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Current State of Doha Round Negotiations on Agriculture: Issues, Concerns and Strategies for Bangladesh

Uttam Deb
Head, Research Division
Centre for Policy Dialogue (CPD), House No 40/C, Road No 11 (new), Dhanmondi R/A Dhaka?1209, Bangladesh

Muhammad Al Amin
Research Associate
Centre for Policy Dialogue (CPD), House No 40/C, Road No 11 (new), Dhanmondi R/A Dhaka?1209, Bangladesh

Abstract/ Executive Summary:

The paper is organized as follows: after introduction, section two reviews various negotiating modalities proposed in December 2008 Draft. Section three analyses the importance and potential of agricultural trade for Bangladesh, while section four attempts to estimate the likely impacts of the proposed modalities for Bangladesh’s agriculture and its economy. In section five, some concerns and negotiating strategies for Bangladesh are presented and finally, section six concludes. Negotiating proposals put forward through the current Revised Draft Modalities on Agriculture have important implications for Bangladesh agriculture. These proposals are likely to create net loss in economic welfare but production and export of some commodities will increase. It is expected that exports of livestock, sheep meat, bovine meat, poultry, hides and skins, banana, other tropical fruits (watermelon, melons, pineapples, papaya), tomatoes, roots and tubers (potato, radish, carrot, taro (kachu), stolon of taro (kachur lati)) and tea will be increased. On the other hand, the average international price of agricultural commodities may increase by about five percent which might adversely affect Bangladesh and other net food-importing countries. In recent times, food security of Bangladesh and other net food-importing countries have also been threatened by export restrictions imposed by different food-exporting countries. To mitigate such adversity Bangladesh should pursue the demands of the Dar es Salam Declaration which categorically demanded that “no non?LDC Member shall apply any export restriction on food items imported by any LDC”. Bangladesh should also demand unconditional food aid for LDCs so that they are compensated for the negative shocks on their food security. The present study also shows that Bangladesh may be benefited through duty?free and quota-free (DF?QF) export of various agricultural products identified in this paper at HS 6?digit level. We should strengthen our negotiation capacity to include these products under the DF?QF facility to ensure market access for these agricultural products in the USA. However, market access alone would not deliver the desired results. The country will face some challenges such as lack of supply-side capacity to exploit the opportunities. To this end, Bangladesh must have to take a more proactive interest also in other ongoing WTO negotiations such as trade-related intellectual property rights (TRIPS), trade-related investment measures (TRIMS), sanitary and phytosanitary measures (SPS), fisheries subsidies, and Aid for Trade. We should demand for support under “Aid for Trade” particularly in the areas of market information, human resource development, and development of facilities and systems for compliance with SPS requirements in developed countries especially in case of exports of shrimp and other agricultural commodities. In accelerating our exports, we would also require to design appropriate fiscal and monetary incentives to stimulate investment and production in the country. The establishment of SPS compliant facilities and certification system for exporting and importing agro?commodities, and enacting laws for the preservation of biodiversity and community knowledge, plant variety protection act will be necessary.

Keywords: Market access, Domestic support, Export subsidy, Agricultural trade, Tariff, Developing countries, Potential impacts, Economy, WTO

Location: In Bangladesh

Start Date: 00-00-2008

End Date: 00-00-2008

Program Area: Resource Development and Management

Commodity: Trade, Income generation, Market analysis

Objectives:

Specific objectives of the study are as follows: 1. To review various proposals made for enhancing market access, reduction in domestic support and elimination of export subsidy; 2. To analyze the importance and potential of agricultural trade for Bangladesh; 3. To quantify the impacts of the proposals on reduction in tariff, domestic support and export subsidy in important developed and developing countries; 4. To analyze potential impacts of the negotiating proposals on Bangladesh economy particularly on the agriculture sector; and 5. To suggest some negotiating strategies for Bangladesh to be pursued in the ongoing WTO negotiations on agriculture.

Methodology:

The Revised Draft Modalities (December 2008) has five sections and fourteen annexes. Five sections are: Domestic support (Section I), market access (Section II), export competition (Section III), monitoring and surveillance (Section IV) and other issues (Section V). Annex A provides product-specific blue box limits of the United States. Annex B includes proposed amendments on Annex 2 of AoA. Annex C provides basis for the calculation of tariff quota expansion. Annex D provides tariff escalation list. Annex E is on tariff quota underfill mechanism. Annex F provides an illustrative list of indicators for the designation of special products. Annex G includes list of tropical and alternative products. Annex H provides an indicative list of preference erosion products. Annex I deals with small and vulnerable economies. Annex J is on export credits, export credit guarantees or insurance programmes. Annex K deals with agricultural exporting state trading enterprises. Annex L deals with the issue of international food aid. Annex M is on the monitoring and surveillance issue. Annex N describes the tariff simplification methodology. The new draft has seven attachments also. The Revised Draft Modalities on Agriculture deals with domestic support. Proposals on different issues pertaining to domestic support are described under seven sub-sections: * Overall reduction of trade?distorting domestic support: A tiered formula; * Final bound total aggregate measurement of support (AMS): A tiered formula; * Product?specific AMS limits; * De minimis; * Blue box; * Green box; and * Cotton: Domestic support. The developed country Members with high relative levels of final bound total AMS (at least 40 percent of the total value of agricultural production) will undertake an additional effort in the form of a higher cut than would otherwise be applicable for the relevant tier. For the developed country Members, reduction in final bound total AMS will be implemented in six steps over five years. Reduction in the final bound total AMS applicable to the developing country Members will be two?thirds of the reduction applicable for developed country Members. NFIDCs and recently acceded Members with economies in transition will not be required to undertake reductions in the final bound total AMS. the Revised Draft Modalities on Agriculture deals with market access-related issues. Proposals on different issues pertaining to market access are described under seven sub?sections: * Tiered formula for tariff reductions; * Sensitive products; * Other Issues; * Special and differential treatment; * Least developed countries; *Cotton market access; and * Small and vulnerable economies.

Source of Information: CPD Occasional Paper Series 85

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Negotiating proposals put forward through the current Revised Draft Modalities on Agriculture have important implications for Bangladesh agriculture. These proposals are likely to create net loss in economic welfare but production and export of some commodities will increase. It is expected that exports of livestock, sheep meat, bovine meat, poultry, hides and skins, banana, other tropical fruits (watermelon, melons, pineapples, papaya), tomatoes, roots and tubers (potato, radish, carrot, taro (kachu), stolon of taro (kachur lati)) and tea will be increased. On the other hand, average international price of agricultural commodities may increase by about five percent which might adversely affect Bangladesh and other net food-importing countries. In recent times, food security of Bangladesh and other net food-importing countries have also been threatened by export restrictions imposed by different food-exporting countries. To mitigate such adversity Bangladesh should pursue the demands of the Dar es Salam Declaration which categorically demanded that “no non?LDC Member shall apply any export restriction on food items imported by any LDC”. Bangladesh should also demand unconditional food aid for LDCs so that they are compensated for the negative shocks on their food security. The present study also shows that Bangladesh may be benefited through duty?free and quota-free (DF?QF) export of various agricultural products identified in this paper at HS 6?digit level. We should strengthen our negotiation capacity to include these products under DF?QF facility to ensure market access for these agricultural products in the USA. However, market access alone would not deliver the desired results. The country will face some challenges such as lack of supply-side capacity to exploit the opportunities. To this end, Bangladesh must have to take a more proactive interest also in other ongoing WTO negotiations such as trade-related intellectual property rights (TRIPS), trade-related investment measures (TRIMS), sanitary and phytosanitary measures (SPS), fisheries subsidies, and Aid for Trade. We should demand for support under “Aid for Trade” particularly in the areas of market information, human resource development, and development of facilities and systems for compliance with SPS requirements in developed countries especially in case of exports of shrimp and other agricultural commodities. In accelerating our exports, we would also require to design appropriate fiscal and monetary incentives to stimulate investment and production in the country. The establishment of SPS compliant facilities and certification system for exporting and importing agro?commodities, and enacting laws for the preservation of biodiversity and community knowledge, plant variety protection act will be necessary.

Knowledge Management: Report/Proceedings