HISTORICAL CONTEXT OF AGRICULTURAL DEVELOPMENT - Science for Agriculture and Rural Development in Low-income Countries - page 15

be reached with respect to the degree and timing of moving away from trade-

distorting support, (iii) market access , where the main issue yet to be resolved is the
type of tariff reduction formula to be used.
The WTO Ministerial Meeting in Hong Kong made some progress in advancing
the Doha Development Agenda. But much remains to be done, particularly in
settling negotiating modalities in agriculture and NAMA and in putting some flesh
onto the bones of the GATS (General Agreement on Trade in Services). And where
progress was made it was qualified, whether in dealing with the concerns of African
cotton producers or in improving market access for the products of the least-
developed countries. Given the work still to do, it is not guaranteed that new dead-
lines will be met or that the DDA (Doha Development Agenda) will be concluded
on time. There is much at stake should the momentum of multi-lateral liberalization
stall; analysis at the OECD (Organization for Economic Cooperation and Develop-
ment) points to the risk of both major opportunities forgone and of systemic strains
to the multi-lateral trading framework. Developing countries would be among the
principal losers. Charting the way ahead will require that trade policy be seen in a
broader domestic context which recognizes that market opening works best when it
is backed by sound macro-economic policies, flexible labour markets, a culture of
competition and strong institutions. Through this lens, trade reform can be promoted
as a necessary tool of growth and development rather than as a concession paid to
others.
In agriculture , some progress was made under all three pillars of sustainability.
In market access, the revised ministerial text formalizes the 'working hypothesis' on
structuring Members' tariffs for reduction within four bands, with bigger cuts on
higher tariffs. On domestic support, the text confirms the 'working hypothesis' that
the Aggregate Measure of Support would be classified in three bands.
The EU will be in the top band, facing the highest linear tariff cuts, the US and
Japan in the middle and everyone else in the bottom band. Notably, the text specifies
explicitly the necessary overall cuts in trade-distorting domestic support, to make it
more difficult for countries to simply re-classify subsidies in order to dodge
reduction commitments. And for export competition, the text calls for the “parallel
elimination of all forms of export subsidies and disciplines on all export measures
with equivalent effect” by the end of 2013, with a substantial part of the elimination
to be realized by the end of the first half of the implementation period.
Cotton was for many the litmus test of success in Hong Kong. Here, agreement
was reached that developed countries will give duty-free and quota-free access to
least-developed country exports as of the conclusion of Doha Round negotiations.
Developed countries (i.e., the US) will eliminate export subsidies in 2006. The text
also provides for faster and deeper reductions in trade-distorting domestic subsidies
to cotton than those that will be achieved through the general schedules for domestic
farm subsidies.
In NAMA, the text provides for bigger cuts for higher tariffs. Importantly, the
text links the level of ambition for agriculture and NAMA, specifying that this
ambition is to be achieved in a balanced and proportionate manner consistent with
the principle of special and differential treatment. And, in a key element of the
development package, agreement was reached on the principle that developed