The Philippine Trade Negotiations Effort in Agriculture

The Philippine TradeNegotiations Effort

in Agriculture

The Philippine TradeNegotiations Effort

in Agriculture

TFWAR SecretariatDepartment of Agriculture

October 4, 2005

The Current International Trade

Environment

The Current International Trade

Environment

Typical Range,Average Bound Tariffs,

Agriculture,post-Uruguay

Typical Range,Average Bound Tariffs,

Agriculture,post-Uruguay

Developed ~1-10%

Developing ~30-60%

Developed ~1-10%

Developing ~30-60%

But developed countries …But developed countries …

account for most of tariff peaks and mega-tariffs;

dominate the application of trade remedies such as SSG;

routinely & creatively employ NTMs (SPS) TBTs;

dominate product standards-setting protocols (OIE, IPPC);

account for most of tariff peaks and mega-tariffs;

dominate the application of trade remedies such as SSG;

routinely & creatively employ NTMs (SPS) TBTs;

dominate product standards-setting protocols (OIE, IPPC);

on top of unlimited Green Box measures …

on top of unlimited Green Box measures …

USA, EU-15 and Japan: Bound Tariffs (2003)

Source: USITC and TARICNotes:1. Specific tariffs were converted into ad valorem equivalents and calculated according to COMTRADE/UN export unit values.2. N.C. – not calculated

USA EU-15 JAPAN

Average 12.3% 29.5% 42.2%

Median 4.4% 14.7% 12.0%

Standard Deviation 29.6% 40.3% 120.1%

Coeficient of Variation 2.4 1.4 2.8

Gini Index 0.7 0.6 n.c.

Maximum Tariff 350.0% 277.2% 2341.2%

Minimum Tariff 0.0% 0.0% 0.0%

Number of Tariff Lines 1829 2091 1862

% of tariff lines: equal zero 21.2% 19.1% 22.7%

% of tariff lines: 0% < t ≤ 30% 69.7% 50.7% 60.6%

% of tariff lines: 30% < t ≤ 50% 4.0% 12.5% 5.2%

% of tariff lines: t > 50% 5.1% 17.7% 11.5%

% of tariff lines: TRQs 10.7% 12.3% 7.1%

% of tariff lines: SSG 8.7% 26.9% 27.0%

% of tariff lines: Specific tariffs 41.6% 46.1% 17.1%

Final MFN Bound Agriculture Tariff ProfilesSelected WTO Members(Percentage)

Member- Simple Maximum Share ofCountry Average Ad Valorem Non Ad Valorem

Duty Duties

Argentina 32.6 35 0Australia 3.2 29 2.1Brazil 35.5 55 0Canada 3.5 238 26Chile 26 98 0EU(15) 5.8 75 40.8India 114.5 300 0.3Indonesia 47 210 0.4Japan 6.9 62 22.7Korea 52.9 887 4.8Malaysia 12.2 168 27.4New Zealand 5.7 35 0.7Norway 1.2 26 75.2Philippines 34.7 80 0Switzerland 0 0 82.6Thailand 35.5 226 45.5United States 6.9 350 49.6Note : Italicized bold data means more than 20% of 6-digit HS subheadings have at least one non-AV dutySource of data: WTO Integrated Database, World Trade Report 2004Prepared by Office of Agricultural Attache, Geneva PM-WTO, 9 March 2005

2004 Tariff Profile,Philippines2004 Tariff Profile,Philippines

Bound, 2004 Applied, 2004

Tariff lines, 8 digit

654 (per Schedule of Commitments)

1,407 (inclusive of extractions)

0%

- 3

0% <t<30%

178 (27% )

1221 (87% )

30% <t<50%

469 (72% )

179 (13% )

t>50% 7 (1% )

4

and …and … full utilization of de minimis;

while committing to 20% reduction of trade distorting support, were thus also allowed the retention of 80% of such support + the peace clause*; and,

continue to employ direct and other forms of export subsidies.

* Green Box DS measures cannot be the subject of CV duty action or other subsidy action; other DS measures w/c are in conformity w/ the provisions of AoA may be subject of CV duty actions, but due restraint is to be exercised by Members in initiating such actions (expired in 2004)

full utilization of de minimis;

while committing to 20% reduction of trade distorting support, were thus also allowed the retention of 80% of such support + the peace clause*; and,

continue to employ direct and other forms of export subsidies.

* Green Box DS measures cannot be the subject of CV duty action or other subsidy action; other DS measures w/c are in conformity w/ the provisions of AoA may be subject of CV duty actions, but due restraint is to be exercised by Members in initiating such actions (expired in 2004)

Major providersof trade distorting domestic

supportand export subsidies,

as of latest notifications(million US$ equivalents)Types of domestic support measuresAmber – production & trade distortingBlue – decoupled income support;

considered less, but still,distortive

Green – non- or least-distortive

production & trade distorting support give developed country exports artificial but effective competitiveness in international markets;

… unsubsidized developing country exports are edged out in these markets, particularly the developed country markets; and,

highly subsidized developed country producers have more access to developing country markets than developing country small farmers.

production & trade distorting support give developed country exports artificial but effective competitiveness in international markets;

… unsubsidized developing country exports are edged out in these markets, particularly the developed country markets; and,

highly subsidized developed country producers have more access to developing country markets than developing country small farmers.

… to the extreme prejudice of developing country trade interests

… to the extreme prejudice of developing country trade interests

Doha ‘Development’ Round:ORIGINAL Timelines in Agriculture

Doha ‘Development’ Round:ORIGINAL Timelines in Agriculture

DohaMC

DohaMC

Nov2001Nov2001

Mar2002Mar

2002May2002May2002

Jul2002Jul

2002Sep

2002Sep

2002Nov2002Nov2002

Dec2002Dec2002

Jan2003Jan

2003Feb

2003Feb

2003Mar

2003Mar

2003~Sep2003~Sep2003

CancunMC

CancunMC

ConclusionArt 20

MandatedNegotiations

ConclusionArt 20

MandatedNegotiations

COA SSExport

Compt’n

COA SSExport

Compt’n

COA SSsMkt Access,Dom Suprt

COA SSsMkt Access,Dom Suprt

Organization,Trade

NegotiationsCommittees

COA SSsFollow up,

cross issues

COA SSsFollow up,

cross issues

NG Chair’s1st Draft

NG Chair’s1st Draft

ModalitiesReview

ModalitiesReview

Consideration,1st Draft

Consideration,1st Draft

FinalEstablishment,

Modalities

FinalEstablishment,

Modalities

Crafting of Members’Schedule of Commitments

Crafting of Members’Schedule of Commitments

Deadlinemissed

Deadlinemissed

Adjusting to the realityof missing the modalities

Deadline, GC settles foran attempt to hammer

consensus on aFramework Agreement

for ministerial mandatein Cancun

Doha ‘Development’ Round:Timelines in AgricultureREVISED per Cancun MC& GC Framework Decision, Geneva

Doha ‘Development’ Round:Timelines in AgricultureREVISED per Cancun MC& GC Framework Decision, Geneva

CancunMC

CancunMC

Sep2003Sep

2003End July

2004End July

2004July

2005July

2005Dec2005Dec2005 ~2007~2007

DraftSchedule of

Commitments

DraftSchedule of

Commitments

GC Declarationon Framework

Agreement


Agreement

DraftModalities

DraftModalities

Full Modalitiesfor HKMC


DeadlineMissed

by 2 hours

Resumption ofCOA Special Session


WTOSummer Break

WTOSummer Break

End Aug2005

End Aug2005

Nov2005Nov2005

Hong KongMC

Hong KongMC

July2006July

2006

-Verification ofdraft schedules-conclusion ofDoha Round,2007 MC?-ratification byMembers


BreakdownBreakdown

Ministers mandaterenewed Frameworknegotiations


Philippine Negotiating ObjectivesAgriculture


SystemicOFFENSIVES

Continuation of the trade reform program – the developed must deliver, now

Interlinkage of commitments in the market access, domestic support, export competition pillars

SystemicOFFENSIVES

Continuation of the trade reform program – the developed must deliver, now

Interlinkage of commitments in the market access, domestic support, export competition pillars



DEFENSIVES

• More meaningful & effective Special & Differential treatment (SND) for the developing as integral in all results

• Adequate protection for strategic &

vulnerable sectors; preservation of the residual ‘policy space’

• Full consistency of results with the Doha mandate

DEFENSIVES

• More meaningful & effective Special & Differential treatment (SND) for the developing as integral in all results

• Adequate protection for strategic &

vulnerable sectors; preservation of the residual ‘policy space’

• Full consistency of results with the Doha mandate

Strategic Objective & ElementsStrategic Objective & ElementsChances of attaining negotiating objectives are close to zero if engaged

outside of the ‘Green Room’ – therefore, aim for ‘entry’ & participation in this exclusive process by:

Demonstrating indispensable ‘influence’ and constructively substantive contribution(s) to the debate, i.e., consistent, credible proposals enjoying significant/wide support

Chances of attaining negotiating objectives are close to zero if engaged outside of the ‘Green Room’ – therefore, aim for ‘entry’ & participation in this exclusive process by:

Demonstrating indispensable ‘influence’ and constructively substantive contribution(s) to the debate, i.e., consistent, credible proposals enjoying significant/wide support

Any robust substantive contribution can only stem from a truly participative process that consistently engages stakeholders, i.e., proposals & positions must first be credible & have firm political support at home; eg., TF WAR & Core

Beyond plenary substantives & rhetorics: promotion of ferment & successful alliance-building is a potent weapon for the small

Any robust substantive contribution can only stem from a truly participative process that consistently engages stakeholders, i.e., proposals & positions must first be credible & have firm political support at home; eg., TF WAR & Core

Beyond plenary substantives & rhetorics: promotion of ferment & successful alliance-building is a potent weapon for the small

The Three ‘Pillars’The Three ‘Pillars’

Market AccessMarket Access

Domestic Support

Domestic Support

Export Competition

Export Competition

QRsQRs

TRQsTRQs

SSGs, other TRMsSSGs, other TRMs

TariffsTariffs

Green BoxGreen Box

Blue BoxBlue Box

de minimisde minimis

Amber BoxAmber Box

Food AidFood Aid

Export CreditsExport Credits

Export STEsExport STEs

Direct Export SubsidiesDirect Export Subsidies

Non trade-distorting, can also be production distorting


Still trade & production distorting


TradedistortingTradedistorting

Most trade distortingMost trade distorting

harmonizationharmonization reduction towards elimination

reduction towards elimination

immediate elimination, prohibition


Market Access: Offensives

Increased access of agri exports to developed country markets through SND, proportionality and progressivity

Zero tariffs in developed countries for tropical productsFaster rate of tariff reduction and shorter time frame for the developedDeveloped countries must pay or open up more, in terms of TRQ/MAV volumes and/or in-quota rates for declarations of sensitive products to be exempt from the tariff reduction formula

Elimination of tariff escalation

Uniformity and increased transparency of tariff measures

Market Access: Offensives

Increased access of agri exports to developed country markets through SND, proportionality and progressivity

Zero tariffs in developed countries for tropical productsFaster rate of tariff reduction and shorter time frame for the developedDeveloped countries must pay or open up more, in terms of TRQ/MAV volumes and/or in-quota rates for declarations of sensitive products to be exempt from the tariff reduction formula

Elimination of tariff escalation

Uniformity and increased transparency of tariff measures

Negotiating Objectives: the PillarsNegotiating Objectives: the Pillars

Continuation of the margin of protection for sensitive products/sectors through –

Establishment of a new Special Safeguard Mechanism (SSM) to replace SSG, for developing countries only

Self-declaration of a number, to be negotiated, of Special Products (SPs) with minimal or no further commitments, for purposes of food/livelihood security and rural development

Application of proportionality in eligibility for sensitivity relative to the developed

Continuation of the margin of protection for sensitive products/sectors through –

Establishment of a new Special Safeguard Mechanism (SSM) to replace SSG, for developing countries only

Self-declaration of a number, to be negotiated, of Special Products (SPs) with minimal or no further commitments, for purposes of food/livelihood security and rural development

Application of proportionality in eligibility for sensitivity relative to the developed

Market Access: Defensives

Domestic Support

Substantial reductions in total trade distorting (amber + de minimis +blue) non - specific and product - specific support

Elimination of de minimis for the developed, retention for the developing

SND integrated in all provisions, flexibilities for the developing to employ all forms of support for food security, livelihood and rural development

Domestic Support

Substantial reductions in total trade distorting (amber + de minimis +blue) non - specific and product - specific support

Elimination of de minimis for the developed, retention for the developing

SND integrated in all provisions, flexibilities for the developing to employ all forms of support for food security, livelihood and rural development

Export Competition

Elimination of all forms of export subsidies and trade distorting export support measures

Disciplines on affected export competition measures, such as food aid, must not prejudice genuine need for food & development aid programs

SND provisions integrated, allowing flexibility for developing countries to promote exports

Export Competition

Elimination of all forms of export subsidies and trade distorting export support measures

Disciplines on affected export competition measures, such as food aid, must not prejudice genuine need for food & development aid programs

SND provisions integrated, allowing flexibility for developing countries to promote exports

Negotiating FrameworkNegotiating Framework

What outcomes do we want to achieve in this round?

The Three ‘Pillars’ The Three ‘Pillars’


Domestic Support

Domestic Support

Export Competition

Export Competition

QRsQRs

TRQsTRQs

SSGs, other TRMsSSGs, other TRMs

TariffsTariffs

Green BoxGreen Box

Blue BoxBlue Box

de minimisde minimis

Amber BoxAmber Box

Food AidFood Aid

Export CreditsExport Credits

Export STEsExport STEs

Direct Export SubsidiesDirect Export Subsidies





TradedistortingTradedistorting

Most trade distortingMost trade distorting

harmonizationharmonization reduction towards elimination

reduction towards elimination



The Three ‘Pillars’The Three ‘Pillars’Proposed Philippine ArchitectureProposed Philippine Architecture

Domestic SupportDomestic Support

Export CompetitionExport Competition


… the 3 pillars that define the overall balance of reform commitments cannot be negotiated separately.

…support measures are also effective forms of protection…

… the 3 pillars that define the overall balance of reform commitments cannot be negotiated separately.

…support measures are also effective forms of protection…

Reform commitments in the three pillars must necessarily be integrated and interlinked …

Reform commitments in the three pillars must necessarily be integrated and interlinked …

ProtectionProtection

SupportSupport

Philippine Framework, Negotiations Architecture

Philippine Framework, Negotiations Architecture

The Iceberg &The Styro Box (by Usec. S. Serrano)

The Iceberg &The Styro Box (by Usec. S. Serrano)

Tariffs alone are deceptive

Tariffs alone are deceptive

Protection

Support

Market AccessMeasures

(tariffs, etc)

DomesticSupport

&Export

CompetitionMeasures

DevelopedCountries

DevelopingCountries

The Iceberg The Styrofoam Box

Pillars

TF WAR, since 1998, is the stakeholder consultative-participatory assembly that deliberates positions for recommendation to the Secretary of Agriculture

Pillars

TF WAR, since 1998, is the stakeholder consultative-participatory assembly that deliberates positions for recommendation to the Secretary of Agriculture

The Philippine Negotiating Effort

The Philippine Negotiating Effort

TF WAR Core, since 2002, composed of volunteer technical experts from TF WAR, conducts the necessary technical & substantive work in the development of proposals & positions on issues

TF WAR Core, since 2002, composed of volunteer technical experts from TF WAR, conducts the necessary technical & substantive work in the development of proposals & positions on issues

The Philippine Negotiating EffortThe Philippine Negotiating Effort

Technical deliberations with private sectorare even more important…

TF WAR Secretariat, DA Policy Research Service-based technical support group to TF WARCoordination & dialogue with national & international civil society groupsReal time coordination with DA staff in Geneva

TF WAR Secretariat, DA Policy Research Service-based technical support group to TF WARCoordination & dialogue with national & international civil society groupsReal time coordination with DA staff in Geneva

The Philippine Negotiating EffortThe Philippine Negotiating Effort

AlliancesG20, SP & SSM Alliance (G33), Cairns Groupin Fisheries, ‘Friends of Fish’

ProposalsSpecial & Differential Treatment (with ASEAN)Inter-linkage of CommitmentsAutomatic Countervailing Mechanism (with Argentina, others)Food Security Mechanism (with Indonesia)

AlliancesG20, SP & SSM Alliance (G33), Cairns Groupin Fisheries, ‘Friends of Fish’

ProposalsSpecial & Differential Treatment (with ASEAN)Inter-linkage of CommitmentsAutomatic Countervailing Mechanism (with Argentina, others)Food Security Mechanism (with Indonesia)

Level of Engagement….a small country but exerts influence…

Level of Engagement….a small country but exerts influence…

Member of the ‘Green Room’ process since Cancun, at the technical, senior official and ministerial levelsCo-coordinator & founder of the SP & SSM Alliance, the first purely developing country bloc in the WTO, with Indonesia

Member of the ‘Green Room’ process since Cancun, at the technical, senior official and ministerial levelsCo-coordinator & founder of the SP & SSM Alliance, the first purely developing country bloc in the WTO, with Indonesia Level of EngagementLevel of Engagement

G20Argentina Bolivia Brazil China Chile Cuba EgyptGuatemala India Indonesia Mexico NigeriaPakistan Paraguay Philippines S. AfricaTanzania Thailand Venezuela Zimbabwe

G20Argentina Bolivia Brazil China Chile Cuba EgyptGuatemala India Indonesia Mexico NigeriaPakistan Paraguay Philippines S. AfricaTanzania Thailand Venezuela Zimbabwe

Philippine Membershipin Negotiating Blocs

Philippine Membershipin Negotiating Blocs

G33 (SP & SSM Alliance)Antigua & Barbuda Barbados Belize Benin BotswanaChina Congo Cote d’Ivoire Cuba Dominican RepublicGrenada Guyana Haiti Honduras India IndonesiaJamaica Kenya Madagascar Mautitius MongoliaMozambique Nicaragua Nigeria Pakistan PanamaPeru Philippines St. Kitts & Nevis St. LuciaSt. Vincent & the Grenadines Senegal S. KoreaSri Lanka Suriname Tanzania Trinidad & TobagoTurkeyUganda Venezuela Zambia Zimbabwe

G33 (SP & SSM Alliance)Antigua & Barbuda Barbados Belize Benin BotswanaChina Congo Cote d’Ivoire Cuba Dominican RepublicGrenada Guyana Haiti Honduras India IndonesiaJamaica Kenya Madagascar Mautitius MongoliaMozambique Nicaragua Nigeria Pakistan PanamaPeru Philippines St. Kitts & Nevis St. LuciaSt. Vincent & the Grenadines Senegal S. KoreaSri Lanka Suriname Tanzania Trinidad & TobagoTurkeyUganda Venezuela Zambia Zimbabwe

Cairns GroupAustralia Argentina Bolivia Brazil Canada ChileColombia Costa Rica Guatemala IndonesiaMalaysia New Zealand Paraguay PhilippinesS. Africa Thailand Uruguay

Cairns GroupAustralia Argentina Bolivia Brazil Canada ChileColombia Costa Rica Guatemala IndonesiaMalaysia New Zealand Paraguay PhilippinesS. Africa Thailand Uruguay

Capital-based senior officials & TF Core members attend the negotiating sessionsHeavy engagement with civil society groups

Capital-based senior officials & TF Core members attend the negotiating sessionsHeavy engagement with civil society groups

Level of EngagementLevel of Engagement

Modalities Phase, Part 2:The Tight Stretch to Hong KongModalities Phase, Part 2:The Tight Stretch to Hong Kong

CancunMC

CancunMC

Sep2003Sep2003

End July2004

End July2004

July2005July

2005Dec

2005Dec

2005 ~2007~2007

DraftSchedule of

Commitments

DraftSchedule of

Commitments


Agreement


Agreement

DraftModalities

DraftModalities



DeadlineMissed

by 2 hours

DeadlineMissed

by 2 hours



WTOSummer Break

WTOSummer Break

End Aug2005

End Aug2005

Nov2005Nov2005

Hong KongMC

Hong KongMC

July2006July

2006



BreakdownBreakdown



Export Competition

Per Doha & the Framework, all forms of export subsidies must be eliminated

Export subsidies are the most trade distorting of trade measures, enabling uncompetitive firms to undercut unsubsidized competition

EU direct export subsidies ~US$5.8 billion in 2003, on grains, dairy, meat, wines, rice, sugar, among others

Export Competition

Per Doha & the Framework, all forms of export subsidies must be eliminated

Export subsidies are the most trade distorting of trade measures, enabling uncompetitive firms to undercut unsubsidized competition

EU direct export subsidies ~US$5.8 billion in 2003, on grains, dairy, meat, wines, rice, sugar, among others

General State of PlayGeneral State of Play

The most advance area, as earlier political decisions have been made…

Export Competition

US export subsidies were estimated at UD$147 million, Switzerland at UD$292 million, Norway at US$77 millionThe EU concedes that it is willing to eliminate them provided -

Other parties (i.e., US) similarly agree to eliminate subsidy elements in other export competition measures, e.g., export credits/guarantees/insurance beyond 180 days, food aid, exporting STEs (full parallelism)

EU has so far not specified any credible date of elimination as the negotiations are stalled on how to operationalize full parallelism

Export Competition

US export subsidies were estimated at UD$147 million, Switzerland at UD$292 million, Norway at US$77 millionThe EU concedes that it is willing to eliminate them provided -

Other parties (i.e., US) similarly agree to eliminate subsidy elements in other export competition measures, e.g., export credits/guarantees/insurance beyond 180 days, food aid, exporting STEs (full parallelism)

EU has so far not specified any credible date of elimination as the negotiations are stalled on how to operationalize full parallelism

Domestic Support

Unlike export subsidies, Doha mandates only ‘substantial’ reductions in trade distorting domestic supportthe 01 Aug Framework specifies a 20% 1st year downpayment together with a tiered harmonizing reduction formula to be developed

Applied levels of trade distorting domestic support –

EC15 – US$67.18 billion (US$19.7 billion green)US – US$24.3 billion (US$49.8 billion green)Japan – US$7.83 billion (US$24.1 billion green)

Domestic Support

Unlike export subsidies, Doha mandates only ‘substantial’ reductions in trade distorting domestic supportthe 01 Aug Framework specifies a 20% 1st year downpayment together with a tiered harmonizing reduction formula to be developed

Applied levels of trade distorting domestic support –

EC15 – US$67.18 billion (US$19.7 billion green)US – US$24.3 billion (US$49.8 billion green)Japan – US$7.83 billion (US$24.1 billion green)

Domestic SupportNegotiations are still on the base levels and applicable period from which to start reductions

G20 argues that reductions start with credible numbers first in order to attain real cuts per mandate

Tiered formula, yet to be agreed, must cut proportionately more from higher levels of support

• Domestic Support awaits US to accept substantial cuts on trade distorting domestic support and effective disciplines on the blue Box

Domestic SupportNegotiations are still on the base levels and applicable period from which to start reductions

G20 argues that reductions start with credible numbers first in order to attain real cuts per mandate

Tiered formula, yet to be agreed, must cut proportionately more from higher levels of support

• Domestic Support awaits US to accept substantial cuts on trade distorting domestic support and effective disciplines on the blue Box

Domestic Support

Failing in the Framework negotiations to have developed country de minimis eliminated, G20 now calls for folding this in the tiered reduction formula

Any reductions in developing country de minimis (developing country blocs failed to exempt this) must be justified, given the fact that developing countries allocate their de minimis to subsistence & resource poor farmers

Domestic Support

Failing in the Framework negotiations to have developed country de minimis eliminated, G20 now calls for folding this in the tiered reduction formula

Any reductions in developing country de minimis (developing country blocs failed to exempt this) must be justified, given the fact that developing countries allocate their de minimis to subsistence & resource poor farmers

Market Access

Major elements-

Tiered tariff reduction formula, progressivitySensitive productsTRQ/MAV administrationTariff escalationTariff simplificationSSGSND: SPs, SSM, trade preferences

Market Access

Major elements-

Tiered tariff reduction formula, progressivitySensitive productsTRQ/MAV administrationTariff escalationTariff simplificationSSGSND: SPs, SSM, trade preferences

Market Access: tariff reduction formula

Progressivity – higher cuts for higher tariffs

Tiered or banded approach – tariffs will be grouped into tiers based on a common ad valorem equivalency

Note: RP tariffs of even the sensitive products are no more than 40% c. 2004


Progressivity – higher cuts for higher tariffs

Tiered or banded approach – tariffs will be grouped into tiers based on a common ad valorem equivalency

Note: RP tariffs of even the sensitive products are no more than 40% c. 2004


Technical discussions bogged down on the ad valorem equivalent (AVE) methodology to be applied to members using specific, complex & technical tariffs (EU, Japan, Switzerland, among others), delaying negotiations on the tiered tariff reduction formula

An AVE methodology that systematically underestimates the level of protection of the non-ad valorem tariffs prejudices those already using the more transparent ad valorem tariffs

AVEs must be transparent & verifiable


Technical discussions bogged down on the ad valorem equivalent (AVE) methodology to be applied to members using specific, complex & technical tariffs (EU, Japan, Switzerland, among others), delaying negotiations on the tiered tariff reduction formula

An AVE methodology that systematically underestimates the level of protection of the non-ad valorem tariffs prejudices those already using the more transparent ad valorem tariffs

AVEs must be transparent & verifiable


The negotiations on the specifics of the tiered tariff reduction has not been completed as of July 2005

The issue of tariff simplification towards an ad valorem only regime also still remains to be negotiated

Major disagreements on the issue of tariff caps, G10 strongly opposes and other developing countries


The negotiations on the specifics of the tiered tariff reduction has not been completed as of July 2005

The issue of tariff simplification towards an ad valorem only regime also still remains to be negotiated

Major disagreements on the issue of tariff caps, G10 strongly opposes and other developing countries

G20 proposal on the tariff reduction formulaG20 proposal on the tariff reduction formula

Developed Developing

Bands/Tiers 5 4

Thresholds

(in AVEs) Linear Cut (in AVEs) Linear Cut

0≤20 v% 0≤30 <v

>20≤40 w% >30≤80 <w

>40≤60 x% >80≤130 <x

>60≤80 y% >130 <y

>80 z% - -

Where v<w<x<y<z

Tariff cap 100 150

Market Access: other elements

Scoping & technical discussions have started on TRQ/MAV administration, SP & SSM

TRQ administration – improving disciplines in administrative transparency on allocations, fill rates; issues related to TRQ expansion

SSM – SP & SSM Alliance (G33) proposes universal access for developing countries, simplified & responsive mechanism

Market Access: other elements

Scoping & technical discussions have started on TRQ/MAV administration, SP & SSM

TRQ administration – improving disciplines in administrative transparency on allocations, fill rates; issues related to TRQ expansion

SSM – SP & SSM Alliance (G33) proposes universal access for developing countries, simplified & responsive mechanism

Special Products…EU &US attempt to waterdown… Special Products…EU &US attempt to waterdown…

US, EU, exporters try to limit coverage to products of subsistence farmers Doha criteria and ‘operational guidelines/indicators vs ‘specific and objective criteria’ attempts to link with liberalization, ‘compensation’ for availment the only linkage: proportionality with tariff reduction formula, sensitives

US, EU, exporters try to limit coverage to products of subsistence farmers Doha criteria and ‘operational guidelines/indicators vs ‘specific and objective criteria’ attempts to link with liberalization, ‘compensation’ for availment the only linkage: proportionality with tariff reduction formula, sensitives

Special Safeguard Mechanism Special Safeguard Mechanism

clarification backloaded to post-July Chile: link to tariff reduction commitments, definition of thresholds exporters’ ‘sum of all fears’

clarification backloaded to post-July Chile: link to tariff reduction commitments, definition of thresholds exporters’ ‘sum of all fears’

Food Aid Food Aid

US & surrogates vs EU the ‘food aid’ dilemma US PL480, we benefit at whose expense?

can disciplines in the other elements of export competition, ie, on export credits & guarantees, discipline or eliminate the export subsidy components of ‘food aid’ programs?

US & surrogates vs EU the ‘food aid’ dilemma US PL480, we benefit at whose expense?

can disciplines in the other elements of export competition, ie, on export credits & guarantees, discipline or eliminate the export subsidy components of ‘food aid’ programs?

Assessment and prospect in HK MC… Assessment and prospect in HK MC…

• Despite intense negotiations, did not reach agreement on the ‘July approximation” that is intended to contribute to achieving “full/detailed modalities” by the Hong Kong MC

• COA Chair, Tim Groser assessed the negotiations as stalled & pinpointed elements that require political decisions that can contribute to successful MC in HK

• EU and US might collude again if things don’t move smoothly in HK (like what they did in pre Cancun by issuing a joint text scrapping the Harbinson text), even more worrisome if Japan joins this force

another update by TF WAR & SecretariatPolicy & Planning, Project Development, R & DOffice of the SecretaryDepartment of AgricultureRepublic of the Philippines

another update by TF WAR & SecretariatPolicy & Planning, Project Development, R & DOffice of the SecretaryDepartment of AgricultureRepublic of the Philippines

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The Philippine Trade Negotiations Effort in Agriculture

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