G-20 and Brazil in WTO the Doha Round: Perspectives for Hong Kong

Transcription

1 Hong Kong 15 Les Paysans prennent la parole Première Séance: A quelles conditions la mondialization profite-t-elle aux Pays en Développement? G-2 and Brazil in WTO the Doha Round: Perspectives for Hong Kong Marcos S. Jank President, Brazilian Institute for International Trade Negotiations (ICONE) Professor, School of Economics, University of São Paulo (FEA-USP) Paris, France 3 November 25

2 GATT-WTO Negotiating Rounds and Number of Members Rounds Doha Uruguay Tokyo Kennedy Dillon Geneva Torquay Annecy Geneva Nb. members Source: WTO

3 Members WTO membership: increased developing country Developing Developed Source: WTO. Elaboration: ABARE-Australia.

4 Overview of Domestic Subsidies OECD - Producer Support Estimate (PSE%) 7% 6% 69% 68% 68% 63% 56% 5% 4% 3% 34% 3% 22% 21% 2% 18% 1% 8% 8% 5% 4% 3% 3% % Iceland Switzerl. Norway Korea Japan EU OECD Canada Notes: The %PSE expresses the total producer support as a percentage of gross farm receipts, measured by the value of total production (at farm gate prices) plus budgetary support. China and Russia data are 22-3 averages. Source: OECD PSE/CSE databases, 25. Mexico USA Poland China Russia Australia Brazil N Zealand

5 Doha Interest Groups Group Countries Agriculture Subsidies Access Industrial Goods Services United States European Union Free traders (Cairns) Ag resistant countries Australia, Chile, New Zealand, S.Africa G1: Japan, Korea, Taiwan, Switz, Norw Brazil, Argentina G-2 main players Developing: SP, preference erosion Developing: net food importers China India G-9 and G-33 LDCs and others = Offensive position = Defensive position

6 Legitimacy The Emergence of the G-2 Geographic distribution: Asia, Africa, Latin America. Most dynamic exporters and markets with the highest rates of growth. Traditional Coalitions x New Forms of Pressure: Cairns: old coalition based on common interests. G-2: heterogeneous pressure group based on technical & political capacity: fast response, measurable results.

7 1% 9% Agricultural Negotiations in the Doha Round: Main Coalitions G-2 USA EU (15) G-1 8% 7% 6% 5% 4% 3% 2% 1% % Total GDP Agricultural GDP Total Population Rural Population Agricultural Exports Agricultural Imports Notes: Data for GDP (21) population (21) and trade (23). EU excludes intra-trade. Source: FAO and World Bank. Elaboration: ICONE.

8 Agricultural Trade Negotiations: Main Issues Market Access: Tariff Peaks & Tariff Overhang ( water ) Tariff Escalation Specific Duties (conversion to ad valorem) Tariff-Rate Quotas Special Safeguards (SSG, SSM) Domestic Support: Amber Box payments Blue/New Blue Box payments Green Box disciplines De Minimis payments Overall cut of all distorting support Export Competition: Export Subsidies Export Credits Food Aid State Trade Enterprises & Monopoly Power Other Issues: Geographical Indications Differential Export Taxes (DET) Sectoral Initiatives: Level Playing Field

9 WTO: Overview of Total Domestic Support USD Billion AMS: trade-distorting price or income guarantee payments linked to current levels of production, whether or not directed at specific products. They are subject to binding and reduction commitments. S&D (Special and Differential Treatment): measures exempt from reductions for developing countries. De Minimis: trade-distorting payments, whether or not directed at specific products, which represent less than 5% of the production value. Blue Box: trade-distorting compensatory payments linked to production-limiting programs. They are exempt from binding and reduction commitments. Green Box: payments that cause minimal or no distortion, exempt from binding/reduction commitments Source: WTO notifications. EU US Japan Brazil

10 Agricultural Domestic Support EU "greening its subsidies for internal reasons: budget constraints, enlargement. US increasing subsidies: doubled in 2 Farm Act Unfair competition: no round if the US does not cut and "decouple subsidies. The new blue box loophole. Cotton case (US vs. Developing World): implementation and spillovers.

11 (USD billion) FSA Evolution of U.S. Subsidies 1989 CCC Net Outlays (fiscal year) FACT Net Outlays Notes: FSA: Food Security Act (1985); FACT: Food, Agriculture, Conservation and Trade Act (199); FAIR: Federal Agricultural Improvement & Reform Act (1996); FSRIA: Farm Security & Rural Investments Act (22) *US nominal farm gate prices of barley, corn, cotton, oats, rice, sorghum, soybeans and wheat. Prices are weighted according to the share of each crop in the total value of production ( average). (e) Estimate (b) Budget provisions. Source: USDA CCC. Elaboration: ICONE FAIR 1996 FSRIA Price Index (Weighted Average) (1994=1) 25e

12 USD Billion US: Domestic Support Main Commodities (F) Rice Wheat Soy Cotton Corn 26 (F) (f) forecast Source: USDA-CCC, Fiscal Years. Elaboration: ICONE.

13 Mar-4 May-4 Jul-4 Sep-4 Nov-4 Jan-5 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-2 Mar-2 May-2 Jul-2 Sep-2 Nov-2 Jan-3 Mar-3 May-3 Jul-3 Sep-3 Nov-3 Jan-4 1,,9,8,7,6,5,4,3,2,1, National Average Farm Price Loan Rate (LDP) Target Price less Direct Payment Rate (CCP) (US$/lb) Source : USDA US: Cotton (monthly prices).66.52

14 Billion or US$ % OVERHANG IN TRADE-DISTORTING DOMESTIC SUPPORT UNITED STATES & EUROPEAN UNION 62% 72% OTDS overhang OTDS AMS overhang AMS Blue framework Blue applied EU proposal US proposal G-2 proposal % % 62% EU-25 US EU-25 US EU-15 US OTDS AMS Blue Box Sources: European Commission and USDA/Commodity Credit Corporation. EU: OTDS and AMS applied levels estimations for EU-25 according to the provisions of the Fischler Reform of the CAP. Figures are estimates for billion were projected in OTDS. Data for the Blue Box refers to the latest EU-15 notification to the WTO. US: 24 data were collected in the USDA-CCC reports and adapted to the format of WTO notifications. Expenditures on CCP were included in the Blue Box. Elaboration: ICONE.

15 US$ Billions Overhang in Agricultural Domestic Support % 1% New Blue Box 62% Framework Applied US Proposal 1% 82% EC - 15 China USA India Japan Note: latest WTO notification in Blue Box. Data from the USDA-CCC of US for 24 (countercyclical payments expenditures) and projections of the Fischler Reform of PAC-EU for 28. Source: WTO notifications. Elaboration: ICONE.

16 Agricultural Trade Negotiations: Main Issues Market Access: Tariff Peaks & Tariff Overhang ( water ) Tariff Escalation Specific Duties (conversion to ad valorem) Tariff-Rate Quotas Special Safeguards (SSG, SSM) Domestic Support: Amber Box payments Blue/New Blue Box payments Green Box disciplines De Minimis payments Overall cut of all distorting support Export Competition: Export Subsidies Export Credits Food Aid State Trade Enterprises & Monopoly Power Other Issues: Geographical Indications Differential Export Taxes (DET) Sectoral Initiatives: Level Playing Field

17 Trade Barriers to Brazilian Exports (%) Bound Tariff Product EU USA JAPAN Raw Sugar 161* 133* 311* Ethanol 43* 46* 27 Powder Milk 64* 44* 155* Frozen Chicken Cuts 94* 12* 12 Frozen Pork 43* 136* Frozen Beef 124* 26 5 Corn 73* 1* 87* Tobacco Orange Juice 15 39* 25 (*) indicates that specific tariffs were converted into their Ad Valorem Equivalent (AVE) Underlined numbers indicate the existence of Special Safeguard Measures (SSG) Shaded cells indicate sanitary restrictions that act as a barrier to trade Source: WTO, APEC, COMTRADE, USITC, TARIC12 and ICONE

18 MARKET ACCESS Conflicts are worldwide. CGE models indicate that removal of tariffs has greater impact than subsidies elimination. 1. Sensitive Products EU, Japan, Norway, Switzerland, Korea. 2. LDCs: no commitments Around 32 countries: already decided. 3. Preference Erosion, Special Products: Largest group: LDCs, G-9, G-33. Ex.: sugar case/eu (developing countries divided) 4. Large consumers & rural populations India, China, Indonesia, (central role?) 5. Free-traders Net exporters: Australia, New Zealand, Brazil, Argentina, Chile, Central America, South Africa, Thailand. US and Canada are freetraders, but have have a few sensitivities (< 2 countries).

19 Market Access: Main Issues TARIFFS QUOTAS SAFEGUARDS Reduction Cap Escalation Expansion - volume Reduction - tariffs OLD ONES (SSG) NEW ONES (SSM) formula exceptions Special and Differential Treatment

20 Proposed Cuts Market Access Bands and Cuts for Developed Countries USA G-2 EU G Initial Tariff (AVE)

21 Proposed Cuts Market Access Bands and Cuts for Developing Countries USA G-2 EU G Initial Tariff (AVE)

22 AVERAGE AGRICULTURAL TARIFFS Bound x Applied Bound tariff Applied tariff Norway India Kenya Jamaica Colombia Cameroon Switzerland Japan Korea Venezuela Indonesia Mexico South Africa Bolivia Thailand Brazil Uruguai Philippines Paraguai Argentina Chile EU Canada China USA Australia Ad Valorem Equivalent (%) Note: 1) Specific and compound tariffs were converted into Ad Valorem Equivalents following the methodology agreed by WTO Members in 25. Source: WTO. Elaboration: ICONE.

23 NOTE: (1) EU TRQ volume: all quotes sum. (2) Canada - TRQ volume: applied volume (notified volume is 76.4). 9 TREATMENT FOR SENSITIVE PRODUCTS: IMPACT OF THE MAIN PROPOSALS ON TARIFF RATE QUOTA EXPANSIONS BEEF th ton EU (1) Canada (2) USA TRQ Volume Current imports USA Proposal Australia Proposal G-2 Proposal EU Proposal (2/3 deviation) EU Proposal (1/3 deviation)

24 TREATMENT FOR SENSITIVE PRODUCTS: IMPACT OF THE MAIN PROPOSALS ON TARIFF RATE QUOTA EXPANSIONS CHICKEN MEAT th ton EU (1) Canada (2) ,9 2,4 TRQ Volume Current imports USA Proposal Australia Proposal G-2 Proposal EU Proposal (2/3 deviation) EU Proposal (1/3 deviation) NOTE: (1) EU TRQ volume: all quotes sum. (2) Canada - TRQ volume: applied volume (notified volume is 39.8).

25 TREATMENT FOR SENSITIVE PRODUCTS: IMPACT OF THE MAIN PROPOSALS ON TARIFF RATE QUOTA EXPANSIONS SUGAR th ton EU (1) USA TRQ Volume Current imports USA Proposal Australia Proposal G-2 Proposal EU Proposal (2/3 deviation) EU Proposal (1/3 deviation) NOTE: (1) EU: THE TRQ VOLUME REFERS ONLY TO ACP QUOTE AND INDIA.

26 TREATMENT FOR SENSITIVE PRODUCTS: IMPACT OF THE MAIN PROPOSALS ON TARIFF RATE QUOTA EXPANSIONS 1 RICE th ton EU Japan TRQ Volume Current imports USA Proposal Australia Proposal G-2 Proposal EU Proposal (2/3 deviation) EU Proposal (1/3 deviation) 24 12

27 TREATMENT FOR SENSITIVE PRODUCTS: IMPACT OF THE MAIN PROPOSALS ON TARIFF RATE QUOTA EXPANSIONS MILK POWDER th ton EU 13 6,7 1,2 5,9 USA TRQ Volume Current imports USA Proposal Australia Proposal G-2 Proposal EU Proposal (2/3 deviation) EU Proposal (1/3 deviation) NOTE: (1) Canada volume s sum of wheat and wheat products. 1,,5

28 CONCLUSIONS Time is very short!! Disciplines beyond the status quo of ag trade policies? The risk of the Water Round : Bound vs. Applied levels of protection (tariffs, subsidies). Horizontal Rules vs. Exceptions & loopholes: Sensitive & Special Products, Preference Erosion, Special Safeguards (SSM, SSG), TRQs. Trade-offs: Global vs. Agriculture. Tariffs/TRQs (trade creation) vs. Subsidies (moral issue). Market Access: Free vs. Preferential trade interests. Endless discussion on Graduation: the trees and the forest.

29 Marcos S. Jank Homepage: Phone:

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