group of 21 (G21) developing countries told
>a media conference (chaired by the Brazilian Foreign Minister) that
>they will insist that their framework proposal (first submitted in
>Geneva on 20 and 28 August, and now re-issued as a Ministerial
>document WT/MIN(03)/W/6 dated 4 Sept) be at the center of the
>agriculture negotiations in Cancun.  They rejected the text
>submitted by the General Council chairman, Uruguay Ambassador
>Carlos Perez del Castillo, as the basis of negotiations.
>
>At another media conference, chaired by the Indonesian Trade
>Minister, another group of 23 developing countries announced they
>had formed an Alliance for Strategic Products and Special Safeguard
>Mechanism (SSM) to fight for the interests of "small vulnerable
>resource-poor farmers from developing countries" through strong SP
>and SSM mechanisms in the Cancun outcome on agriculture.
>
>The G21 media conference, held after a Ministerial meeting of the
>group during which a Ministerial Communique was adopted, was
>addressed by the Ministers of Brazil, India, China, South Africa,
>Argentina and Costa Rica.  Brazilian Foreign Minister Celso Amorin
>said the meeting was a historic event in that so many developing
>countries which represented over half the world population were
>able to come together .
>
>He said the Ministers agreed it is key to keep their unity which
>will be tested throughout the Conference, and questions that may
>appear secondary or procedural will be important.  Amorin said the
>G21 Ministers agreed that the Castillo draft does not respond to
>their countries' needs and is not the basis for negotiations.  It
>is essential that the G21 paper is also taken as a basis and this
>can be easily done as it follows the same format as the Castillo
>paper.   Added Amorin:  "Ours is a good cause, we have the support
>of our population and a large proportion of world opinion, this is
>a chance for the WTO to show it cares for the poor."
>
>India's Commerce Minister Arun Jaitley said the group's formation
>was a very important ocassion as it marked an important point where
>developing countries representing 65% of the world's population of
>farmers, are attempting to put forward their own case.  "our
>document is not adequately addressed in the draft text and we will
>work together to ensure our points are addressed."
>
>South African Trade Minister Alec Erwin said it was historic the
>Ministers could unify positions across such major agricultural
>economies and exporters.  They were fighting for a balance that
>meets the requirements of a fair agriculture trading system with
>the main adjustment burden lying with industrial countries that are
>the main subsidizers.
>
>The Chinese Trade Minister said the G21 proposal involves
>developing countries' interests as the 21 countries represent 51%
>of world population and over 60% of the of the rural population of
>the world live in these countries.  He hoped the Ministers would
>consider the G21 text even as they are considering the Chairman's
>draft.  Cancun could only be a success if it fully takes account of
>developing countries' interests.
>
>The Argentinian Minister said the G21 proposal is both balanced and
>professionally well done and when the Conference starts the
>following day this paper must be accorded the same basis as the
>Chair's text, and this was not just a procedural issue but part of
>a constructive approach.
>
>The Costa Rica Minister said it was very hard for Third World
>farmers to compete not only with farmers from other countries, but
>also with Finance Ministries of the rich countries.  If Cancun is
>to make progress on other issues, such as non-agriculture products,
>we must have progress in agriculture too. ...
>
>Jaitley stressed two points in the alliance -- it had numerical
>backing (representing over half of humanity) and it is based on
>fairness in addressing agriculturaql trade distortions.  It would
>thus attract others too.   The Chinese Minister added that Cancun's
>success depends on whether it follows the fair competition
>principle and provides S and D for developing countries.  The G21
>proposal reflects this spirit and Cancun will succeed only if it
>heeds this. ...
>
>Ending the media conference, Amorin said in the past there was an
>impression that fighting for social justice took place outside the
>hall.  But now the fight for social justice is also inside the WTO
>and this is part of the historic moment. ,,,
>
>Meanwhile, another meeting was held by 23 developing countries that
>formed an Alliance for Strategic Products and Special Safeguard
>Mechanism.  Members include Barbados, Dominican Republic, Honduras,
>Indonesia, Jamaica, Kenya, Mnongolia, Nicaragua, Nigeria, Pakistan,
>Panama, Peru, Philippines, Trinidad and Tobago, Turkey, Uganda,
>Venezuela, Zambia, Zimbabwe, Tanzania, Ecuador.
>
>In a Ministerial Communique, the countries said the Alliance
>represents the interests of a majority of the world's small,
>vulnerable, resource-poor farmers from developing countries across
>the continents.  Their countries suffer undue stress imposed by the
>inequalities of the trading environment.  Even on their own
>markets, producers of developing countries face increasingly
>difficult circumstances and impoverishment.
>
>The Ministes reiterated the need for fundamental reform, including
>reducing and phasing out export subsidies, substantial reductions
>in trade distorting domestic support, and substantial improvements
>in market access.  For any reforms to be successful, S and D
>treatment must be an integral part of all elements so they can take
>account of development needs including food and livelihood security
>and rural development.
>
>While welcoming the Cancun draft's reflection of some developing
>country concerns, the Ministers stressed the S and D component
>falls far short.  The Alliance proposal for an SP and SSM mechanism
>must thus be an integral part of S and D.  The Alliance proposal is
>that:
>
>1. Developing countries shall have the flexibility to self
>designate a (  ) percent of tariff lines as special products (SPs)
>which shall not be subject to tariff reductions and no new
>commitments on tariff rate quota.
>
>2. A special safeguard mechanism (SSM) shall be established for use
>by developing countries as a mechanism to protect their domestic
>markets against cheap and subsidized imports.
>
>3. Products designated as SP shall also have access to the SSM.
>
>At the conference, the Indonesian Trade Minister said the 23
>countries met to form the Alliance earlier today following their
>earlier work in Geneva, aimed at having strong SP and SM mechanisms
>in the agriculture outcome.
>
>The Philippines Minister added it was very important that these
>mechanisms be available to protect the local agriculture sector
>from unfair competition from outside. ,,,
>
>+++++++++++++++++++++Document Profile+++++++++++++++++++++
>
>Date distributed (ymd): 030912
>Region: Continent-Wide
>Issue Areas: +political/rights+ +economy/development+
>
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-- 


Al Kagan
African Studies Bibliographer and Professor of Library Administration
Africana Unit, Room 328
University of Illinois Library
1408 W. Gregory Drive
Urbana, IL 61801, USA

tel. 217-333-6519
fax. 217-333-2214
e-mail. akagan at uiuc.edu