The Doha Round Bali ‘mini-package’ in agriculture

In the previous post, I discussed the process leading up to the forthcoming Bali Ministerial Conference of the WTO and the prospects for progress on a Doha Round ‘mini-package’. This ‘mini-package’ is planned to consist of three components: trade facilitation, some development/LDC issues and some agricultural elements (with the possibility of including other elements such as the dispute settlement review and the Information Technology Agreement if progress allows). In this post I discuss the issues being negotiated as part of the agricultural strand of this package.
The agricultural consultations have focused around three proposals tabled so far:
• a G-20 non paper which proposes an understanding on tariff rate quota (TRQ) administration provisions.

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Prospects for a Doha Round mini-package at Bali this year

With Brussels and national capitals closed for the month of August so little happening on the CAP front, it is timely for a stock-taking of the state of play in the multilateral trade negotiations.
In December later this year, the WTO at its 9th WTO Ministerial Conference in Bali, Indonesia will make yet another effort to salvage some concrete deliverables from the tortuous Doha Round negotiations. The negotiations have proceeded in fits and starts, but with more fits than starts, since the cancellation of what should have been the 7th Ministerial Conference (MC) in Geneva in December 2008 following the failure to agree on revised modalities documents.

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Intervention arrangements in the new CAP

Growing price volatility on agricultural markets has renewed focus on the role of market support instruments. In successive CAP reforms, the role of market instruments has changed from essentially determining the market price received by producers to providing a market safety net. Intervention prices are set at low levels which ensure that they are only used in times of real crisis.

The graph below illustrates the extent of support price reductions which have taken place for different sectors. These price cuts allowed the drastic decrease of public stocks in the EU between the early 1990s and recent years, which has in turn reduced the budget pressure stemming from overproduction.

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CAP reform implementation consultations begin

The most defining characteristic of the political agreement reached on CAP reform in June 2013 in hindsight may not be the greening of Pillar 1 payments or the move towards greater ‘fairness’ in the CAP as a result of external and internal convergence, but rather the re-nationalisation of some aspects of agricultural policy with the devolution of much greater flexibility to member states in how the new CAP can be implemented.
This flexibility may be seen as a consequence of trying to manage a single CAP in an increasingly heterogeneous agricultural landscape in Europe following successive enlargements to an EU of 28 member countries.
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