What happened at the WTO?
Rather than multiply the number of posts, I'll try to accumulate a number of links in this one over the next day or so.
What was the point
The point of these negotiations was to get a political agreement on a framework within which to pursue more detailed negotiations. The framework identifies issues to pursue (for example, elimination of export subsidies), issues not to pursue (for example, transparency in government procurement), and describes how issues are to be pursued (for example cut agricultural tariffs using a tiered formula). But lots of details are left out.
Negotiations to flesh out the framework will begin again in September. The European Union's (EU)'s trade representative, Pascal Lamy, indicated today that he thought the negotiations could be completed by the end of 2005 (about 12 months later than originally planned). The next conference of WTO member country ministers takes place in December 2005 in Hong Kong. If the agreement is completed in 2005, it could become effective in 2006. This WTO web page describes how the negotiations are organized: "The Trade Negotiations Committee".
The WTO web site and the text of the agreement
The WTO web site release on the negotiation results is here: "Round-the-clock meetings produce �historic� breakthrough". The text of the actual agreement is here: "Text of the �July package� � the General Council�s post-Canc�n decision". The U.S. Trade Representative's site has this useful bulleted list of key agreement elements: "Trade Facts".
Overviews
Peter Gallagher provides a preliminary analysis of the final document, here: "A guide to the WTO Framework Agreement. ".
Paul Blustein summarizes the agreement in the Washington Post: "Accord Reached On Global Trade".
"...In simple terms, the deal struck Sunday would work as follows: Wealthy nations would cut their subsidy payments to farmers, especially payments that tend to lead to overproduction and gluts in supply on world markets. Such subsidies have drawn widespread condemnation for depressing global crop prices and robbing farmers in poor lands of their livelihoods.
In return, developing nations would cut the steep tariffs that many of them maintain on agricultural and industrial goods, thereby expanding market opportunities for rich-country exporters.
But whether those cuts will be deep or shallow, immediate or gradual depends on how far negotiators are willing to go in making concessions as the Doha Round progresses. Sunday's deal leaves a huge amount of detail to be negotiated later, and negotiators here fought hard to keep many of their commitments as vague as possible to maintain their flexibility in the future talks..."
Michael Hughes of Reuters surveys reactions from a variety of countries and private charities (such as Oxfam):
"Europe Lauds WTO Deal; China Complains".
The August 3 issue of the weekly trade bulletin "Bridges" from the International Centre for Trade and Sustainable Development (ICTSD) has several articles on the negotiations: "WTO: July Framework Agreed At Eleventh Hour", " Agriculture: 'Remarkable Turn-Around' From Cancun", and "Work on Development Sees Limited Progress At WTO".
The Economist weighs in: "Progress at last, but still a long way to go".
Why was agreement reached in Geneva, but not in Cancun?
Peter Gallagher argues that Geneva succeeded because of the (1) the EU was willing to lay its agricultural export subsidies on the table (and French protests suggested that this was a proposal the world community had now but might not have later), and (2) because,while the text that formed the starting point in Cancun was an EU/US compromise, the text that formed the starting point in Geneva had input and buy-in from more countries and perspectives.
Peter Wilson, in The Australian contrasts the roles played by the less developed countries differed in Cancun and Geneva: "Poor nations flex trade muscles". A group of five countries or country-groupings (US, EU, Australia, Brazil and India) played a crucial role in the negotiations. Wilson provides a nice description of the origin of this group of "Five Interested Parties" or "FIP." Gustavo Capdevila writes about the changed negotiating roles of Canada and Japan, on the one hand, and Brazil and India, on the other: "TRADE: Recasting the Starring Roles in WTO".
Paul Blustein reports that the negotiations may have been successful, because poor countries were afraid of the damage that would be done to the WTO if they were not: "Poor Nations Put Premium on WTO's Survival ".
"...In the end, for all the fierceness of their differences over issues such as farm subsidies and tariffs on manufactured goods, the representatives of the WTO's 147 member countries stepped to the brink and saw that the abyss into which they might plunge was deeper and scarier than the leap they had taken in Cancun. Many fretted that the Doha Round, and conceivably the trade body itself, might not be able to withstand another Cancun-style blow.
Those concerns were particularly strong among developing countries, including some of the same Latin American, African and Asian nations that had celebrated their defiant stance at Cancun as a triumph over the arrogance of the United States and the European Union. Despite complaints that Washington and Brussels use their clout to tilt the terms of global trade in their own favor, developing countries are keenly aware that the WTO system protects the interests of poor lands, especially small ones, much better than if world trade were governed by regional blocs or by the equivalent of the law of the jungle..."
State Trading Boards
The agreement calls for the end of trade-distorting practices by State Trading Boards, such as the Canadian Wheat Board. This Canada.com story, "Canada's wheat board under fire as WTO members agree to cut farm subsidies", describes a certain amount of Canadian concern about this issue:
"...Ken Ritter, president of the Canadian Wheat Board, said he was concerned the deal would break a promise the Canadian government made to protect the grain marketing monopoly.
In a telephone conference call from Geneva after the deal was announced, Peterson said: "In terms of supply management and in the case of the wheat board, I have to be honest with you, we were under attack."
"It was one against 146. We had absolutely no allies at the negotiating table, so there's no doubt that the WTO is not going to be a friend of either supply management or the Canadian Wheat Board."
Canada's Agriculture Minister Andy Mitchell added: "In (the agreement's) text, it suggests that as a state trading enterprise...that it is operating in a manner that distorts trade, that it is operating and providing export subsidies and as such would be required to cease activities that would be defined as export subsidies."
"The position of Canada is that the wheat board does not operate in such a manner, that its actions are not trade-distorting."
"The wheat board has been challenged on a number of occasions in the past and on each occasion it has been found that it has not been operating in that manner."..."
Similar concerns have also been raised in Australia:
"End not nigh for single-desk sales: Vaile".
The "Group of 10"
The Group of 10 was a grouping of ten countries that sought to protect their agricultural sectors with subsidies and high tariffs. The countries included Switzerland, Japan, Norway, Taiwan, and South Korea. This July 23 Swissinfo report summarizes their negotiating objectives: "Switzerland defends agriculture subsidies".
The agreement calls for reductions in agricultural tariffs. This is a concern to countries like Japan and Norway, which protect agricultural sectors behind high tariff barriers. The Japan Times says that Japan sees a lot of flexibility in the agreement to protect its high agricultural tariffs: "WTO adopts framework accord for global trade".
"The agreement calls for the WTO to adopt a "tiered formula" under which products with higher tariffs will face deeper tariff cuts.
By taking into consideration positions of food-importing countries like Japan, the accord proposes that each WTO member be given discretion in designating politically "sensitive" products, such as rice for Japan.
"Without undermining the overall objective of the tiered approach, members may designate an appropriate number, to be negotiated, of tariff lines to be treated as sensitive, taking account of existing commitments for these products," it says.
On Saturday, Japanese Agriculture, Forestry and Fisheries Minister Yoshiyuki Kamei said at a news conference Tokyo supports the revised text because it "allows for a broad framework agreement where food-importing nations will continue to assert what they deem necessary."
In the agreement, the WTO remained uncommitted to a tariff cap or a ceiling for high-tariff products that the so-called Group of 10 food-importing countries, including Japan, strongly opposes in order to protect their high-tariff agricultural products.
"The role of a tariff cap in a tiered formula with distinct treatment for sensitive products will be further evaluated," the document says.
Japanese negotiation sources said the phrase indicates the WTO has effectively decided to postpone making a decision on the tariff-cap issue until future talks."
Norwegian farmers are concerned about the loss of tariff protection as well:
"Norwegian farmers fear new WTO agreement". With respect to the Swiss:
"Swiss give cautious welcome to global trade deal".
The Indians seem pleased
The Indian government and papers seem pleased with the results. Here's the Indian government's press release: "Major Victory for India in WTO Revised Framework Agreement". The Indian Express reports that "Delhi wears a broad smile at Geneva table". The Times of India reports: "Jai Kisan deal: India scores win at WTO". The Hindustan Times: "India has its way at WTO talks".
Revised Tuesday, August 3, 9:20 PM