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Wednesday, February 9, 2011

WTO Doha Round: Implications for U.S. Agriculture

Randy Schnepf
Specialist in Agricultural Policy

Charles E. Hanrahan
Senior Specialist in Agricultural Policy

The Doha Round of multilateral trade negotiations, launched in November 2001, is now in its 10th year. The goal of the agriculture negotiations is to make progress simultaneously across the three pillars of the World Trade Organization’s (WTO’s) 1994 Agricultural Agreement—domestic support, market access, and export competition—by building on the specific terms and conditions established during the previous Uruguay Round of negotiations. Negotiators are aiming to restrict the use of domestic and export subsidies, while expanding market access for farm products among all WTO member countries. However, as a concession to poorer WTO member countries, the degree of new conditions is to be less stringent for developing than for developed nations.

By early 2008, substantial progress had been made in the Doha Round negotiations in narrowing or resolving differences in negotiating positions. As a result, a WTO Ministerial Conference was held in Geneva during July 21-29, 2008, in hopes of resolving the remaining differences. However, the Ministerial failed to narrow the gap on the most contentious issues.

To revive the negotiations before momentum was lost, the chair of the WTO’s Committee on Agriculture released a draft text in December 2008, referred to as a “modalities framework” (i.e., specific formulas and timetables for reducing trade-distorting farm support, tariffs, and export subsidies, and for opening import markets). The draft modalities framework summarized the current mutually agreed changes to existing disciplines, as well as highlighting the areas of disagreement. As such, the 2008 modalities draft was an attempt to lock in the status of current negotiated concessions, while adding detail to outstanding issues and providing a basis for further, more specific talks.

Doha Round negotiations proved inconclusive in 2009. In 2010, however, the chair of the agriculture negotiating group reported that progress had been made in narrowing outstanding differences to a short list of highly contentious issues including designating additional products as sensitive coupled with establishing new tariff quotas, designating developing country products as special and thus exempt from tariff reductions, and allowing developing countries to raise tariffs temporarily to deal with import surges or price declines. During 2009 and 2010, U.S. trade negotiators, members of Congress, and commodity groups have expressed concern that the draft modalities included too many exceptions for foreign importers to ensure that an adequate balance could be achieved between U.S. domestic policy concessions and potential U.S. export gains.

To address the outstanding issues, the U.S. Trade Representative, Ambassador Kirk, has insisted that the multilateral negotiations in the Doha Round be supplemented with sustained direct bilateral engagement on agriculture and other negotiating areas, especially with such economically advanced “developing countries” as Brazil, India, China, and South Africa. As negotiations get underway in 2011, the WTO Director-General has called for accelerating the pace of bilateral talks so that a multilateral agreement could be reached in 2011, and legal texts could be submitted to WTO member country governments for approval in 2012.

This report reviews the current status of agricultural negotiations for domestic support, market access, and export subsidies, and the potential implications of a Doha Round agreement for U.S. agriculture.

Date of Report: February 2, 2011
Number of Pages: 13
Order Number: RS22927
Price: $29.95

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