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A Background Position Paper for “People’s Forum on WTO”: A Parallel Forum of Civil Society alongside the G20 Ministerial Meeting in Pakistan from 09-10 September 2005

By Mr. Tahir Hasnain and Ms. Angela Wauye (Food Security Coordinator, ActionAid International-Kenya)

• Background
• Issues in Agriculture Negotiations from the Developing Country Perspective
• Why the Agriculture Negotiations must Halt?
• Role of G20 in the WTO Negotiations
• Why the Current G20 Ministerial in Pakistan is Important?
• Can G20 Bring Surprises in the Hong Kong Ministerial?
• Conclusion and Recommendations

The sixth Ministerial Conference of the World Trade Organization (WTO) is scheduled for Hong Kong from 13-18 December 2005. The WTO regime that established in 1995 at the culmination of Uruguay Round of negotiations, is shaping the lives of million of peoples in all continents. The ten years old organization has failed against its claims to facilitate the global trade in order to maximize the economic gains and human welfare. The organization has not been able to perform the designed functions with impartiality and transparency. Rather it provided an institutional cover to the unfair trade practices of big economic powers.

In view of bitter experience in last ten years, the developing countries have now started voicing against unfair economic interests of developed countries. A strong resistance from the civil society as well as developing countries resulted the Seattle and Cancun Summits in 1999 and 2003 into a fiasco. The 9/11 incident and absence of civil society mobilization during Doha Summit in 2001 in allowed the big trading powers to deceive developing countries to sign on to the so-called “Doha Development Agenda (DDA)” and to expand the ambit of the WTO.  The DDA negotiations, however, forced the developing and least developed countries (LDCs) to form different political groups within the WTO. G20 (a group of 20 developing countries joined together to support each other with regards to WTO negotiations on agriculture) has emerged one of the influential groups within WTO. G20 is also considered a key element of the Cancun Ministerial failure. G33 is another useful initiative that demands provision of special products (SPs) and special safeguard mechanism (SSM) in agriculture and many member countries of G20 are also part of G33. The Group comprises 42 developing countries at the moment. The G90 effectively opposed attempts by the US and EU to include Singapore issues -- investment, competition policy, transparency in government procurement and trade facilitation – during the Cancun negotiations and G90 is another key element of the Cancun Ministerial failure. The Group is based on African Group, ACP (Africa, Caribbean and Pacific) and the LDCs (Least Developed Countries) and contains 64 member countries at the moment.

Between Cancun Ministerial and the General Council Meeting of WTO in July 2004, developed countries used a range of unfair tactics (mini-Ministerial meetings, bilateral pressures, bilateral incentives, formation of G5 also known as FIPS-Five Interested Parties, etc.) to divide developed countries and consequently, they succeeded in signing the July Framework Agreement. The sixth Ministerial Conference of the WTO is scheduled for Hong Kong from 13-18 December 2005. The July Framework Agreement for modalities is now guiding the current WTO negotiations towards Honk Kong Ministerial.

The WTO Ministerial is the supreme decision making body. The crucial negotiations on Agriculture during Hong Kong ministerial are going to determine the future of global agriculture and more especially the fate of small farmers in developing countries. The rich countries still provide huge subsidies and high protective measures to their corporate agriculture and they are reluctant to reduce any support to their agriculture in the current negotiations. Resultantly, world agriculture prices have downward trends because of the dumping of agriculture goods in global markets by rich nations. The rules of game are being determined by powerful rich nations, while poor nations are facing the effects of these unfair practices in the form of poverty and inequality. If the agriculture agreement is agreed on the basis of July framework, it would have serious repercussions on the agriculture, livelihood and rural development in developing countries.

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Whilst it is nearly one decade since the conclusion of Uruguay Round of negotiations and establishment of WTO as a multilateral framework for negotiation, implementation and administration of multilateral trade agreements, the attainment of most of the WTO objectives remain a tall order for most developing countries. A reality check shows that the living standards in majority of WTO Member countries, particularly in the G90, have gone down, unemployment has increase, volume of real income and effective demand continue to dwindle while the objective of sustainable development remains under serious threat. Over the past ten years these countries' share of trade has declined, an indication of the extent of marginalization especially in sectors such as agriculture.

The following facts and figures in general and of agriculture in poor countries attest to this:

• In 22 of the 39 least developed countries for which data are available, trade accounts for more than half of GDP—a larger share than in high-income OECD countries.

• Primary product exporters have the highest poverty; with more than 80 per cent of the people in mineral-exporting countries living on less than $1 a day at the end of the 1990s, compared with 43 per cent in service exporters and 25 per cent in manufactured goods exporters (excluding Bangladesh).

• In the period 1999–2001, the trade deficit was over 10 per cent of GDP in 25 out of 44 LDCs for which data are available, and over 20 per cent of GDP in 8 of them.

• It is estimated that protectionism in the rich world costs developing countries US$100 billion annually in lost opportunities to trade. This is twice the money that poor countries receive each year in aid. (Trade and Development report, UNCTAD 2003).

• According to an FAO estimate, more than 2.5 billion people in the developing world are dependent on agriculture for their livelihoods.

• The number of people suffering from malnutrition is estimated at 852 million people between 1999 and 2002 (FAO report, Dec 2004). Paradoxically, the majority of people affected by hunger and malnutrition live in rural areas, which are the main food producing areas;

• More than 800 million people go to bed hungry every day of which 300 million are children. Out of the 300 million children only 8 per cent are victims of famine or other emergency situations. More than 90 per cent are suffering from long term malnourishment and micro-nutrient deficiency;

• In 1960, Africa was a net exporter of food – to day the continent imports one third of its grains;

• As per trend analysis by FAO 1999, developing countries face import bills 20 percent higher than in the mid 1990s, dependency on commercial imports of basic foodstuff has increased and will continue to rise with further liberalization.

• FAO study (1990-94, 1995-98) – food import bill increased in Pakistan, Bangladesh, etc. And it has doubled for India and Brazil.

• Agriculture in Developing Countries is the main source of income, employment and economy. Hence, any change in agriculture is likely to lead to mass socio-economic disorder;

• As compared to only 4 percent in developed countries, agriculture employs 70 percent of the population in developing countries.

• Agriculture accounts for 34 percent of the GDP in developing countries as compared to 1.5 percent in developed countries.

• Agriculture provides 27 percent of the foreign exchange in developing countries as compared to 8.3 percent in developed countries.

• Agriculture in developing countries is traditionally for subsistence as compared to export oriented sector in developed countries.

• Food consumption is large share of expenditure in developing countries.

• Subsidies in OECD countries nearly US $ 360 billion - increased more than 9 percent as compared to 1986-88.

• Trade barriers to developing countries include SPS (Sanitary and Phytosanitary) Measures, Eco-labeling, Labor Standards, Environmental Standards, etc.

As shown above, agriculture is a very fundamental and sensitive sector in most of the developing as well as least developed countries where the lives, livelihoods and culture of 70-90 percent population depends on agricultural activities. While it is challenging at the moment for poor countries to compromise on agriculture in the WTO negotiations, developing and the least developed countries do have high hopes to compete and get larger agricultural market access in rich countries in order to boost up their level of economy.

During current WTO negotiations, as a consequence, the agriculture has appeared the key to any progress in the ongoing stalled WTO negotiations.  Without movement in the agricultural negotiations, movement in the other areas would not translate into a successful liberalization package in Hong Kong. The framework on Agreement on Agriculture has several flaws related to its three pillars i.e. market access, domestic support and export subsidies. The framework does not seem friendly to the farmers in developing countries. It expands mechanism of massive subsidization that Northern countries give to its agriculture sector under the “Green Box” and the “Blue Box” and demands additional market access to Southern countries.

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Developing countries have paid many times for promises of new market access during the Uruguay Round, through the Agreement on Agriculture (AoA). The supposed benefits to the poorest developing countries from the Uruguay Round have simply not materialized because the UR-Agreement on Agriculture delivered a massively unbalanced deal in favor of rich nations and their transnational corporations. Needless to say, developing countries are being asked to pay again during the Doha Round. This Round should rather be made a free Round for developing countries, particularly, the poor developing countries.

The July Framework on AoA sets out negotiations guidelines and principles for the remaining stage of the Doha round of trade negotiations. So far, there is no adequate concrete commitment from developed countries including major subsidy users to substantially reduce and further, provide an end date to export subsidies.  Doha mandate has been diluted so much and cannot be relied upon to effectively establish and strengthen development structures that have for many years been weakened or eroded by the structural adjustment programs enforced by the international financial institutions in most of the developing countries.

Below are ten reasons to halt the ongoing agriculture negotiations:

              I.      Defective Framework: July Framework is defective in many aspects and is geared towards promoting developed countries’ protective trade regimes at the expense of developing countries. It is expected that it will perpetuate market distortions and protectionist trade regimes in the developed world. The Framework is being used to legalise EU and US farm policies. For, instance, it provides for an expansion of blue box, continued application of Article 5 of AoA, introduced a new concept on ‘sensitive products’ and demands that developing countries reduce their de minimis support. Apparently, developed countries maintain more or less similar access to all those components that developing countries have within the context of special and differential treatment (SDT). For instance, special products vs sensitive products; SSM vs SSG; both to reduce de minimis; expansion of blue box, no early end date to eliminate export subsidies, etc. On the whole, the framework is imbalanced towards the interests of developing countries.

           II.      Lack of a Balanced Approach within the Agreements: The current trajectory of trade negotiations depicts an imbalanced approach in negotiations between (i) AoA, NAMA (Non-Agricultural Market Access) and GATS (General Agreement on Trade in Services) and (ii) within the three pillars of AoA. More emphasis is placed on issues that interest the developed countries whereas those at the heart of developing countries are given back stage. As pressure amounts towards coming up with a “first approximation”, too much emphasis continues to be placed on market access issues while no indication at all of when and how export subsidies would eventually be eliminated. It is evident that the Doha Mandate has been watered down and establishment of a balanced approach between and within the three pillars has been lost.  The level of ambition of developed countries is quite high on market access, but there is no political will on their part to ensure the same with respect to elimination of export subsidies and substantial reduction of domestic support. More so, they are demanding too much on NAMA and Services negotiations, without showing political goodwill to make any meaningful concessions on Agriculture.

         III.      Past Unilateral Reforms: Developing countries have, by and large, undertaken more drastic unilateral reforms under IMF/WB conditionalities than any other developed country member of WTO. Yet, regardless of this, they are not immune to the demands to further liberalize their markets. In the past, developing countries have, by and large, undertaken drastic and far reaching reforms, either unilaterally as a condition to accessing the IMF/WB funds or through IMF/WB structural adjustment programs that paved way for deepening trade liberalization in poor countries. Market access negotiations on both agricultural and industrial products does not recognize and give credit for past reforms already undertaken by the developing countries. This indeed signifies lack of commitment to integrate development concerns in the current talks.

        IV.      Special Safeguard, the height of Trade Injustice: The Special Safeguard under AOA Article 5 is a classic example of trade injustice arising from the imbalanced UR trade negotiations. Countries who needed this tool to safeguard domestic interests due to the nature of their economies and livelihoods security concerns could not access it. While putting numerous non-tariff barriers and other measures to regulate their imports, the affluent economies, on the contrary, continue to enjoy an automated special safeguard (SSG) that is easily invoked to protect their sectors from import upsurges. The July Framework maintains SSG as a subject for further negotiations. This is unacceptable given that it confers undue advantage to developed countries yet is not discussed nor seen at all within the context of SDT. Developing countries should rather seek redress or credit for damages caused by the UR’s oversight regarding not offering safeguard to poor developing countries.

           V.      Special & Differential Treatment (SDT), a mere Rhetoric: The SDT within the WTO context is mere rhetoric with no concrete commitment from developed countries to allow for appropriate flexibilities and policy space that would enable, particularly, the poor developing countries rejuvenate their ability to participate in the global trading arena as well as meet their national development needs.

Doha mandate provides that SDT shall be an integral part of all elements of negotiations. The way SDT has been perceived and understood in the on-going negotiations portrays an outright refusal to recognize the structural difficulties facing most poor developing countries. It’s better to face the fact than deny the fact. No meaningful SDT shall be provided to developing countries as a ‘block’ until the issue of “categorization” of developing countries is addressed. Countries should stop negotiations and go back to the drawing board; until we get the basics right, we are moving nowhere!

      VII.      SPs & SSM Increasingly being Watered Down: The concept of SPs and SSM are probably few examples of concrete and operationally effective SDT that developing countries expect upon conclusion of the Doha talks. With SPs and SSM tied to conditionalities, the whole concept is already diluted and would slowly loose its relevance as one of the major ingredients of development.

The twin concepts of SPs and SSM should be seen as vehicles to achieving rural development, food security and livelihoods security concerns. The SPs and SSM concepts, thus, confer the much required policy space for the attainment of basic human rights such as the right to food, decent standards of living, basic social services such as health, education etc. The flexibility within SDT has, however, been used only as a transitory measure (e.g. longer implementation period for developing countries etc). Negotiations have failed to recognize some very specific factors that directly affect rural development and food security and livelihoods concerns in very poor developing countries, namely; high prevalence of HIV/AIDS, relatively high cost of HIV drugs coupled with hunger and malnutrition, climate change and variability, different agro-ecological zones supporting different crops and pastoral activities, government strategies for reviving agricultural sectors, gender dynamics in agriculture etc. The conditions attached to these concepts e.g tying SPs to tariff reduction formula, coupled with technical complexities in negotiations will not deliver the required latitude in terms of policy space. Hence, the negotiations are better off stopped.

   VIII.      Sensitive Products, a guise to Perpetuate Protectionism: The introduction of ‘sensitive products’ is likely to mean that developed countries can hang onto high import tariffs on certain products, possibly on the same products – i.e. sugar, dairy and meat products – that are so heavily dumped in developing country markets. This potentially dilutes the SP concept in terms of developing countries’ both offensive interests (seen from entry barriers) and defensive interests (seen from dumping of products).

        IX.      Lack of an End date to Elimination of Export Subsidies: A credible end date should have been considered by heavy users of this category of subsidies as a commitment towards its elimination. Export subsidies (i.e. on sugar, meat and dairy products) are likely to continue for another 10-12 years as one member state of the EU has already stated that they would seek a timetable for cuts towards ‘a horizon of 2015 or 2017’. Apparently, these countries are trying to legalize their national reforms within WTO. Moreover, it has been established that there are many domestic subsidies that are considered hidden indirect export subsidies. For example, domestic support given to wheat farmers under the policy of EU-CAP (Common Agricultural Program) enabled farmers in the UK to sell animal feeds in mid 2005 as low as £71 per tone when it costs £100 a tone outside its border. It is a kind of dumping. Noting the lack of concrete commitment to eliminate trade distorting export subsidies, the negotiations should be stopped to allow room for more reflections.

           X.      “Juggling between boxes”: Given the complex nature of technical negotiations and lack of convergence on treatment of domestic subsidies, the current negotiations are moving from bad to worse, with the resultant effect of trade distorting subsidies being shifted from blue and amber boxes to the green box where they are deemed safe. As a consequence, the movement of subsidies between the amber, blue and green boxes will do little, if anything, to reduce trade-distorting support. The interaction of the green box with other policies (i.e. supplementary trade distorting amber and blue box subsidies) certainly have a ‘coupling’ effect on ‘decoupled’ green box payments. The expansion of the blue box to accommodate the US counter cyclical payments is, for instance, aimed at making AoA compatible with US farm policy and not the other way round. This is not only absurd but devious, noting that the blue box was always intended as a transitional and temporary 'box', as subsidies are moved from the most trade distorting type amber to least or minimally trade distorting green box. The new 5 percent cap of the blue box means that the EU will be able to use up to 12 billion euros and the US up to 10 billion euros. The EU applied levels will be less than this but the US will probably use all of their blue box allowance. However, in both cases dumping will still continue.

        XI.      Undue influence of the FIPs: FIPs (Five Interested Parties) is the "underground" process that led to the July Package, gave rise to the July Framework Agreement, upon which the current negotiations are based. This raises very fundamental questions regarding transparency and democracy issues within WTO. An agreement among a handful of countries could never form a basis for consensus in a multilateral framework. The influence by the FIPs (comprising US, EU, Australia, India and Brazil) on the shape and content of the July Framework should be regarded as the most unfortunate decision ever taken during the Doha Round. Positions taken by the Brazil and India, whether in AOA, NAMA or Services, can never be representative of the interests of poor developing countries. The essence of democracy in any negotiation is to allow views of various interested parties to be heard and a decision is taken there from.

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As a result of over time experience and more specifically during the DDA negotiations, developing countries and LDCs decided to form different political groups within the WTO to cope with unfair demands of developed countries. G20 has emerged one of the most important groupings in the WTO negotiations since the Cancun ministerial in September 2003. G20 countries are united to support each other with regards to WTO negotiations on agriculture. It has become an influential group within WTO and is also considered a key element of the Cancun Ministerial failure. Led by Brazil and India, the G20 is comprised of 19 agricultural exporting developing countries. As of August 2005 the group comprised of Argentina, Bolivia, Brazil, Chile, China, Cuba, Egypt, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Philippines, South Africa, Tanzania, Thailand, Venezuela and Zimbabwe.

The emergence of the G20 raised some hopes for a better deal for the third world but this has been belied since. A significant failure has been the inability of the G20 to fundamentally question the approach underlying the AoA that privileges the export led model, permits protection in the North and opens markets for them in the South. Despite their rhetoric of representing third world farmers the group has failed to respond to the concrete demands of agrarian communities (on whose behalf they claim to be negotiating), get tangible commitments from the EU and US on the elimination of trade distorting subsidies and provide market access for commodities from the South. 

The G20 has gave way to the unfair interests of the US and EU and its two influential members, India and Brazil, have joined the FIPs (Five Interested Parties) with developed nations such as the US, EU and Australia. The FIPs role is mainly to broker a deal for increased market access for agribusiness interests in both the developed and developing world. The infamous green room process is being sanctified with the FIPs and the “anti-development July Framework” is its first contribution that is now a primary driver of the Doha round.

The G20 has failed to project a clear distinction between ‘corporate agriculture’ of developed countries and ‘sustenance agriculture’ of developing countries as an important component of the negotiations. The G20 proposal for reduction of subsidies by the developed world is of no use. It is well known that agricultural subsidies given by the EU under the CAP will continue till 2013 and cannot be withdrawn before that. Moreover US subsidies under the 2002 Farm Bill is for a period of 10 years i.e. till 2012. So irrespective of the G20’s heroic rhetoric, there will be no reduction in subsidies at least till 2012. Even the G20 demand on export subsidies grant developed nations 5 years for elimination. This means that up to 2011 (from Jan 2006), export subsidies will continue. In view of the fact that more than 2.5 billion people in the developing world are dependent on agriculture for their livelihoods, what will happen to them if subsidies continue till 2012-13?

On the cotton issue, the G20 has failed to get a firm commitment from the US for withdrawing subsidies to its cotton growers as well as other export credit guarantees benefiting other commodities. Moreover, the US has not taken any action on the WTO DSB (Dispute Settlement Body) ruling to reduce subsidies to cotton farmers.

Rather than highlighting fundamental issues confronting farmers and agricultural labor, the G20 has focused on the narrow subject of market access. In July 2005 the group proposed a market access formula for tariff reduction (a middle ground between the Swiss and Uruguay round formulae), which has been widely accepted as a basis for further negotiation. This proposal calls for a banded approach to tariff reductions with 4 bands for developing and 5 for developed countries. Each band would be subjected to a linear tariff reduction approach with overall caps on high tariffs differentiated between developed and developing countries. Market access will primarily benefit agri-business interests in countries like Brazil and will do little to solve the agrarian crisis in the South. The G20 is today playing the role of a new developing country CAIRNS group.

Despite the G20 focusing on market access, SPS measures and technical barriers to trade (TBT) are frequently used by developed nations to stop imports from developing countries. Moreover protection of sensitive products is allowed for developed nations and they can now term certain commodities sensitive and thereby deny market access. Further, the developed world also uses Special Safeguard (SSG) to restrict imports from developing countries – Canada reserves the right to use SSG for 150 tariff lines, EU for 539 tariff lines, Japan for 121 tariff lines, US for 189 tariff lines and Switzerland for 961 tariff lines. On the other hand only 22 developing countries can use SSG.

The G20 demands for operationalising the instrument of Special Products (SPs), as a protective measure to check import surge will not be useful for the biodiversity rich South. In G20 countries, farmers cultivate hundreds of crops in a year whereas Europe does not grow more than 25. It will be possible for Europe to get a dozen or so products classified as sensitive. But it is well nigh impossible for the biodiversity rich G20 countries to get this status for over 100 crops. Hence this would not render any protection to small farmers from import surges. The G20 along with the G-33 (the coalition on SPs and SSM) should demand complete flexibility to declare any products as SP and use SSMs whenever they feel threatened with import surges and dumping.

The G20 has also failed in reclaiming the right to reinstate Quantitative Restrictions (QRs) to protect the interest of their agricultural producers, while developed countries have evolved a clone of the QR system in the form of Tariff Rate Quota’s (TRQ’s), where a fixed volume of imports is allowed at a lower tariff rate and beyond that level, imports are allowed only at prohibitive tariffs. Claiming and justifying the right to use QRs is an important policy mechanism to protect agrarian communities from subsidized imports. Reinstating QRs will provide developing countries a space for exploring and working out appropriate strategies for national development that protect the interests of their agricultural producers.

The G20 has not yet got a commitment from developed nations especially the US for the mandated review of the Agreement on TRIPS as well as its revision to exclude Patent on life and indigenous knowledge and resources.

The EU and US are exerting enormous pressure on the developing world to agree to their framework for negotiations while not showing any commitment in reducing their levels of direct and indirect subsidies. Meanwhile they expect developing countries to concede in NAMA and Services. They are also putting pressure on poor countries to bring down tariffs to the existing applied rates and close the gap between bound and applied rates.

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The next Ministerial Meeting of the G20 will be held in an exclusive hill resort in Bhurban (Murree Hills – Rawalpindi) from 8-10 September 2005. The Bhurban meeting is important for several reasons. It follows the unsuccessful WTO General Council meeting in Geneva in July 2005. In is also important to note that Mr. Pascal Lamy has joined his office as new Director General of the WTO from September and he will begin intense consultations with groups such as the G20 for a Draft Hong Kong Declaration, which he will attempt to have ready by the next GC meeting in October 2005.

As a matter of fact, Agriculture has appeared the key to any progress in the ongoing stalled WTO negotiations. Without movement in the agricultural negotiations, movement in the other areas would not translate into a successful liberalization package in Hong Kong. Agriculture has the potential to make or break the Doha round and the G20 will play a central role in this drama.

At the WTO “mini-ministerial” meeting in Dalian - China, on July 12-13, the G20 countries tabled a proposal that is said to be providing the basis for a breakthrough in the market access area of agricultural liberalization. However, during the recent General Council meeting of WTO held in July, the member countries failed to harvest “first approximations” draft. On agriculture, the EU has shown her favor for only three bands. The framework is now likely to be adopted once the negotiations resume in early September, with the debate shifting from modalities to who belongs to which band and the rates of tariff reduction for each band.

It is also worrisome that despite the stalemate on domestic subsidies, there is movement on two of the three pillars of the agricultural negotiations. This could not only give momentum to the unresolved issues in the agriculture negotiations but may also open up the path to agreement in the other negotiating areas of NAMA and services.
 

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Although the negotiations ahead of the sixth WTO ministerial conference point to failure, past experience shows that surprises cannot be ruled out. As compared to others, G20 has the negotiating capacity that could bring surprises in the Hong Kong Ministerial aiming at reducing the distortions in global trade caused by the rich world's farm subsidies and trade barriers. The interests of farmers, agricultural labor and the overall economies of poor countries are in the hands of the G20.

The episodes of Seattle, Doha and Cancun are the witnesses that poor nations can resist the hegemony of rich countries and bring surprises. The partial success of developed countries during the Doha Round to expand the ambit of the WTO was only because of the post 9/11 incidents and absence of the civil society mobilization. The current Doha Development Round of multilateral trade talks was launched on foundations considered promising for developing countries but the July Framework Agreement was, however, an unfortunate decision in the run up of Hong Kong Ministerial that happened through an exclusive and undemocratic process in which developed countries benefited through dividing the developing country groups especially the G20.

Hopes for pro-poor progress in the talks are now pinned on the next WTO conference, slated for Dec. 13-18 in Hong Kong. Pre-ministerial meetings in July were supposed to give rise to a first draft of the agreement to be signed by the ministers of the 148 WTO member states, but a minimum level of consensus was not reached.

 
The current negotiations are complex, because an agreement will require a consensus among 148 countries. Despite the fact that unexpected deals could be struck at the last minute, the overall mood is one of pessimism and predictions of a new failure. If this happens, it would put pressure on the developed countries to rethink their positions on basis of ground realities and not just based on their self-centered demands. If the G20 sets forth proposals for agricultural trade with no distorting subsidies or "exaggerated protectionism, the civil society across the world will approve and support the performance of the G20 bloc.

Agriculture has become the key issue in the Doha Round, largely due to the action of the G20, which is now one of the main players in the talks, along with the United States and the European Union. The crucial negotiations on Agriculture during Hong Kong Ministerial are going to determine the future of global agriculture and more especially the fate of small farmers in developing countries. The G20 countries must take bold positions along with other groups of developing countries as well as LDCs i.e. G33 and G90. For instance, agriculture is a week area for Developed Countries and if the G20 link 100 percent outcome in agriculture with any further progress on rest of the WTO pacts, the unjust WTO system could be shaken. G20 and G90 followed similar approach at the Cancun and were able to block the unfair negotiations process.

Hence, the G20 bloc's main proposals should involve complete phasing out of export subsidies over the next few years, scaling down domestic production supports that distort trade, and drastically reducing the prohibitive tariffs set by industrialized countries on some farm products. In a recent South Asian Parliamentary Forum2, the parliamentarians called upon Members of the G20 to build defensive as well offensive positions that promote the interests of people and economies of poor countries and to continue efforts to strengthen unity and solidarity among developing countries as well as LDCs.

It is also important to note that the negotiations are now taking place in a new scenario, since Brazil triumphed in its complaints before the WTO against EU subsidies for sugar and U.S. supports for cotton farmers. In the Doha Round, the G20 must not accept accords containing conditions that are less favorable than those set by the WTO dispute settlement body rulings in the cases involving sugar and cotton.

The G20 is also expected to do well due to the diversity of the bloc's makeup that allows it to be more flexible than the other groups such as Cairns Group. The G20's strength and legitimacy derive from several factors. Firstly, the weight of the bloc's members, which account for 60 percent of the world population and 26 percent of global farm exports. It also underscores the G20's capacity to represent the interests of developing countries, as well as its demonstrated negotiating ability. Secondly, the G20 is a heterogeneous but geographically balanced bloc, made up of eight countries from Latin America, six from Asia and five from Africa. Besides Brazil and India, its members include China and other large countries like Argentina, Egypt, Indonesia, Nigeria and Pakistan. The group has already shaken up the hegemony enjoyed by the industrialized powers in the multilateral trade talks. Thirdly, although it comprises both large agricultural exporters and net importers, which would apparently have different interests and which resort to varying levels of protectionism, the G20 could remain united in the fight against farm subsidies, protecting their agriculture sectors as well as rights of their farming communities and in favor of greater access to agricultural markets in the North.

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G20 meeting in Pakistan is being convened after the recent General Council meeting of WTO during July 2005. G20 has emerged an influential group within WTO and the group has the potential to make or break the Doha round. Developed countries are united to not to liberalize their market, more specifically the agriculture sector, and deceive poor countries through various strategies to divide them, buy them or put them under pressure. In this scenario, the G20 countries have the change to resist the hegemony of rich countries and make the multilateral trading system fair. G20 countries has the responsibility to take care of their farming communities and they should stand together unless tangible commitments from the EU and US on the elimination of trade distorting subsidies and provision of handful market access for commodities from the South are not achieved.

It is recommended that the following basic fundamentals must be addressed during the forthcoming WTO negotiations on agriculture:

1)   The July Framework needs to be reviewed before any further negotiations. The framework is a result of a undemocratic process and hence, is defective and confers aspects of an ‘early harvest’ to US and EU in terms of a differentiated treatment as seen in the expansion of the blue box, sensitive products etc. and will not address trade distortions.

2)   SDT for poor developing countries should be differentiated from those of advanced countries and must confer adequate flexibilities and policy space.

3)   Developed countries must take concrete measures by announcing an early end date for elimination of export subsidies.

4)   In view of the fact that agriculture in poor countries is of subsistence nature and involves 70-90 percent of the population as compared to corporate farming in the North, the G20 countries should put forth defensive positions to safeguard their agriculture sector, farmers and farm workers. Any compromise on agriculture is likely to lead mass socio-economic disorder in agro-based poor countries.

In conclusion, it would be very important for developed countries to rethink their negotiating mandate while keeping in mind the need to ensure that concrete development agenda must hold centre stage during this “modalities” stage. Without an integration of concrete development ingredients in the current trade talks including recognition of past reforms undertaken by the poor developing countries and, a practical commitment to eliminate trade distorting subsidies by a given early end date, poor developing countries MUST NOT accept to undertake any further commitments whether in Agriculture, NAMA or Services.
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1 Updated from “G20: Not representing farmers interests”, Focus on the Global South, India, 8/31/2005, Response to the G20 Ministerial Meeting in Pakistan (8-10 September 2005).

2 “South Asian Parliamentary Forum on WTO” held in Islamabad – Pakistan from 29-30 August 2005. The Forum was organized by the ActionAid-Pakistan, WTO Watch Group (WWG) and Sustainable Agriculture Action Group (SAAG).

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