Food Security: A First Step Toward More Fair Trade A Discussion Paper on Food Security and Agricultural Trade under the World Trade Organization Wendy Phillips Advocacy and Government Relations World Vision Canada August 2000 The following is a discussion paper on the role of the Agreement on Agriculture in addressing the food security concerns in developing countries. Comments and feedback would be welcomed at (905) 821-3033 EXT. 3838 or [email protected] TABLE OF CONTENTS Executive Summary Introduction Food Security and trade Food Security and Trade Liberalization Food Security, Trade Liberalization, and the Agreement on Agriculture Food Security, the Agreement on Agriculture, and Canadian foreign policy The WTO Agreement on Agriculture: History Political Dynamics surrounding the Inclusion of Agriculture Three Pillars: Market Access, Domestic Support and Export Subsidies Market Access Implications of the Market Access and Tariffication Process Domestic Support Implications of the Domestic Support Provisions Export Subsidies Implications of the Export Subsidies Restrictions for Developing Countries Limitations of the Special and Differential Treatment for Developing Countries Policy Recommendations Specific Policy Options Summary Appendix 1: The WTO Fundamental Principles Structural Elements Appendix 2 The Green Box Acronyms Endnotes Bibliography EXECUTIVE SUMMARY Trade in agriculture is a vital part of international development. Ensuring that developing countries can have food security and benefit from international trade should be a priority for developed and developing countries alike. The right to food is a fundamental human right. Global commitments to make food security a reality for all people recognize that fair rules for international trade within a multilateral trade system are essential to achieve this goal. World Vision’s commitment to work for food security is rooted in the conviction that the world was created by God with plentiful resources. In service to God and all people we are called to seek ways to ensure that no one needs to go without sufficient food. In developing countries, on average almost 60% of people are involved in food production. Trading food at fair prices is essential for their short and long term development. The World Trade Organization’s Agreement on Agriculture does not address the food security concerns of developing countries. It serves the interests of developed countries at the expense of developing countries: 1. 2. 3. 4. 5. It fails to provide access to markets in wealthy countries. It demands lower tariffs and open markets in developing countries. It fails to significantly reduce the subsidy levels in developed countries. It enforces low subsidy levels in developing countries. It over simplifies the special needs of developing countries. There is a need to advocate for greater fairness and consistency in our international commitments. The food security needs of developing countries must be upheld by the WTO. Specific policy recommendations advanced in this discussion paper include: • • • • • Structural reform of the WTO should be undertaken to ensure meaningful participation of the developing countries in the negotiating and implementation of the agreement Food security should be a primary focus of the Poverty Reduction Strategy Papers of the World Bank. The terms of the AoA should be required to comply with these international commitments to food security and those upheld by the UN. Canada could show leadership on advancing the principle of market access for developing countries by ensuring that the implementation of its commitments does not disadvantage developing countries. The principle of food security could be enshrined into the preamble of the AoA Specific Food Security concerns should be addressed within the AoA either through the provisions for special and differential treatment or a specific food security box. These could include: Unilateral Provisions for Developing Countries Concessions from Developed Countries Capacity Building Initiatives for Developing Countries 1. Flexibility in import tariffs 1. Substantial reductions in import tariffs 1. Adequate technical assistance to make use of food security provisions. 2. Special Safeguards 2. Elimination of export subsidies 3. A domestic support box which allows for food security programs applicable to the needs of 3. Elimination of tariff escalation practices 2. Adequate financial assistance to address efficiency and diversification issues. developing countries 4. Elimination of tariff peaks 4. Exemptions from minimum access requirements especially for basic food items 5. Elimination of Special Safeguard actions to block imports into developed countries from developing countries especially least developed countries. 6. Prohibitions on dumping 3. Implementation of the Marrakesh Decision to protect the interests of LDCs and NFIDCs 4. Provisions for a multilateral compensatory food import facility to enable NFIDC to cope with foreign exchange shortages 7. Clarification of the Green Box exemptions to ensure the food security of small farmers 8. Substantial reductions in AMS levels of support The goal of engagement with the WTO is not one of endorsement, but rather one of challenge. The goal is to ensure that the legitimate needs of those with less power are not ignored and to advocate for fairness now. INTRODUCTION In a world of plenty there should not be hunger. In reality, the number of undernourished people remains unacceptably high: 791.5 million people in the developing world are without sufficient food (1). In a world that boasts of economic integration, trade policies should support the goal of food security. In reality, food security is scarcely mentioned in the World Trade Organization’s (WTO) Agreement on Agriculture (AoA). Trade has effects on food security, both positive and negative; understanding the link is vital to ensuring food security. The link between trade and food security becomes clear through an examination of the basic principles, specific policies, and implications of international agreements for people who can not take food security for granted. In Sri Lanka, for example, surges in imports resulting from the implementation of the AoA have contributed to a clear drop in employment for farmers, who are a large portion of the population. (2) As a result, these farmers become dependent on imported food, for which they need employment that produces a living wage. International trade agreements must be responsive to these domestic dynamics to ensure that people do not go hungry. Basic principles and specific policies are both important in the debate about food security and trade liberalization. First, the points of intersection between food security and the Agreement will be clarified. Second, the relationship between international commitments to food security and commitments to trade liberalization must be assessed in order to have coherence in Canada's foreign policy. Third, ways to broaden the definition of food security and its application within trade agreements will be explored. Fourth, the specific terms of the three pillars of the Agreement on Agriculture will be considered to examine their implications for food security. Finally, the pros and cons of specific policy options will be considered. FOOD SECURITY AND TRADE Food security exists when "all people at all times have access to safe nutritious food to maintain a healthy and active life" (3) This is the definition used by the United Nations Food and Agriculture Organization (FAO). The three dimensions of food security are availability, access and utilization; each of these components needs to be considered at the level of individuals, households, nations and international relations. The right to food has been recognized as a fundamental human right, (4) but the implications of such recognition have not been fully developed. Turning the right to food into a reality of food security for all people will require that all sectors of society in both developed and developing countries translate it into specific policy changes. It is an achievable goal. World Vision is a Christian humanitarian organization dedicated to improving the lives of poor children and their families through international relief, development and advocacy. In fifty years of service to millions of poor people in 87 countries around the world, World Vision has seen first hand the significant impact of food security, agricultural development and trade on community life. For World Vision, recognition of the right to food and a commitment to work for food security is rooted in our convictions that the world was created by God with plentiful resources and that every human being has value and dignity in the eyes of the Creator. Human responsibility to exercise stewardship of the earth's resources in service to God and all people calls us to seek ways to ensure that no one needs to go without enough food. Commodity prices have a significant impact on food security when almost 60% of the population is involved in food production. (5) This is the situation in many developing countries. Trade affects the availability of food through imports and exports. Trade also affects household access to adequate food through its impact on commodity prices and access to markets for producers. The price a producer receives has a significant impact her ability to purchase other foodstuffs and reinvest in her livelihood. At the national level, trade affects both access and utilization of food through its impact on national revenues available for agricultural assistance, social support programs, and food distribution. (6 Food Security and Trade Liberalization Within the World Trade Organization, food security is narrowly conceived as "the adequate supply of imported food to member states.". (7) Unfortunately, this approach overlooks many other ways in which trade agreements affect food security, such as the impact on household incomes, local market prices, and national revenue. This definition also raises questions about the basic assumptions of trade liberalization. First, trade liberalization assumes that industrialization is the measure of success for development. The goal of liberalization is to transform the agricultural market through the use of technology, streamlined production, and increased reliance on exports and imports to maximize market efficiencies. This paper will illustrate that the current approach to liberalization marginalises small farmers and advances the interests of multinational agribusiness, without adequate consideration to food security. (8) For people in developing countries, forced liberalization is not simply a matter of finding their comparative advantage in the world of trade. It fundamentally changes societal structures that have been shaped around agriculture and food production. When a majority of the population is involved in food production, as it is in developing countries, this creates major social upheavals, at the same time as companion policies, such as Structural Adjustment Policies (SAPs), reduce the ability of developing country governments to deal with social issues. Given the scale of the impact, it is critical that developing countries have a voice in how these changes take place. Second, the current approach to trade liberalization assumes that the unfettered flow of foodstuffs and other goods will automatically improve food security.(9) This assumption does not take into consideration the full scope of food security and the implications of liberalization. Having enough food in a country does not guarantee that people can afford to buy it or that it can be distributed to all. Nor does it guarantee that farmers will receive a fair price for their produce so they can contribute to long-term economic development within a developing country. Third, liberalization assumes that the supply and flow of goods in the market will be relatively stable. This is seldom the case. Problems of war, drought, flooding and other causes of market instability can disrupt the flow of food. Developing countries can not therefore, rely solely on the market to ensure food availability. (10) Advocates of trade liberalization for agricultural products argue that their approach will force farmers to produce only what is efficient and force governments to stop inefficient subsidies. These arguments ignore the history of agriculture, which shows that developing an industrialized agricultural sector requires a significant investment in infrastructure by governments and capital resources by individual farmers. When liberalization reduces the revenue available to governments, they can no longer give farmers this much-needed support. Opponents of the WTO argue that it cannot be reformed because it is inherently destructive of developing countries and biased in favour of corporate interests within the developed world. Examples of an unrealistic faith in liberalization and a disregard for impacts on food security are obvious, as pointed out in this paper. Experience in other areas, such as the environment and labour standards, do not inspire hope that the legitimate concerns of developing countries for food security will be treated more seriously. Given the economic power behind those who support the WTO, however, it is likely to shape international trade dynamics for the foreseeable future and will have significant impacts on developing countries. Market conditions today do not realistically permit the majority of developing countries to repeat the protectionist patterns followed by developed countries in the past, which also had negative as well as positive impacts. Whatever one's views of the WTO per se, therefore, it is necessary to address the implications of its current policies and challenge its inadequacies, inconsistencies and lack of fair treatment for developing countries. The goal of engagement with the WTO is not one of endorsement, but rather one of challenge. The goal is to ensure that the legitimate needs of those with less power are not ignored, by advocating for greater fairness now. Food Security, Trade Liberalization and the Agreement on Agriculture The Agreement on Agriculture, one of the WTO's major frameworks for international trade in foodstuffs, is promoted on the basis of faith in trade liberalization as the best way to achieve economic progress around the world. (11) In reality, however, the Agreement on Agriculture is managed trade, managed to provide economic and political benefits for the developed countries who negotiated the deal and control the WTO. Detailed analysis of the provisions of the Agreement is necessary to illustrate which benefits and who pays the costs. This is essential to understand its impacts on food security. The analysis shows that, in its current form, the AoA is neither free trade nor fair trade. Food Security, the Agreement on Agriculture, and Canadian Foreign Policy Canada and other developed countries are sending mixed signals to our neighbours in developing countries. On the one hand, we claim we want to assist them to achieve food security through development assistance, and, on the other hand, our current trade policies threaten to undermine the progress made toward this goal. In monetary terms, the impact of trade agreements far outweighs the amount of money allocated to development assistance. Non-governmental organizations, such as World Vision and other development organizations, who invest in local community development, find their work undermined by the impact of policies made by decision-makers at the WTO without any input from the people who will be affected. Fairness in Canadian foreign policy requires greater consistency in our relations with the people in other countries. Canada prides itself on being a defender of international human rights including the right to food. Canada, along with many other countries, however, has made commitments to both food security and trade liberalization without fully examining the relationship between them and without taking steps to reconcile or achieve a balance between the two goals. In addition, it has negotiated and used provisions in the Agreement on Agriculture to protect domestic interests without consideration for the impacts on developing countries, while demanding greater access to developing country markets. In 1996, the World Food Summit identified the need to ensure that trade would enhance food security. (12) Canada recognized the same need in its Action Plan for Food Security, but little has been done to follow-up on this commitment. Within the WTO, liberalization is the driving ethos, with minimal attention given to its impacts on food security. To make matters worse, trade agreements have the force of law and can be challenged through the binding dispute board of the WTO (13), while commitments to food security have no legal standing. To be consistent, the trade liberalization regime must explicitly recognize the fundamental right to food and international commitments to food security and ensure that its provisions are compatible with those principles. The WTO’s acknowledgment of food security is not carried over into the most important sections of the Agreement that do impact food security. In a presentation at the FAO, for example, the WTO recognized that enhancing food security depends on strengthening the ability of the individual and the state to purchase, produce, and distribute food and the need to ensure growth, stability, and secure access to food.(14) Within the Agreement itself, Article 20 mentions the need to examine the impact of the AoA on food security(15), but it does not even identify the areas where trade provisions will impact food security. The Agreement does contain clauses for special and differential (S&D) treatment for developing countries. Unfortunately, these clauses crudely assume that requiring less liberalization over a longer period of time will be sufficient to address their development needs. The merits of S&D treatment should be assessed according to their ability to benefit food security. Given the fact that modified liberalization and not food security was the intended purpose of these clauses, it is also necessary that food security be dealt with more broadly within the framework of the WTO. A detailed examination of the specific provisions of the Agreement on Agriculture leads to several options for integrating food security into all aspects of the Agreement. THE WTO AGREEMENT ON AGRICULTURE: HISTORY Political Dynamics Surrounding the Inclusion of Agriculture For a long time agriculture was all but left out of international trade negotiations. The inclusion of agriculture in the Uruguay round was revolutionary. According to the Punta del Este declaration, the motivation for the inclusion of agriculture was: … the need to bring more discipline and predictability into the world of agricultural trade by correcting and preventing restrictions and distortions including those related to structural surpluses so as to reduce the uncertainty, imbalances and instability in world agricultural markets.(16) The major players during the negotiation process were the Cairns group, the EU, Japan, the United States and other developing countries. The following chart broadly outlines the positions presented by each country or group: Initial Negotiating Position Country Position Cairns Group(17) • Widespread liberalization including the elimination of export subsidies, reductions in import restrictions and subsidies US • Liberalization • Maintenance of their domestic subsidization program EU • Gradual managed liberalization • Maintenance of their domestic subsidization program, the Common Agricultural Policy (CAP) • To address the supply-demand imbalance Other Developing Countries (including Net Food Importing Developing Countries) • Emphasized the link between agriculture and development • To protect their agricultural markets in order to ensure development • To gain better market access to the markets of developed countries Japan • Maintenance of protectionist policies The table begins to illustrate why the Agreement on Agriculture advances the economic interests of developed countries and some net food exporting developing countries, at the expense of the bulk of developing countries. The Agreement is replete with exemptions that protect the economic interests of developed countries. Domestic Subsidy Provisions give the most glaring examples. At a stalemate in the negotiating process, the Blair House Accord of November 1992 was struck to end the deadlock between the US and the EU. The resulting "Blue Box" accommodated the US 1990 Farm bill and the revised Common Agricultural Policy of the EU. The "Green Box" was a list of exemptions negotiated primarily by the developed countries to include many of the important methods of subsidization used by these countries. Support programs that are financially accessible to developing countries are glaringly absent. The "Amber Box" – the forms of support that were actually liberalized, by process of elimination, were measures that countries agreed could be liberalized. Developed countries were not required to make very aggressive reductions in their import or export tariffs. Furthermore, the Agreement contains many complex processes such as tariffication and the calculation of the domestic support levels. Countries exploited the ambiguities in these processes to further their own policy agendas rather than liberalization. Special and differential treatment clauses were introduced to recognize the economic challenges faced by developing countries. Unfortunately, even these were designed to protect the interests of developed countries; they do not reflect the range of needs within developing countries. In short, the economic interests of developed countries rather than the food security needs of developing countries determined the terms of the AoA. Although the stated goal for the inclusion of agriculture was liberalization, the result can be more aptly described as selective and managed liberalization. It is no surprise therefore, that the developing countries have benefited little, if at all, from an agreement that ignored their concerns. THREE PILLARS: MARKET ACCESS, DOMESTIC SUPPORT AND EXPORT SUBSIDIES The Agreement on Agriculture is built on three pillars: Market Access, Domestic Support and Export Competition. Each pillar has implications for food security on both the domestic and international level. The following section will outline the terms of the AoA and the implications for food security. Market Access Market Access refers to the conditions for importing goods into a country. Tariffs on imports of agriculture products, which can sometimes range between 100% and 300%, are substantially higher than tariffs on industrial products, which average between 5% and 15%.(18) High tariffs on agricultural goods reflect the fact that developed and developing countries alike have traditionally protected their agriculture markets. The AoA set out to increase market access by reducing tariffs, as illustrated in the following chart. Terms for Market Access Developed Countries Developing Countries* • Bound all tariffs (can not be increased) • 36% decrease in import tariffs (global) • Minimum 15% tariff reduction for each tariff line • Commitments implemented over 6 years • Bound all tariffs (can not be increased) • 24% decrease in import tariffs (global) • Minimum 10% tariff reduction for each tariff line • Commitments implemented over 10 years • Tariffication of all Non Tariff Barriers (conversion into simple tariffs) • Tariffication of all Non Tariff Barriers (conversion into simple tariffs) • 36% decrease in import tariffs (global) • Minimum 15% tariff reduction for each tariff line • Implemented over 6 years • 24% decrease in import tariffs (global) • Minimum 10% tariff reduction for each tariff line • Implemented over 10 years • Tariff Rate Quotas (TRQ) providing minimum access requirements at 3% growing to 5% over 6 years • Tariff Rate Quotas (TRQ) providing minimum access requirements at 3% growing to 5% over 10 years *Least developed countries (LDC) are exempted from all these requirements under Article 15 of the Aoa (19). IMPLICATIONS OF THE MARKET ACCESS AND TARIFFICATION PROCESS Impact of Tariff Reduction within Developing Countries Lower tariffs result in lower food prices for consumers through increased imports. Liberalization assumes this will automatically lead to greater food security. This assumption exposes the developed country bias inherent in the Agreement. First, it assumes that the bulk of the population are consumers, not producers. In reality, in many developing countries, a large percentage of the population are food producers whose livelihoods are threatened by increasing imports. When farmers can no longer contribute to the national economy, then food security and the entire economy suffer. Second, liberalization assumes that increased imports will promote competition and efficiency, which increase food availability. In reality, sufficient income from existing crops is necessary for farmers to introduce more efficient production methods. If the volume of imports is so great that it overpowers domestic farmers, poverty, not efficiency, is the result. In Senegal, for example, where approximately 75% of the population depends on agriculture for their livelihood, increased imports have had negative effects on the agricultural economy in areas such as dairy products, rice, onions and sugar.(20) Competition alone is inadequate. Fair prices and appropriate technology transfer are also essential for the short and long term food security of developing countries. In short, domestic producers must be given sufficient latitude to develop a strong economic base without isolating themselves from the international market.(21) Special Safeguard (SSG) measures, exemptions from minimum access obligations especially for basic food items, and flexible import tariffs are mechanisms that could help to control import surges during harvest periods or in other circumstances that threaten short and medium-term food security. Developing countries must, however, have appropriate mechanisms and technical expertise to make use of them. As well, these provisions should become the sole prerogative of food insecure developing countries. Special Safeguard actions that enable developed countries to block imports from developing countries should be eliminated. Impact of Tariff Reductions in the International Arena Tariff reductions under the Agreement on Agriculture have not been sufficient to provide producers from developing countries significant improvements in access to markets in developed countries. A 36% reduction, for example, on a tariff of 300% still leaves a high tariff that acts as a barrier to imported goods. The inability to sell internationally, while being forced to open up their own markets, results in poverty and food insecurity among producers and the countries in which they live. Universal market access has a negative effect on some developing countries that enjoyed preferential access to markets in developed countries. The value of beef from Botswana, for example, has been affected by the reduction of EU tariffs. (23) Conveniently overlooking this problem means that developing countries pay an unfair price for liberalization. Converting Non-Tariff Barriers (NTBs) into tariffs is another mechanism of the AoA designed to improve the transparency in the level of protection for international commodities. This provision, which affects a third of all agricultural lines, by itself, has not resulted in substantial tariff reductions or improved market access. The Tariff Rate Quota system is intended to improve market access through "minimum access opportunities." The application of the TRQ has done little to open the markets of developed countries. OECD countries took advantage of ambiguities in the tariffication process to set their tariffs at deliberately high rates -- so called "dirty tariffication". This is true for goods that are of particular interest to developing countries such as sugar. For example, sugar is tariffied at 197% in the US, 126% in Japan and 297% in the EU. (24) Although developing countries are also criticized for setting high levels of high bound "ceiling tariffs", the level of protection in OECD countries continues to be higher than in developing countries and in fact, the level of protection is increasing. (25) The developed countries are not, therefore, in a position to criticize the developing countries. Furthermore, bound ceiling tariffs could be a legitimate means for developing countries to maintain tariff flexibility for the purpose of food security.(26) Developed countries have also granted market access on a preferential rather than an equal basis. Preferential tariffs and dirty tariffication impede rather than facilitate market access for developing countries. Deliberate actions by countries to take advantage of ambiguities in the regulations for self interested and protectionist purposes clearly indicate that their commitment is not to liberalization or food security, but to their own narrow economic interests. Canada is part of the problem. Although Canada claims to have liberalized its markets, the application of the TRQ regulations illustrates that Canada is not committed to universal liberalization of its markets. The Canadian Dairy Commission, for example, has been given a sole control over the butter TRQ and the power to specify that butter imports must be used in manufacturing processes. This complicated process severely restricts competition. Evidence shows that implementation of tarrification in Canada has not resulted in significant changes to the status quo.(27) It is inconsistent for Canada to demand greater market access from developing countries while at the same time protecting its own markets. If Canada is not willing to give greater access to its markets then it should at least allow less developed countries appropriate flexibility to manage their own market access conditions. Domestic Support Domestic Support refers to the measures used to subsidize the cost of agriculture production. The Aggregate Measure of Support (AMS), which calculates all support mechanisms, is substantial in most developed countries. Many developing countries are not able to provide these types of incentives to their farmers because of lack of resources or infrastructure. Reduction of domestic support through the AoA was a significant political victory for developing countries. Their ability to compete against developed countries is undermined by the significant levels of support provided by industrialized countries to their farmers. In reality, however, the long list of exemptions contained in the both the Green Box and Blue Box have not leveled the playing field or resulted in genuine liberalization. The chart below outlines the commitments to domestic support reductions and the tools for exemptions. Domestic Support Commitments Developed Countries Developing Countries* • 20% reduction in AMS over 6 years • 13.3% reduction in AMS over 10 years • 5 % de-minimus levels of supports for programs deemed to have no or little distorting effect on trade could be maintained. • 10% de-minimus levels of supports for programs deemed to have no or little distorting effect on trade could be maintained. • Annex 2 of the AoA created the Green Box: a list of programs that were exempted under the domestic support reduction requirements. These programs must have no or at most, minimal trade-distorting effects on production.(27) • The Blue Box: maintained production-limiting support programs, such as the European CAP, that allow for high levels of support for agricultural products.(28) • Measures that encourage rural development in developing countries, including diversification away from illegal narcotics, generally available investment subsidies, and subsidies to low income farmers, were also exempted from the AMS calculations. • All other forms of support not covered by Annex 2, or the Blue Box fell into the Amber Box and were subject to the reductions outlined above * LDCs are excluded from these commitments under Article 15 of the AoA (29) IMPLICATIONS OF THE DOMESTIC SUPPORT PROVISIONS Many developing countries claimed zero levels in the base year of domestic support because they simply did not have the resources to subsidize their agricultural industry. Under the terms of the AoA, they are not able to introduce new forms of amber support beyond the de-minimus level. The restriction against introducing new forms of amber support makes sense for developed countries, but not for developing countries: this is another example of the bias within the AoA. For developing countries that are able to provide domestic support, the regulations are also unfair. Developing countries were largely left out of the negotiation of the Green box and as a result, some programs of interest to them are not exempted from liberalization commitments. A well-known example is India. Not withstanding the complexities of the situation, India may be required to make reductions to its domestic support payments because their programs were not included in the Green box and their level of support may exceed the allowed de-minimus exemption. The rhetoric of liberalization is evoked to explain that developing countries can not carve out appropriate exemptions for themselves for the just goal of food security. It is quite obvious however, as illustrated by the Green Box, that developed countries are able to do so for the ignoble goal of economic and political self-interest. The ability for developing countries to introduce new measures of support for their domestic market should be preserved to build the necessary capacity to compete within a liberalized market structure. The Green Box contradicts the principle of liberalization within the AoA by allowing developed countries to maintain measures of support that are necessary to preserve their agricultural industry. Although the measures included in the Green Box are available to developing countries, it is suggested that the administrative cost associated with the implementation of these measures places them beyond the reach of poor countries. The presence of the Green Box illustrates that developed countries have committed to a system of managed trade, not truly liberalized trade, that allows them to continue to support their economic interests. Developed countries, such as both Canada (30) and the US, have reworked some elements of their domestic support structures so they fit into the Green Box provisions. This calls into question their commitment to level the playing field for less developed countries. Similarly, the Blue Box was included to protect the economic interests of the EU and the US. (31) It is hypocritical to argue that developing countries should not rely on the crutches of subsidization to compete in the area of agriculture, when developed countries are doing exactly that through mechanisms they have written into the Agreement. It is equally hypocritical to use the language of liberalization to justify provisions which manage trade for the advantage of the most wealthy countries, while denying producers in less wealthy countries fair prices for their crops. The Blue Box should be eliminated and the terms of the Green Box should be clarified. Export Subsidies Export Subsidies refer to government incentives given to facilitate or encourage export production. The AoA set out to reduce export subsidies according to the chart below. Export Subsidy Commitments Developed Countries Developing Countries • 36% reduction in export subsidies over 6 years. • 24% reduction in export subsidies over 10 years. • 21% reduction in the quantities of subsidized exports over the six years. • 14% reduction in quantities of subsidized exports over 10 years. • Countries who do not currently subsidize their exports were banned from introducing new export restrictions • Article 10 of the Agreement covers provisions regarding circumvention of export subsidies and urges the creation of international disciplines that will monitor and regulate the use of export credits. • Article 10 also contains rules regarding food aid: Member donors of international food aid shall ensure: a) that the provision of international food is not tied directly or indirectly to commercial exports of agricultural products to recipient countries; b) that international food aid transactions, including bilateral food aid which is monetized, shall be carried out in accordance with the FAO "Principles of Surplus Disposal and Consultative Obligations," including where appropriate the system of Usual Marketing Requirements (UMRs); and c) that such aid shall be provided to the extent possible in fully grant form or terms no less concessional that those provided for in Article IV of the Food Aid Convention 1986. (32) * Least developed countries do not need to make any cuts. IMPLICATIONS OF THE EXPORT SUBSIDY RESTRICTIONS FOR DEVELOPING COUNTRIES Impact of Export Subsidy Restrictions within Developing Countries Like domestic support measures, many developing countries do not have export subsidies in place. In most cases, these were eliminated by the imposition of Structural Adjustment Policies without any regard to food security. Because current tariff rates can not be increased, developing countries are left to compete unfairly against the highly subsidized exports of developed countries. In an ideal liberalized future, developing countries will not need to compete against subsidized exports, but this argument does nothing to address their current situation. Furthermore, there is no guarantee that this ideal liberalized state will ever materialize and developing countries are without recourse. The international community must give precedence to international commitments to food security and the right to food. The ability of nations to pursue food security policies that fulfill these commitments must be upheld. If the World Bank and the International Monetary Fund (IMF) are to avoid the mistakes of the SAPs, they must make food security a central part of the new Poverty Reduction Strategy Papers (PRSP).(33) The WTO must likewise uphold these commitments. Canada, as both a co-signer of the Universal Declaration of Human Rights, which includes the right to food, and a member of the WTO, has a responsibility in ensuring this goal. Impact of Export Subsidy Restrictions in the International Arena The Agreement on Agriculture perpetuates the high export subsidies maintained by developed countries that keep international food prices artificially low. Developed countries, like the US and the EU, are only required to reduce their export subsidy levels by 36%. Because these governments can afford to give their farmers significant incentives to produce food for export, they can continue to compete unfairly against largely unsubsidized exports from food exporting developing countries. Subsidized exports from OECD countries undermine the ability of local producers in developing countries to compete. **************************************************************************** In Mindanao, Philippines, exports of maize from a US transnational corporation (TNC) into the Filipino market at prices far below the price of domestic corn meant that local farmers could not compete and were forced to give up farming. (34) The US farming industry, however, does not compete on terms of free trade. It subsidizes its farmers to the extent of US$29,000 per farmer.(35) When the United States was implementing its export subsidy commitments, export subsidy commitments were continued at maximum allowable levels and domestic and export market promotion program funding was increased by US$600 million over five years.(36) **************************************************************************** The WTO should completely eliminate export subsidies. Research into the market distorting effect of TNC market power and possible price distorting activities of powerful agribusiness corporations must be done both within and outside the WTO. Recommendations to correct any distortions should be carried over to the WTO regulations. In addition, the WTO should draft and implement regulations to enforce the appropriate use of export credits according to Article 10. Reluctance on the part of the organization to enact these procedures once again raises skepticism about its willingness to discipline developed countries who are often the offenders. The provisions for food aid under Article 10 are a welcome part of the AoA. Careless use of food aid can have devastating effects on developing countries. The famine relief aid provided by surplus grain from the US, for example, destroyed the indigenous millet market in Africa.(37) The WTO should make every effort to ensure that food aid is properly administered. Only in the case of Net Food Importing Developing Countries (NFIDCs) is there a benefit from export subsidies. The WTO should implement temporary measures to insure that NFIDC do not suffer from increased prices or reductions in food aid caused by reductions in export subsidies. A facility to enable NFIDCs to cope with foreign exchange shortages must also be put in place.(38) Although the WTO has begun to address these concerns through the Marrakesh Decision,(39) the lack of implementation and the ambiguity surrounding the provisions once again illustrates a lack of commitment to the needs of developing countries. Limitation of the Special and Differential Treatment for Developing Countries Each of the pillars contains provisions for special and differential treatment for developing countries and exclusions for Least Developed Countries. These provisions are designed to promote flexibility through longer phase-in periods and reduced commitments toward liberalization. *************************************************************************** Example: If a developed country has a 100% tariff on barley, under the AoA, the country would be required to reduce the tariff by a minimum of 15% over 6 years. The average reduction on all agricultural products must be 36%. In contrast, a developing country with the same rate of tariff would be required to reduce the applied tariff by a minimum of 10% over 10 years. The average reduction on all agricultural products must be 24%. ************************************************************************** The special and differential treatment clauses contained in the Agreement do not adequately address the needs of developing countries. They lump all developing countries into one category under the same provisions. In reality, the needs of developing countries vary a great deal. Other classifications, such as those used by the World Bank, allow for differentiation between developing countries. The same should be true for the WTO. The special and differential treatment clauses are overly optimistic. Giving developing countries only 4 years longer than developed countries to make major economic and social transitions is unrealistic. The tariff and export subsidy reduction commitments are similarly unsophisticated: the developing countries rate (eg.24%) was simply determined by calculating two-thirds of the rate for developed countries (eg.36%). These provisions were often decided arbitrarily and without the participation of or even consultation with developing countries. At a more substantial level, the provisions for S&D treatment are minor variations on the theme of liberalization rather than a serious acknowledgement of the impacts of the trade agreement on food security. It has been suggested that developing countries should not attempt to meet their needs through special and differential treatment because these clauses are seen as protectionist and undermine their long-term bargaining power.(40) The irony is that the AoA is replete with provisions that protect the interests of developed countries right within the Agreement, without even labeling it a special treatment. Moreover, basic food security is a more legitimate basis for seeking exemptions or special treatment than some of the political interests which motivated the built-in special interest policies for some developed countries. POLICY RECOMMENTATIONS Food security needs of developing countries must be addressed on several levels within the multilateral trading system and the Agreement on Agriculture. First, there is the need to enhance the capacity of developing countries to participate effectively within the WTO. Second, the relationship of the WTO to other international organizations needs to be addressed in order to promote coherence and accountability. Finally, there are several, different options for enshrining food security within the AoA. Each one has both advantages and disadvantages, which will be considered below. None of the options are inherently mutually exclusive. Specific Policy Options Structural Reform: The Canadian government, in conjunction with other like-minded governments, could push for full participation by developing countries in decision-making within the WTO. Canada could commit to funding appropriate capacity building initiatives within and outside the WTO, including research into the possible market and price distorting effects of TNCs. Further implementation of trade liberalization should be contingent on the provision of resources by those economies which benefit to help developing countries acquire the technical expertise, infrastructure, and voice within decision-making structures to defend their interests within the WTO. Pros: • • • The Canadian government has already taken some steps in this direction by providing funding for the creation of an advisory center on WTO law for developing countries (41). The government could be encouraged to implement broader, more effective steps to address the deeper capacity building needs of developing countries Developing countries would be able to participate fully in the negotiating procedures of the WTO and push for appropriate measures to address their concerns. They could insist more effectively on the terms and implementation of the Marrakech Decision and other mechanisms that are designed specifically for developing countries. • • Alternate international bodies such as UNCTAD could provide an outside check on the WTO to reinforce the developing countries. Developing countries would not be solely left to absorb the spillover costs associated with liberalization. Cons: • • The full costs of liberalization, including crop diversification, can not be adequately addressed through the WTO. This method alone, therefore, will not fully address the capacity building needs of developing countries. The current agreement and its implementation illustrate that countries are inclined to act in their own self-interest and disregard the interests of developing countries. The technical assistance mechanisms and the Marrakesh Decision, for example, were not implemented even though they are part of the WTO. To expect that enhanced participation in the WTO will force developed countries to pay more than lip service to the unique needs of developing countries may be overly optimistic. Coherence in International Policy: Food security should be a top priority in the development and implementation of Poverty Reduction Strategy Papers (PRSP) for specific developing countries. The Agreement on Agriculture, under the WTO, should be required to comply with the PRSP when setting up specific trade commitments and exemptions for a given country. Pros: • • • • The food security needs of developing countries are country specific, contingent on many other domestic factors, and need to be integrated with other development plans. The PRSP is the best vehicle to allow for comprehensive and detailed consideration of food security policies, which are essential for poverty reduction. The specific liberalization commitments of developing countries will be more flexible if they are determined by the food security agenda within the PRSPs. PRSPs provide opportunity for civil society input and work with national governments; they are less likely to be dominated by narrowly defined interests. Ensuring that the WTO, as well as the other International Financial Institutions (IFIs) uphold the policies agreed upon in the PRSPs, would bring consistency and accountability within the international systems that affect the future of developing countries. Cons: • The PRSPs come with the Enhanced Structural Adjustment Facility initiatives which are based on the same philosophy as the WTO. In fact, some World Bank conditionalities actually force developing countries to join the WTO and require them to uphold their commitments, if they are already members. • The jury is still out on the effectiveness of the PRSPs in addressing the issue of food security. In order for these policies to promote food security, the PRSPs will have to include effective participation of civil society and strong mechanisms to ensure accountability and consistency. They will need to be substantially different from their predecessors, SAPs, which were guided by the assumptions of liberalization. Commitments and Principles: The principle of food security could be enshrined in the preamble of the AoA with direction that all specific provisions must be implemented and evaluated in keeping with this principle. Pros: • • • • Enshrining the principle of food security within the preamble of the AoA gives priority to international commitments to food security and the right to food. This option will allow countries to argue for modification to the regulations according to this principle as the trade climate changes. Developing countries will have a legitimate basis to demand modifications to the commitments of developed countries that adversely affect their food security (such as more substantial reductions in import tariffs by developed countries). If food security is recognized as a legitimate goal within the AoA, it will ensure that the rules of the AoA do not compromise the food security commitments put in place by other organizations such as the United Nations and the World Bank. Cons: • • • • A preamble is never binding on states. It may be used for interpretation purposes if there is any doubt or a difference in opinion on what a given binding article means. The terms of any definition can be ambiguous. Countries often exploit these types of ambiguities for their self-interest. Concepts of fair price risk being subsumed by the liberalization ethos; this has already happened with the concept of sustainable development within the WTO. Politically, it will be difficult to achieve meaningful recognition for food security within the AoA. Upholding the Principle of Market Access Canada and like-minded countries could take the lead in upholding unrestricted market access commitments for LDCs. In keeping with the spirit of Recommendation 13 and 14 of the parliamentary committee (42), Canada could ensure that the implementation of its market access commitments do not disadvantage developing countries. Canada should ensure that it does not take advantage of the loopholes or flexibility of the AoA to the detriment of developing countries. Canada should push for appropriate flexibility for developing countries to manage their own market access conditions. Pros: • • Canada could show leadership in addressing developing country concerns within its own borders and act as a catalyst for other countries to do likewise Canada has recognized the need to balance its liberalization commitments within the scope of the AoA. It would be consistent for Canada to push for the right of developing countries to maintain appropriate flexibility for market access and the creation of provisions and mechanisms within the WTO to address these concerns. Cons: • Canada currently holds a contradictory position: on the one hand it is clearly positioned in favour of liberalization; on the other hand Canada wants to maintain its ability to protect specific industries. The Canadian government is unlikely to implement any market access changes that will jeopardize political or economic support for the AoA among Canadian farmers. Reform Special and Differential Treatment Provisions: Food security could be addressed through an expansion of the special and differential treatment provisions. All trade related food security concerns would be addressed within the specific S&D provisions in each pillar of the AoA. The concerns addressed should be: 1. Flexibility on import tariffs 2. Special Safeguards 3. A domestic support box which allows for food security programs applicable to the needs of developing countries. 4. Exemptions from minimum access requirements especially for basic food items Pros: • • • • Special and differential treatment clauses are already recognized as a forum for developing countries to assert their special needs. They provide a natural opening for developing countries to demand non-reciprocal provisions for food security. Special and differential clauses are set aside for developing countries; placing food security within these clauses will protect them from being used by developed countries for self-interested purposes Addressing food security concerns throughout the AoA will embed the principle of food security within the AoA and draw attention to the trade related aspects of food security. Although the above list is not exhaustive, it would become a basis for addressing the food security concerns of developing countries within their domestic markets Cons: • • Special and differential clauses are seen as protectionist concessions to developing countries which undermine their negotiating power. Placing food security in this context could detract from the credibility and validity of the concept. International factors, such as export subsidies by developed countries, that also impact food security, cannot be easily accommodated through S&D treatment. Food Security Box: The creation of a food security box could begin by defining food security. It could contain specific policy measures designed to address the food security issues identified in each of the three pillars. The box could also contain specific policies to address the capacity building needs of developing countries related to food security. The specific policy measures could include: 1. Flexibility in import tariffs 2. Special Safeguards to protect against import surges 3. Domestic support measures for food security programs applicable to the needs of developing countries 4. Exemptions from minimum access requirements especially for basic food items 5. Adequate technical assistance to make use of food security provisions 6. Adequate financial assistance to address efficiency and diversification issues. Any assistance must ensure the short and long term sustainability of transitions for the individual, community and nation. 7. A multilateral compensatory food import facility to enable Net Food Importing Developing Countries to cope with foreign exchange shortages. 8. Implementation of the Marrakesh Decision to protect the interests of Least Developed Countries and Net Food Importing Developing Countries Pros: • • • • 1. 2. 3. 4. Incorporating food security as a foundational premise of the AoA through a designated box would ensure that the regulations of the WTO would not compromise international commitments to the right to food and food security. A food security box could incorporate both specific policies and basic principles to address food security needs. Food security as the basis for specific policies may avoid protectionist connotations or the rhetoric of liberalization. It would give developing countries a further basis to demand appropriate concessions from developed countries such as: Substantial reductions in import tariffs Elimination of export subsidies Elimination of tariff escalation practices Elimination of tariff peaks 5. Elimination of Special Safeguard actions to block imports into developed countries from developing countries especially LDCs. 6. Prohibitions on dumping 7. Clarification of the Green Box exemptions to ensure the food security of small farmers 8. Substantial reductions in levels of AMS support Cons: • Food Security provisions, like special and differential treatment, could become window dressing for liberalization rather than provisions that uphold food security. SUMMARY The internationally recognized principle of food security must be explicitly endorsed within the Agreement on Agriculture. Although the AoA was initiated under the auspices of liberalization, the terms of the Agreement are formulated to protect the self-interest of developed countries. It is fundamentally unjust that developing countries are not given sufficient latitude to protect their legitimate need for food security. Market Access, Domestic Support and Export Promotion are instrumental components in determining the supply, price, and utilization of food in domestic and international markets. As a result, these factors are integral for food security. Specifically, developing countries should receive the following provisions for the purpose of food security: Unilateral Provisions for Developing Countries Concessions from Developed Countries Capacity Building Initiatives for Developing Countries 1. Flexibility in import tariffs 1. Substantial reductions in import tariffs 1. Adequate technical assistance to make use of food security provisions. 2. Special Safeguards 2. Elimination of export subsidies 3. A domestic support box which allows for food security programs applicable to the needs of developing countries 4. Exemptions from 3. Elimination of tariff escalation practices 4. Elimination of tariff peaks 5. Elimination of Special Safeguard actions to block 2. Adequate financial assistance to address efficiency and diversification issues. 3. Implementation of the Marrakesh Decision to protect the interests of LDCs and NFIDCs minimum access requirements especially for basic food items imports into developed countries from developing countries especially LDCs. 6. Prohibitions on dumping 4. Provisions for a multilateral compensatory food import facility to enable NFIDC to cope with foreign exchange shortages 7. Clarification of the Green Box exemptions to ensure the food security of small farmers 8. Substantial reductions in AMS levels of support Agricultural production is about our human need for food, not simply about markets. It is true that not all regions of the world can or should attempt to be competitive in the area of agriculture exports. Households and countries may be able to rely on the international supply of food to satisfy their needs, but only if the rules for trade are fair and give priority to the need for food security. In short, developed and developing countries must work together to ensure that more liberalized trade agreements are compatible with food security. APPENDIX ONE: THE WTO Fundamental Principles The World Trade Organization is premised on the economic philosophy of trade liberalization: the reduction of trade barriers such as subsidies and tariffs. Underpinning the ethos of trade liberalization, is the need for transparency, and uniformity within the multilateral trading system. Transparency reflects the need to make the conditions governing trade with a particular country apparent to all the trading partners. For example, within the AoA, the conversion of Non-Tariff Barriers (NTBs) into simple tariffs through the process of tariffication was designed to increase the transparency of trade barriers within the agricultural sector. Uniformity refers to the application of all regulations equally to all member countries. This principle is most evident in the Most Favored Nation (MFN) principle that underlies all WTO regulations. The MFN principle guarantees the extension of the same terms of trade to all countries. The reduction of tariffs for all trading partners equally (over riding the Generalized System of Preferences (GSP) in which countries extended preferential market access to specific trading partners) exemplifies the MFN principle. Taken together, transparency and uniformity are designed to create predictability with the international trade system. Structural Elements The creation of the World Trade Organization (WTO) marked a radical departure from the previous multilateral trading system, the General Agreement on Trade and Tariffs (GATT). The major innovations are: • • • • The single undertaking structure The inclusion of special and differential provisions The inclusion of temperate agricultural products among other new issues The creation of the Dispute Settlement Body The WTO is structured as a single undertaking.(43) All member countries are obliged to accept the commitments agreed to in all the areas of trade covered by the Agreement. In other words, countries can not opt into the Agreement on Agriculture, for example, and out of the agreement on intellectual property. Coinciding with the comprehensive structure of the WTO, was the formal inclusion of binding special and differential treatment clauses. Although the concept of special and differential treatment was embodied in the Enabling Clause that was introduced at the end of the Tokyo round in 1979, it did so in "discretionary and permissive, rather than legally binding terms" (44). The special and differential clauses are designed to reflect the unique trade challenges faced by developing countries and LDCs. Unlike the GSP that allowed developed countries to extend preferential market access to developing countries on a non-reciprocal basis, the special and differential treatment clauses provide flexibility in the implementation of Uruguay Round Agreements (URAs) to all developing countries and least developed countries in a transparent and consistent manner. From the perspective of developing countries, the single undertaking structure of the WTO is beneficial because, for the first time since the formation of the GATT in 1948, all countries within the multilateral trading system are signatories to agreements on agriculture and textiles. Under the GATT, agriculture products were largely ignored and textile trade was governed by the highly restrictive multi-fiber agreement (MFA) (45). As a result, developing countries faced high tariffs and other prohibitive trade distorting measures. The GSP and other preferential trading arrangements did, occasionally, include agricultural products, but there was no consistent pattern. Furthermore, the GSP often caused export volatility rather than security (46). Thus the inclusion of the AoA can be seen as positive because it reflects international community recognition of an area of trade that is key to the interests of the developing countries. The WTO is also equipped with a Dispute Settlement Board (DSB). The DSB is the organ of the WTO responsible for the resolution of trade disputes between member countries. Any member can request the formation of a panel of legal specialists on any matter. The panel can have either a consultative or arbitration role. The ultimate power of the DSB is measured by the willingness of countries to abide by its decisions. Failure of a country to comply with a ruling from the WTO commonly allows the complainant to take retaliatory actions against the other country. Typically, these take the form of tariffs. APPENDIX TWO: THE GREEN BOX The Green Box includes the following policies that are exempt from domestic subsidy reduction commitments. General Services such as services for research, pest control, training, extension, advice, inspection, marketing and infra structure services (other than subsidies to inputs and operating costs Public Stockholding for food security purposes Domestic food aid Direct payments to producers (which may not be linked to production) Decoupled income support Income insurance and income safety net programs Payments for relief from natural disasters Structural adjustment assistance provided through producer retirement programs Structural adjustment assistance provided through producer resource programs Structural adjustment assistance provided through investment aids Payments under environmental programs Payments under regional assistance programs • • • • • • • • • • • • ACRONYMS AMS AoA CAP DSB FAO GATT GSP IFI IMF LDC MFA NFIDC NTB PRGF PRSP S&D SAP SSG TNC TRQ URA WTO Aggregate Measure of Support Agreement on Agriculture Common Agricultural Policy Dispute Settlement Board Food and Agriculture Organization General Agreement on Trade and Tariffs Generalized System of Preferences International Financial Institutions International Monetary Fund Least Developed Countries Multi-Fiber Agreement Net Food Importing Developing Countries Non-Tariff Barriers Poverty Reduction and Growth Facility Poverty Reduction Strategy Paper Special and Differential (treatment) Structural Adjustment Policy Special Safeguard Transnational Corporations Tariff Rate Quota Uruguay Round Agreements World Trade Organization ENDNOTES (1) FAO (1999) The State of Food Insecurity in the World 1999, Food and Agriculture Organization of the United Nations, Rome. The report states that although the number of undernourished people in developing countries has dropped by 40 million people since 1990-92, "a closer look at the data reveals that in the first half of this decade a group of only 37 countries achieved reductions totaling 100 million. Across the rest of the developing world, the number of hungry people actually increased by 60 million." (Emphasis added) p4. (2) Food and Agriculture Organization, (1999) FAO Symposium on Agriculture, Trade and Food Security. paper No. 3 par. 82 (3) FAO, (1996), Socio-Political and Economic Environment for Food Security, Food and Agriculture Organization of the United Nations, World Food Summit, Vol. 1, sec. 1.4 (4) The right to food has been upheld by: Art. 25 of the Universal Declaration of Human Rights, Art 11 of the International Covenant on Economic, Social and Cultural Rights, and the Universal Declaration on the Eradication of Hunger and Malnutrition Adopted on 16 November 1974 by the World Food Conference. (5) Oxfam, (1999) Loaded Against the Poor World Trade Organization, Oxfam, Great Britain. "In 1996 agriculture accounted for 73% of the labour force in LLDCs (59% in all developing countries) …" p. 13 (6) See Stevens, Christopher, et al., (1999), The WTO Agreement on Agriculture and Food Security, Institute of Development Studies, Sussex University. (7) Stevens (1999) p.3 – Food Security within the WTO is dealt in the context of Net Food Importing Developing Countries (NFIDC) where concerns center around imports. (8) FAO Symposium, paper no. 3, par. 18 (9) See Wolter, Frank, Director, Agriculture and Commodities Division, WTO, at a recent address to the FAO "Enhancing Food Security: Reflections on the contribution of Trade" www.wtowatch.org/library (10) Parris, Brett, (1999), Trade for Development: Making the WTO Work for the Poor. World Vision discussion paper. p. 28 (11) The Agreement on the Application of Sanitary and Phytosanitary Measures or SPS Agreement also has significant impacts on trade in Agriculture. (12) FAO, (1996), The Rome Declaration on World Food Security and World Food Summit Plan of Action, Food and Agriculture Organization of the United Nations, Rome, November 13. Commitment 4 of the Action Plan commits "to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair and market-oriented world trade system" (13) See Appendix 1 for details (14) See Wolter, Frank, Director, Agriculture and Commodities Division, WTO, at a recent address to the FAO "Enhancing Food Security: Reflections on the contribution of Trade" www.wtowatch.org/library (15) WTO, (1994) The Results of the Uruguay Round of Multilateral Negotiations: The Legal Texts, World Trade Organization, Geneva. p. 43-71. Article 20 refers to the need to evaluate the impact of the Agreement on non-trade concerns. Food Security is listed among other factors in Annex 5, (Section 1, par. D) of the AoA. (16) Raghavan, Chakravarthi, (1990) Recolonization: GATT, the Uruguay Round and the Third World, New Jersey,Zed Books Ltd.. (17) The Cairns group is currently made up of a group of 18 non-subsidizing agricultural exporters including Canada. 15 of the members are developing countries. At the time of the negotiations (1986-1993) there were 15 members of the Cairns group. For more information on the Cairns group see www.dfat.gov.au/trade/negotiations/cairns_group/ (18) International Agriculture Trade Research Consortium (IATRC). (1997) Bringing Agriculture into the GATT Implementation of the Uruguay Round Agreement on Agriculture and Issues for the Next Round of Agriculture Negotiations p. 140 (19) WTO (1994), p.55 (20) FAO (1999) par. 75-77 (21) For a concrete proposal of how this balance may be achieved through the current framework of the AoA see McClachy (2000) (22) FAO symposium (1999) pp. 27 (23) Parris, (1999) p. 30 (24) Agreement on Agriculture: Special and Differential Treatment and a Development Box Proposal to the June 2000 Special Session of the Committee on Agriculture by Cuba, Dominican Republic, Honduras, Pakistan, Haiti, Nicaragua, Kenya, Uganda, Zimbabwe, SriLanka and El Salvador. "When compared to the non-tariff barriers of the 1990s, an ESCAP* study reveals that the EU's final bindings for the year 2000 are almost two-thirds above the actual tariff equivalent for 1989-1993. For the US, they are more than three-quarters higher. Furthermore, for major agricultural products, developed countries' tariffs are about twice as high as those of developing countries. For 2 major cereals, wheat and maize, the bound tariff rates for developing countries are 94% for wheat and 90% for maize. In contrast, the OECD average in the first year of implementation (1995) was calculated at 214% for wheat, 197% for barley, 154% for maize (FAO 1996)**." *ESCAP (1996) "Agricultural Policy Reform under the Uruguay Round: Implications for Developing Countries in the Escap Region," Asian and Pacific Developing Economies and the First WTO Ministerial Conference: Issues of Concern, United Nations, New York. **FAO (1996), Policy Options for Developing Countries to Support Food Security in the Post Uruguay Round Period, Panos Konandreas and Jim Green field. Rome. (25) McClachy (2000), p.1 (26) "Notwithstanding import access increases for products like butter and margarine for which imports were previously effectively prohibitive." IATRC (1997) p. 46& p. 51 (27) WTO (1994) p. 59, See Appendix 2 for full list of Green Box exemptions (28) WTO (1994) p. 55 (29) IATRC (1997) p.42-58 (30) Although the Americans have reformed their farm bill, the FAIR Act, to make it Green Box compliant, the EU has not made parallel changes. (31) WTO (1994) Article 10.4 p. 52 (32) The Poverty Reduction Strategy Papers (PRSP) and the Poverty Reduction and Growth Facility (PRGF) to which they are linked, resulted from the criticism of the Structural Adjustment Policies (SAP) previously imposed by World Bank and IMF. The Strategy Papers will cover about 70 countries and will represent comprehensive national plans for poverty reduction, embracing national social and economic policy, lender policy and the programmes of bilateral donors. The Bank and the Fund are promoting these papers as being country owned holistic in their approach to poverty reduction and development. There is considerable concern however, regarding the preeminence given to liberalization policies within the PRSPs. For more information consult: EURODAD (2000), An Independent guide to PRSP, Spring. www.oneworld.org/eurodad (33) Bennholdt-Thomsen, Veronika, and Mies, Maria, (1999) The Subsistence Perspective: Beyond the Globalised Economy Zed Books, London, p. 44. (34) Ibid, p.44 (35) IATRC (1997) p. 6 (36) Bennholdt-Thomsen, Veronika, and Mies, Maria, (1999) p. 82 – See North American Congress on Latin America (1976), Weizen als Waffe: Die Neue Getreidestrategie der amerikanischen Ausssenpolitik, Reinbek bei Namburg. and Imfeld, Al (1975) Hunger und Hilfe, Provokationen, Zurich. (37) Raffer, K., (1997) "Helping southern Net Food Importers after the Uruguay Round: A Proposal", World Development, Vol. 25, No11, November, pp. 1901-1907. (38) WTO, (1994) The Results of the Uruguay Round of Multilateral Negotiations: The Legal Texts, World Trade Organization, Geneva., p. 395. The Marrakesh Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food Importing Developing Countries covers issues concerning food aid, export credits, short term financing difficulties, and promises technical assistance to improve agriculture productivity and infrastructure. (39) See Special and differential treatment section in: Josling, Tim, (1999), Developing Countries and the New Round of Multilateral Trade Negotiations: Background Notes on Agriculture, Institute for International Studies, Stanford, November. Paper prepared for the Workshop on Developing Countries and the New Round of Multilateral Trade Negotiations, Center for International Development at Harvard University, Cambridge Mass. (40) Government of Canada, (1999) CANADA TO CONTRIBUTE $1.5 MILLION TO CREATE ADVISORY CENTRE ON WORLD TRADE ORGANIZATION LAW TO ASSIST DEVELOPING COUNTRIES, Department of Foreign Affairs, Canada, December 1. (41) Report of the Standing Committee on Foreign Affairs and International Trade (1999), "Recommendation 13: Canada should also make sure that the new rules on agricultural trade are transparent and apply equally to all countries according to their respective commitments. … Recommendation 14: In the upcoming trade talks, Canada should endeavor to maximize access for Canadian farm exports, but without jeopardizing its ability to maintain orderly marketing systems or its flexibility in developing national farm support programs, and especially without using agriculture as a whole or a specific agricultural product as a bargaining chip." (42) Wolfe, Robert, (1996), "Global trade as a Single Undertaking: the role of ministers in the WTO," International Journal, Fall 51 (4), 690-709 (43) Michalopoulos, Constantine, (2000), Trade and Development in the GATT and the WTO: the role of Special and Differential Treatment for Developing Countries, Working Draft. 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