Agriculture in WTO Negotiations

Publication Date: September 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

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Abstract:

The World Trade Organization's (WTO) fifth ministerial conference (held September 10-14, 2003 in Cancun, Mexico) ended without an agreement on a framework for continuing multilateral negotiations on agricultural trade liberalization. The inconclusive end of the Cancun ministerial places in doubt the ability of WTO member countries to complete the current round of negotiations by the scheduled January 1, 2005 deadline.

WTO member countries launched this new round of multilateral trade negotiations in November 2001 at the WTO's fourth ministerial conference in Doha, Qatar. Because of its emphasis on integrating developing countries into the global trading system, the round is called the Doha Development Agenda (DDA). The new round incorporates agriculture into a comprehensive framework that includes negotiations on industrial tariffs, services, dispute settlement, and other trade issues. The ambitious agenda for agricultural trade liberalization calls for substantially improving market access, reducing and phasing out export subsidies, and substantially reducing trade-distorting domestic support.

While the United States and the EU reached agreement on a broad framework for negotiating agricultural trade liberalization before the Cancun meeting, a group of developing countries, the G-22 which includes Brazil, China, India, and South Africa, among others, made a counter-proposal which makes fewer demands on developing countries than the EU-U.S. framework. The Chairman of the Cancun ministerial circulated a draft declaration at the meeting that attempted to reconcile differences between developed and developing countries on the agricultural issues. Neither the proposals made by the United States and the EU and the G-22 nor the Chairman's draft declaration propose specific modalities (formulas, targets, or timetables) for reducing tariffs and trade-distorting support and for phasing out export subsidies.

WTO meetings are scheduled to continue, beginning with an agriculture negotiating group meeting in October and ending with a senior level stock taking in December 2003. Amid considerable uncertainty about prospects for completing the round, WTO members, including the United States, the EU, the G-21 and other countries, are taking stock and considering options for concluding the round. U.S. trade officials also have indicated they will be focusing attention on bilateral and regional trade negotiations.

Much of U.S. agriculture would benefit from further multilateral trade liberalization, but some U.S. products might face stiffer foreign competition at home or in third-country markets. DDA negotiations, if they result in new commitments to reduce trade-distorting domestic support or export subsidies, also could affect U.S. farm programs authorized in the 2002 farm bill (P.L. 107-171). Any agreements reached in the new round would be taken up by Congress under fast-track procedures for legislation to implement trade agreements as spelled out in the Trade Act of 2002 (P.L. 107-210). This report will be updated periodically.