The Doha Development The Doha Development Agenda:Agenda: Issues of Process Issues of Process and Substanceand Substance
Parr RossonTexas Cooperative ExtensionTexas A&M University System
American Agricultural Economics Association, Annual Meetings
ProcessSubstance-Not Much Progress
740+ Brackets in Text
Three Pillars of Policy ReformTrade Distorting Domestic Support
Market Access
Export Competition
Doha Development Agenda
Process: Doha Timeline
Initiated Negotiations in Agriculture, March 2000 (WTO Ag Committee)Doha ‘Round’ Began November 2001, Doha, QatarCancun, 2003-FailureGeneva, 2004-Work Program, Modest Success
Year 1, 20% Cut in Trade Distorting Domestic Support & Export Competition
Hong Kong, 2005-Faliure
Process (continued)April 2006, Modalities-Failure
June 2006, Modalities-Failure
July 2006-DG Lamy’s Shuttle Diplomacy, Results Pending, But ‘Crisis’ Acknowledged & G-8 Briefed
July 31, 2006-Modalities & Schedules: DG Lamy Suspends DDA, July 24, 2006
December 31, 2006-Negotiations Were to Conclude
July 1, 2007 Trade Promotion Authority Expires
Agricultural Trade Weighted Tariffs
Source: Jean, Laborde and Martin (2005a)
AverageBound tariff
%
MFN applied
Tariff%
Actual applied
Tariff%
Developed Countries 27 22 14
Developing Countries 48 27 21
Less Developed 78 14 13
WORLD 37 24 17
‘Binding Overhang’ is Problematic
Any Negotiated Reductions Start at Bound Rates
Impact of Proposals on Ag Tariffs
70%
30%
‘Negotiating Gap’ of 40%
Tariff Levels-Percent Percent Reduction
0 to < 20-30 20-65
20-30 to 40-60 30-75
40-60 to 60-90 35-85
> 60-90 42-90
Tariff Cuts, Developed Countries
Summary, EU, US & G-20 Proposals by WTO Chair, Ag Committee, June 22, 2006.
Tariff Levels-Percent (Max Bound Duty 150%)
Percent Reduction
0 to < 20-50 15 - < 65
20-50 to 40-100 20 - < 75
40-100 to 60-150 25 - < 85
> 60-150 30 - < 90
Reductions summarized by WTO Chair, Ag Committee, June 22, 2006.
Tariff Cuts, Developing Countries
Sensitive Product Designation-All Countries
1% vs. 15% of Tariff Lines, with 10,000+ Lines, 100 vs. 1,500 Protected Products20% Designated Sensitive, 90% of G-20 Ag Trade Protected, So No Real Increase in Market Access
Special Products-Developing & Less Developed Countries
Longer Time Period/Less ReductionSpecial Safeguards-AllIssue: Way Too Much Protection to Provide Significant Market Access
Other Market Access Issues
Food AidCash vs. In-Kind
Export Credits< 180 Most Cases
State Trading EnterprisesEliminate Monopoly Power
Differential Export Taxes-Little ProgressExport Subsidies
Eliminate by 2013Eliminate by 2013
Export Competition
Where Are We in Doha??
Negotiations Suspended Indefinitely
U.S. Under Pressure from EU & G-20 to Offer More in TDDS Cuts
U.S. Pressuring EU, Japan & G-20 to Cut Tariffs More
EU Resistant, Especially France
TPA Expiration LoomsVery Difficult Time in U.S. Congress
Might TPA Be Extended to Support Bilateral/Regional and MTN??
Implications of Doha Failure
Five Years Down the Drain
Continued Restrictions on ‘South-South’ Trade, Stifling Development
Protectionism & All that Accompanies It
Credibility & Future of WTO, Especially Related to Agriculture
More Litigation/Dispute Settlement?
SummarySuspension is a Setback, May Be Overcome
Market AccessSensitive Product Designation Possible Loophole
Deep Tariff Cuts for Developing Countries Difficult to Reconcile
Export CompetitionElimination of Subsidies is Significant
U.S. vs. EU/G-20 Very Far Apart on Reductions in Tariffs & TDDS
Who Really Loses from Failure?
G-20 Member Countries
Argentina, Bolivia, Brazil, Chile, China,
Cuba, Egypt, Guatemala, India, Indonesia,
Mexico, Nigeria, Pakistan, Paraguay, Philippines,
S. Africa, Tanzania, Thailand, Uruguay, Venezuela,
Zimbabwe
General Tariff Reduction Formulas
Proposed Developed Country Tariff Cuts, Bound Rates
Issue U.S. EU G-20 Formula Progressive Linear Linear
4 Tiers Cuts 4 Tiers Cuts 4 Tiers Cuts 0 - 20 55% - 65% 0 - 30 35% 0 - 20 45%
Tariff Reduction
20 - 40 65% - 75% 30 - 60 45% 20 - 50 55% 40 - 60 75% - 85% 60 - 90 50% 50 - 75 65%
60+ 85% - 90% 90+ 60% 75+ 75% Cap: 75 Cap: 100 Cap: 100
Avg. cut of 54%
General Tariff Reduction Formulas Proposed Developing Country Tariff Cuts, Bound Rates
Issue U.S. EU G-20 Formula Progressive Linear Linear
4 Tiers Cuts 4 Tiers Cuts 4 Tiers Cuts 0 - 20 <55% - 65% 0 - 30 25% 0 - 30 25%
Tariff Reduction
Flex 10% - 40%
20 - 40 <65% - 75% 30 - 80 30% 30 - 80 30% 40 - 60 <75% - 85% 80 - 130 35% 80 - 130 35%
60+ <85% - 90% 130+ 40% 130+ 40% Cap: Yes Cap: 150 Cap: 150
Max. Avg. cut of 36%; <2/3rd proportionality