Annex A
CAFOD comments on the Government's Response
to the 7th Report of the International Development Committee,
Session 2002-03, "Trade and Development at the WTO: Issues
for Cancún"
There is one notable gap in the Government's
response: Given events in Cancún, it is particularly regrettable
that it chose not respond to para 98, in which the Committee says:
In the absence of reliable estimates of either
the costs or the benefits, and in the face of opposition from
many developing countries who argue that pushing the Singapore
Issues will not lead to a genuine development round, we urge the
Government not only to stop promoting the inclusion of the package
of Singapore Issues on the WTO's negotiating agenda, but to persuade
its EU partners and the Commission to do so too.
In terms of what it did say, CAFOD offers the
following comments:
Para 34: DFID appears to be committing to carrying
out an impact assessment of the Doha round agreements after the
completion of the round. This is understandable in terms of methodology—it
is hard to analyse the impact of agreements that have not yet
been negotiated, but will be of little use to developing countries,
who need to know about likely impacts of different options when
negotiating an agreement.
Para 57: CAFOD does not accept that the "decoupling
of most EU subsidies from production is expected to have real
impacts on the volume of EU production." A series of independent
assessments conducted for the European Commission show that, in
most cases, production for cereals and other products will in
fact go up when compared to current production, putting further
pressure on already depressed world prices (see Table 1).
Table 1:
EU-15 CEREAL PRODUCTION 2002 AND 2009 (AFTER
THE INTRODUCTION OF THE MTR REFORM PROPOSALS)[54]
[55]
[56]
| Impact models—EU Production in 2009
| | | |
| | |
Projected EU-15
consumption
increase 2002-07
| | | |
| | | |
| EU Production 2002
(mill tonnes)
| CAPSIM | FAPRI | CAPRI
| CAPMAT | Average |
|
| Soft Wheat | 97.2 | 99.9
| 108.2 | 96.5 | 102.2
| 101.9 (+5%) | +4% |
| Maize | 40.7 | 42.6
| 42.0 | 38.9 |
| 41.2 (+1%) | +2% * |
| Barley | 48.5 | 47.8
| 51.5 | 50.0 |
| 49.8 (+3%) | |
| Durum wheat | 9.2 | 8.8
| 9.6 | 7.0 | 9.8
| 8.8
(-4%) | |
| Rice | 1.5 | |
1.8 | 2.9 | 1.2 |
2.0 (+33%) | +0.5% |
| Rye | 5.4 | |
4.7 | 6.0 | 4.5 |
5.1
(-6%) | |
| | |
| | | |
|
* Coarse Grains (Maize, barley, oats etc)
It is unlikely that the reference year for decoupled subsidies
will be "unchanging" as the Government claims. In practice,
farmers know that reference years are likely to be updated at
some point, which acts as an incentive to keep land in production.
This means that even notionally decoupled payments are in fact
linked to production.
It is not clear why the Government feels that discussions
on capping the Green Box would be counter-productive (unless it
is simply that the EC wouldn't like it). It is also worth noting
that, despite its expressed view that "we do not expect decoupled
payments to result in significant distortions", UK officials
in Cancún expressed serious concerns that a review of the
Green Box criteria, as proposed in the draft ministerial text,
could undermine CAP reform by making it harder to shift subsidies
from the Blue to Green Boxes. This was an implicit acknowledgement
that some aspects of decoupled payments may on closer scrutiny
prove to be trade distorting.
Para 96: CAFOD welcomes the UK Government's acknowledgement
that "The UK Government supports the application of joint
ventures, technology transfers, and employment generation requirements
to foreign investors. Members would need to list these requirements
in its schedules as exceptions to the non-discrimination principle."
It would welcome further discussion on this, as a commitment to
an industrial policy based on some degree of discrimination is,
in CAFOD's view, one of the key features in almost all successful
development strategies, and yet is undermined by including investment
in WTO issues such as the TRIMs and GATS agreements and was one
of the main objections to including investment negotiations in
the Doha Round.[57].
Para 100/101: While it is literally true that "developing
countries are not all unanimous that the [Singapore] issues should
be dropped from the Doha agenda", (in that Korea for example,
supported their inclusion), it was quite clear that most countries
opposed the EC line. CAFOD kept the UK Government informed of
the sizeable and growing majority of developing countries (over
100, by the time of Cancún) who had publicly opposed commencing
negotiations on them in Cancún, but was told that this
was merely tactical positioning, rather than a matter of conviction.
Cancún proved otherwise.
October 2003
54
Goodison, P Some Critical Reflections on the Impact Assessment
Studies of the CAP MTR Proposals. ERO, Brussels. Back
55
European Commission, 2003d. CAP Reform: Impact Analyses of
the Mid-term Review Proposals. http://europa.eu.int/comm/agriculture/publi/reports/mtrimpact/index-en.htm Back
56
OECD, 2001. OECD Agricultural Outlook 2001-06. Organisation
for Economic Co-operation and Development. http://www1.oecd.org/publications/e-book/5101061E.PDF Back
57
See for example The Northern WTO Agenda on Investment: Do as
we say, Not as we did (CAFOD/South Centre, May 2003). Back
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