Doha Round negotiations on the green box, and beyond[1]
Jonathan Hepburn and Christophe Bellmann
Introduction
The WTO Doha Round negotiations on green box subsidies[1] were widely seen as having ‘stabilised’ by mid-2008, meaning that, after a long period of fine-tuning, the compromise language proposed by the chair was being viewed by many as a realistic basis for agreement. While some countries may still have specific concerns with particular elements, a broad consensus on the modifications to be made had emerged.
For much of 2007 and 2008, negotiators had focused primarily on a limited number of issues, with particular attention being devoted to defining the exceptional circumstances under which governments might be allowed to update the ‘fixed and unchanging’ base periods they use to determine the amount of direct payments they provide to their producers. However, as recently as 2006, Members were concerned about a far wider array of issues, many of which have not found reflection in the likely Doha outcome. The draft ‘modalities’ text circulated that year by the chair of the agriculture negotiations bears witness to the heterogeneity of demands for reform that were on the table. While many negotiators admit that their country has decided to drop some of these proposals in the interests of obtaining a Doha Round agreement, there is reason to believe that many of the underlying concerns remain.
Further back still, a wide range of ideas, concerns and proposals were discussed by Members. The ‘overview’ document[2] prepared in December 2002 by the chair of the agriculture negotiations includes a summary of Members’ proposals and statements on the green box, and gives some idea of the breadth of issues that were under consideration at that time. The document indicates that Members had put forward numerous proposals that did not find their way into subsequent draft modalities documents circulated by the chairs of the agriculture negotiations: these included, for example, various proposals for capping, reducing or eliminating different kinds of green box support; expanding the green box to include ‘non-trade concerns’ such as animal welfare; or allowing developing countries to include support to products representing less than a certain percentage of world trade.
However, it is conceivable that countries and negotiating groups may at some future point decide to raise issues that were set aside early in the negotiations. These could for example be brought up again either in a subsequent round of multilateral trade talks, or as part of a ‘built-in agenda’ of negotiations aimed at continuing a process that would achieve the ‘long-term objective’ of agricultural trade reform. An assessment of the recent negotiating history on the green box can therefore provide a guide to some of the issues that may yet resurface in future talks.
Negotiating mandates
The immediate negotiating mandate for work on the green box in the Doha Round was provided by paragraph 16 of the July 2004 Framework, WT/L/579. This specified that:
"Green Box criteria will be reviewed and clarified with a view to ensuring that Green Box measures have no, or at most minimal, trade-distorting effects or effects on production. Such a review and clarification will need to ensure that the basic concepts, principles and effectiveness of the Green Box remain and take due account of non-trade concerns. The improved obligations for monitoring and surveillance of all new disciplines foreshadowed in paragraph 48 below will be particularly important with respect to the Green Box."
The mandate therefore aims to ensure, amongst other things, that green box measures conform to the ‘fundamental requirement’ set out in paragraph one of the Agreement on Agriculture[3].
At the Hong Kong Ministerial in December 2005, Ministers then added that this review should ensure that developing country programmes were also effectively covered by the criteria[4]:
"... Green Box criteria will be reviewed in line with paragraph 16 of the Framework, inter alia, to ensure that programmes of developing country Members that cause not more than minimal trade-distortion are effectively covered."
However, in the period prior to the agreement on the July 2004 Framework, Members had already circulated a number of formal proposals and other informal submissions on the green box. While there was no explicit mandate for work on the green box in the 2001 Doha Declaration that launched the current trade round, Members did agree to “substantial reductions in trade-distorting support”; that “special and differential treatment for developing countries shall be an integral part of all elements of the negotiations”; and that “non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture”. The early proposals on green box support presumably were intended to contribute towards the achievement of some or all of these objectives.
The Doha Declaration also “recognises” the work undertaken in the ‘built-in agenda’ of negotiations under Article 20 of the Agreement on Agriculture[5], “including the large number of negotiating proposals” submitted by Members. Many of these related to the green box. Even before the 1999 Seattle Ministerial, numerous proposals on the green box had already been tabled, and at Members’ request were summarised in an October 2000 Secretariat document[6].
Political dynamics and coalitions
The specific negotiating priorities of different WTO Members, as well as the coalitions in which they have chosen to pursue them, have changed over the course of the Doha Round and in the years leading up to its launch. While there are inevitably risks in attempting a simplified description of political trends and groupings, a number of broad contours can nonetheless be defined (see table 1, below).
Table 1: Main focus of proposals on the green box:
Tighten disciplines to ensure no trade-distorting effects / Substantial new flexibility for developing countries / Revise some provisions to reflect implementation experience / Expand flexibility to reflect new ‘non-trade concerns’G-10 / x
EU / x
US / x
Canada / x / x
Cairns Group / x / x
G-20 / x / x
Developing country like-minded group / x / x
African Group / x / x
Efficient agricultural exporters such as those in the Cairns Group have expressed concerns about the extent to which green box programmes may be causing more than minimal distortion to production and trade, and the possibility that existing green box criteria may need to be tightened in order to ensure consistency with the fundamental requirement set out in paragraph 1. A number of developing countries have also expressed similar concerns, with the G-20 in particular emphasising these after its formation in 2003. Both the Cairns Group and the G-20 have historically sought to establish a cap or reductions on green box subsidies.
In contrast, members of the import-sensitive G-10 group of countries, which includes Japan, Norway and Switzerland, have argued that there is only a limited mandate for changes to the green box. They have emphasised the role of green box programmes in addressing countries’ ‘non-trade concerns’, and have argued that agriculture has a ‘multifunctional’ role in delivering other public goods in parallel.
The EU and US have also resisted substantial reform of the green box. The EU has taken positions that are close to those espoused by the G-10, in the past suggesting that, if anything, the green box should be expanded in order to take into account issues such as animal welfare. Like Canada, however, the US has supported modest changes to the green box to cover, for example, experience with implementing disaster relief programmes.
A number of developing countries, including G-20 members and the African Group, have consistently underscored the need for the green box to be amended so as better to reflect developing countries’ concerns. Many have argued that the green box, in the form in which it was devised during the Uruguay Round, primarily reflects developed country programmes and is therefore ill suited for developing countries to use. They have pushed for specific changes to rectify what they see as imbalances in the existing text.
Broadly speaking, the resistance of importing countries to many of the more far-reaching proposals put forward by exporting countries, combined with the resistance of the latter to any dramatic expansion of the green box to address additional ‘non-trade concerns’, has meant that the negotiations have in the end focused relatively heavily on modifications aimed at providing greater flexibility to developing countries.
Likely outcomes of the green box negotiations
The July 2008 draft modalities text provides a fairly good idea of what the ultimate outcome of the green box ‘review and clarification’ can probably be expected to entail, assuming that no new issues are introduced at this stage in the negotiations. Five major areas can be identified:
1. a new sub-paragraph 2(h) on ‘general services’ covering an additional set of developing country policies and services;
2. under paragraphs 3 and 4 on public stockholding for food security and domestic food aid, developing countries would be granted additional flexibility for purchases from low-income and resource-poor producers;
3. detailed language on the exceptional circumstances in which otherwise ‘fixed and unchanging’ base periods can be updated for decoupled income support, investment aids and regional assistance programmes (paragraphs 6, 11 and 13), plus explicit provisions for Members wishing to establish new programmes under these categories;
4. a longer time period used to assess maximum allowable levels of compensation for disaster relief (paragraph 8), as well as additional flexibility for developing countries, and specific new criteria covering crop insurance schemes and compensation for crops or animals that are destroyed to control pests or disease;
5. for developing countries only, an exemption from the requirement in paragraph 13 that disadvantaged regions must form a contiguous geographical area in order to qualify for assistance.
The countries or groups that originally proposed the changes that the chair has included can be quite easily identified. The possible new subparagraph 2(h) draws essentially on language put forward by the G-20 and the African Group, while the modifications to the text on domestic food aid and public stockholding for food security incorporate proposals made by the G-20. The G-20 had also called for developing countries to be exempt from the requirement in paragraph 13, a change subsequently supported by the African Group and the US.
The G-20, Cairns Group and Canada had proposed that base periods be “fixed and unchanging”, while other Members such as the EU and Switzerland reportedly made informal proposals clarifying when exceptional updates could be made. The new language on disaster relief incorporates changes proposed mainly by the US and Canada, with some flexibilities proposed by the African Group.
Evolution of the negotiations
Although a number of proposals had already been made in the run-up to the 1999 Seattle Ministerial conference[7], negotiations began in earnest in 2000 under the mandate of article 20 of the Agreement on Agriculture. A large number of formal proposals were tabled that year[8] on the green box, with many more in 2001[9] and 2002[10]. While for the most part countries staked out their initial positions in the first two years, the launch of the Doha Round in November 2001 led to a number of more detailed drafting proposals being made the following year.
The circulation of draft texts by the chair of the agriculture talks, Stuart Harbinson, was a significant first attempt to define possible common ground between Members, ahead of the initial March 2003 deadline for agreement on modalities. Later that year, the emergence of the G-20 in response to a joint EU-US proposal can be seen as a ‘tectonic shift’ in the negotiations that irrevocably changed the geopolitical landscape of the round. Green box issues seem not to have been examined again in much detail until 2005: mandates in the 2004 July Framework and the Hong Kong Declaration guided subsequent discussions, which picked up again in 2006 with further submissions from key players.
Most recently, the various iterations of Crawford Falconer’s draft modalities text have narrowed the focus of the negotiations to a handful of issues, of which the question of base period updates has dominated. While a limited number of G-20 and Cairns Group proposals to tighten green box criteria were still included in the 2006 draft, subsequent revisions dropped these for the most part. Figure 1 below summarises the evolution of the negotiations.
Figure 1: Timeline of green box negotiations
July / Modalities draft (TN/AG/W/4/Rev3)
May / Modalities draft (TN/AG/W/4/Rev2)
Feb / Modalities draft (TN/AG/W/4/Rev1)
2007 / Aug / Modalities draft (TN/AG/W/4)
May / Challenges paper 2
2006 / June / Modalities draft (TN/AG/W/3)
G-20 (JOB(06)/145) / May / Reference paper rev1
African Group (TN/AG/GEN/15); US (JOB(06)/80) / Apr / Reference paper
G-10 (JOB(06)/12) / Jan
2005 / Dec / Hong Kong Declaration (WT/MIN(05)/DEC)
US; EU / Oct
Aug / Groser status rpt (TN/AG/19)
G-20 / June
Canada / May
2004 / Aug / July Framework (WT/L/579)
AU-ACP-LDC (WT/MIN(03)/W/17);
Jamaica (WT/MIN(03)/W/11);
G-20 (JOB(03)/162 + Rev.1, WT/MIN(03)/W/6+Add.1 and 2) / 2003 / Sept / Derbez draft text (JOB(03)/150/Rev.2)
Kenya (JOB(03)/175); Norway (JOB(03)/169);
Bulgaria, Chinese Taipei, Iceland, Korea, Liechtenstein and Switzerland (JOB(03)/167);
Japan (JOB(03)/165); African Group (TN/AG/GEN/8);
EU-US (JOB(03)/157) / Aug / Perez del Castillo / Supachai draft (JOB(03)/150/Rev.1)
Mar / Harbinson text rev1 (TN/AG/W/1/Rev.1)
Switzerland (JOB(03)/37); EU (JOB(03)/12) / Feb / Harbinson text (TN/AG/W/1)
2002 / Dec / Chair’s Overview (TN/AG/6)
African Group (JOB(02)/187);
Developing country ‘like minded group’ (G/AG/NG/W/14);
Kyrgyz Republic (JOB(02)/179);
Norway (JOB(02)/165); Japan (JOB(02)/164) / Nov
Canada (JOB(02)/131); Cairns (JOB(02)/132) / Oct
China (JOB(02)/104); Philippines (JOB(02)/111);
Korea (JOB(02)/125); Chinese Taipei (JOB(02)/126);
Canada (JOB(02)/127) / Sept
2001 / Nov / Doha Declaration (WT/MIN(01)/DEC/1)
Namibia (G/AG/NG/W/143);
African Group (G/AG/NG/W/142);
Jordan (G/AG/NG/W/140); Mexico (G/AG/NG/W/138); / Mar
Turkey (G/AG/NG/W/106); Morocco (G/AG/NG/W/105) / Feb
India (G/AG/NG/W/102);
Korea (G/AG/NG/W/98); Norway (G/AG/NG/W/101) / Jan
Canada (G/AG/NG/W/92); Japan (G/AG/NG/W/91); Switzerland (G/AG/NG/W/94); EU (G/AG/NG/W/90) / 2000 / Dec
ASEAN (G/AG/NG/W/55);
Transition countries (G/AG/NG/W/56) / Nov
Oct / Secretariat summary of proposals (G/AG/NG/S/18)
Cairns Group (G/AG/NG/W/35) / Sept
Developing country ‘like minded group’ (G/AG/NG/W/14) / Jun
Countries stake out initial positions