Trade Commentary - January, 2008

The New Year kicked of with a bang as another intensive round of negotiations took place in Geneva from January 3-11, 2008. The discussions centered on a group of working papers that Crawford Falconer had released during the past couple of months. The papers focused on all three pillars (domestic support, market access, export competition) and were intended to illustrate areas where progress had been made and to spur further discussion in areas where divisions exist.

Some of the highlights of the working papers included text that suggested the complete elimination of in quota tariffs and stiff initial cuts to major spenders of domestic support. The papers remained largely un-changed with respect to sensitive products; however, there is still room for debate on how many product lines can be protected as sensitive.

The discussion and debate centered on market access concerns and yielded some progress. In particular, the EU announced they would consider the elimination of the special safeguard mechanism. This is the first time the EU has shown flexibility on this issue and added a level of momentum to the meetings.

The momentum of the negotiations in early January carried forward to the brief WTO mini-ministerial that was held in conjunction with the World Economic Forum at the end of January. Ministers from many countries re-iterated their support for an end to the Doha round by 2008. Some even anticipated the possibility of a full ministerial meeting by Easter.

Although politicians were quick to announce possibilities of a ministerial meeting, it is important to note that the revised texts on agriculture and non-agriculture market access have yet to be released. It is expected that both of these texts will be released in early February, which may prompt horizontal negotiations, involving tradeoffs across the two sectors. Further progress hinges on the reaction to these texts and whether countries are ready to make tradeoffs between sectors.

The CFA will provide the next update soon after the revised texts are released.