Recent Developments in WTO Negotiations on Agriculture
and Position of Turkey
Burhan ÖZALP1* M. Necat ÖREN1
1Cukurova University Department of Agricultural Economics Sarıçam-ADANA/TURKEY *Corresponding author: bozalp@cu.edu.tr
Abstract
Last conference of negotiations on agriculture was held in Bali, in December 2013. During the negotiations on agriculture, a great deal of discussion has been made about reduction of tariffs, reducing domestic supports and elimination of export subsidies, however, a final agreement was not reached. Despite this fact, some decisions was made during the negotiations such as reduction/removal of export subsidies, development of sensitive and special product concepts against adverse effects of reductions in tariffs, reduction in domestic supports in developed countries to a significant extent. These developments are also important in terms of position adopted by Turkey in negotiations on agriculture. Turkey has been protecting its agriculture considerably via tariffs. Bound and applied tariff rates are 61.0 % and 41.2% in agricultural products of Turkey. For this reason, position adopted and to be adopted by Turkey in the negotiations is important. Tariff rates applied by Turkey for animal and dairy products are over % 100. Therefore, issue of sensitive and special products is very important for Turkey. Turkey has no obligation about domestic supports but if a position is adopted in the negotiations towards substantial decreases in developed countries, this can increase chances of competition in international markets for Turkey. Export subsidies of Turkey are at a negligible level. However, if developed countries eliminate their export subsidies, Turkey can get a set of gains for its import products in long run. This study evaluates Turkey's position in negotiations on agriculture and reflections of decisions taken during the negotiations on turkey's agriculture and agricultural policies. Furthermore it also makes some suggestions for Turkey for not being affected adversely and even getting some gains from the process.
Keywords: WTO, negotiations on agriculture, Turkey, agricultural policies Introduction
Agriculutural negotiations were incorporated in the Doha Development Round (DDR) started in 2001. In conferences that have been made within agricultural negotiations, though discussions were made among groups representing developed countries and developing countries-least developed countries. Because developing and least developed countries have regarded agriculture as an important sector for development. Therefore, they have insisted that developed countries cover their demands. But developed countries acted unwillingly to cover those demands. This prevented that final deal is formed in negotiations. In spite of problems which occurred in negotiations, negotiations were kept alive anywise to complete DDR. Decisions taken in Bali conference in December 2013 have pointed at this situation.
Agricultural Negotiations from 2001 to 2013
After DDR had started, discussions in negotiations intensified with draft modalities that were proposed by Stuart Harbinson in 2003. These draft modalities were criticised intensely by the EU supporting multifunctionalty of agriculture and the USA supporting liberasition of agriculture. So, the EU and the USA tabled a joint framework paper 4 weeks ahead of the Cancun Ministreal. Following the presentation of the joint framework, a new coalition of developing countries called the G-20 rised and tabled a framework paper containing their proposals (Baracuhy, 2011; Aggarwal, 2005). Thus, the G-20 joined into negotiations as an important third force and this situtiation have continued during the negotiations. In addition, in Cancun, “Cotton Initiative” consisting of especially Benin, Çad, Burkina Faso, Mali came out against the policies of developed countries, particularly the USA, about cotton subsidies. Because economies of Benin, Çad, Burkina Faso, Mali rely on cotton and cotton subsidies of developed countries reduced the world cotton prices (Işın, 2005). These conflicts led to the collapse of the Cancun Ministerial Conference. After Cancun, it has emerged that the EU and the USA need to concern particularly the G-20 as a powerful party in the negotiations (Anania ve Bureau, 2005; Aggarwal, 2005).
82 25th International Scientific-Experts Congress on Agriculture and Food Industry - Izmir 2014
Dialog that lost with Cancun was recreated by the EU and the USA. Thus, Geneva Conference was made in 2004 and July Framework which was decided to implement with 2005 Hong Kong Conference was signed. Regulations related to market access, export subsidies and domestic supports were specified in July Framework. Besides, due to the problems related to cotton it was decided that cotton committee should be established (Acar, 2006). In 2005 Hong Kong Conference, positive atmosphere which emerged with 2004 July Framework deteriorated. Conference fell short of expectiations and deadline was determined as 30 April 2006 to conclude modalities that were to implement (Baracuhy, 2011; Clapp, 2006; Wilkonson, 2006). But, since modalities could not be concluded in 30 April 2006, negotiations were officially suspended by Director-General Pascal Lamy in 24 July 2006 (Baracuhy, 2011). Following the July 2006 suspension, several WTO country groups such as the G-20 and the Cairns Group of agricultural exporters met to lay the groundwork to restart the negotiations. While these meeting did not yield any breakthrough, Lamy announced the talks that were back in “full negotiating mode” on January 31, 2007. In July 2007, WTO Agriculture committee chairman Crawford Falconer submitted a draft modality paper to address the divergent negotiating positions of the parties (Ferguson, 2008). After meetings and discussions made on the Falconer’s draft modality paper, last version was formed. The last version of the paper was the basis for the July 2008 Geneva Confererence and some new regulations were made on market access, export subsidies and domestic supports in 2008 Geneva Confererence. But, 2008 global financial crisis prevented implementation of decisions. The leaders of the global G-20 met in Washington in November 2008 and protectionism loomed on the horizon. The US became even more averse to trade liberalization—except of course in areas in which it still felt competitive (Baracuhy, 2011; Ferguson, 2008).
There was no any progression in 2009 and 2011 Geneva Conferences. Hence, negotiations deadlocked before Bali Conference (ICTSD, 2013). Since DDR negotiations announced in 2001 were not concluded positively, Bali Conference was made in a period when efficiency of WTO in global trade relationship was interrogated. As members realized that DDR were not to complete in the soonest time and the 2008 global crisis could not be overcome completely, Expectations from Bali Conference were kept at the minimum level. So, it was projected that some matured issues were presented as “early harvest” (Aran, 2013). The assumption behind the ‘early harvest’ initiative is that there are a number of negotiating issues which are potentially seen as ‘win-win’ issues for all members, so that they can be carved out of the overall negotiations without materially affecting the intricate balance of gains and concessions represented by the draft modalities texts (Matthews, 2013). Agriculture once again appeared as a major area of engagement for the WTO Members in the run-up to the Bali Ministerial. The issues currently under discussion were raised by the two developing country formations, G-33 and G-20. While the G-33 raised issues that were focused on furthering the objectives of food security and rural livelihoods, which formed the core demands of this group, the G-20 argued for the introduction of measures that would enhance the effectiveness of the disciplines in the areas of export competition and tariff quota administration (Dhar and Kishore, 2013). A final agreement was not reached in Bali Conference and instead of it “Bali Package” which would revive deadlocked negotiations after 2008 Geneva Conference was approved. Bali Package included decisions related to acception of Yemen as a new member, trade facilitation, agriculture and cotton, development and LDC issues. Additionally, decisions under agriculture topic were general services, public stockholding for food security purposes, tariff rate quota administration, export competition (WTO, 2014/a).
Decisions taken in the agricultural negotiations could be summarized like that: Market Access; making the highest reduction of the highest tariff rates, determination of special and sensetive products for each countries, providing ease of market access for LDC’s producing cotton. Export subsidies; elimination of all forms of export subsidies in the end of 2013 for
25th International Scientific-Experts Congress on Agriculture and Food Industry - Izmir 2014 83
developed countries1 (2016 for developing countries), elemination of impacts of agricultural exporting state trading enterprises on trade and production, not to be commercial of international food aid. Domestic support; significant reductions in overall trade-distorting domestic support, considerable cut for members having high domestic support, non-exceedence % 2.5 (% 5 for developing countries) of the average total value of agricultural production for blue box payments.
Position of Turkey in Agricultural Negotiations
Position of Turkey in agriculture negotiations could discuss in two parts. First is Turkey’s proposal paper presented to WTO when the DDR started. Second is Turkey’s attitude exhibited during the DDR. When first one analysed in detail, we could see that since either Turkey have protected her agriculture considerably via tariffs or her export subsidies are at a negligible level and Turkey has not any obligation about domestic supports, Turkey concentrated her efforts on market access. At second one, it is hard to say that Turkey had sue generis policies in negotiations. Turkey did not make sufficient preparation for negotiations. Due to the membership process of the EU, it can be said that Turkey have exhibited attitude tied to the EU during the DDR. On the other hand, Turkey tried to benefit privileges provided to developing countries and in this issue Turkey liaised with the G-33. Besides, Turkey have concentrated her efforts on market access during the DDR (Anonymous, 2014; Anonymous, 2010; İmir, 2008; WTO, 2001). One final thing, it can be said that Turkey supported decisions taken in Bali Conference because Turkey’s employment rate is nearly 24 % in agriculture and especially due to a member of the G-33, Turkey cared about food security issue and Turkey responded positively developments in Bali Conference (Özatay, 2013).
Turkey’s bound and applied tariff rates are 61.0 % and 41.2 % in agricultural products of Turkey. For this reason, Turkey would be adversely affected from tariff reductions. So, position adopted and to be adopted by Turkey in the negotiations is important. It could be clearly seen when we examined Turkey’s tariff rates in agricultural product groups: Animal products (132.8 %, 110.0 %)2, dairy products (169.8 %, 129.3 %), sugars and confectionery (107.3 %, 81.9 %) (WTO, 2014/b). Moreover, pruducts such as wheat, sugar beet and tea that Turkey is sixth with 5 % in the world tea production would be adversely affected from tariff reductions (Şahinöz ve ark., 2007; Kıymaz, 2008; İmir; 2008; FAO, 2014). Therefore, Turkey would better strive towards incorporating them into sensitive and special products category. Further, that Turkey’s export subsidies are at a negligible level and there is no any obligation about domestic supports don’t trivialise export subsidies and domestic support issues in terms of Turkey. Because, that substantial decreases of domestic supports provided by developed countries can create opportunities for Turkey in international competition.
Conclusion
During the negotiations on agriculture, a great deal of discussion has been made about reduction of tariffs, reducing domestic supports and elimination of export subsidies, however, a final agreement was not reached. Despite this fact, some decisions were made during the negotiations such as reduction/removal of export subsidies, development of sensitive and special product concepts against adverse effects of reductions in tariffs, reduction in domestic supports in developed countries to a significant extent. Final agreement has not reached since conflicts between developed countries and developing countries-least developed countries have continued and the 2008 global crisis could not be overcome completely. It can be said that successful conclusion of negotiations depends on meeting the demands of developing countries and least
1
But this decision could not implement. Regret about this subject was mentioned in decisions taken Bali Conference and elimination of export subsidies was reaffirmed as a commitment.
84 25th International Scientific-Experts Congress on Agriculture and Food Industry - Izmir 2014
developing countries. There is a trend towards liberalization in world agricultural trade under the leadership of WTO. It was concluded that Turkey should try to acquire privileges on market access and insist on that developed countries should decrease domestic supports and abolish export subsidies by recognizing WTO reality instead of having a position tied to EU.
References
Acar, M. 2006. DTÖ ve AB Işığında Türk Tarımının Geleceği, Orion Yayınevi, Ankara, p.278
Aggarwal, R. 2005. Dynamics of Agriculture Negotiations in the World Trade Organization, Journal of World Trade 39(4) 2005: pp.741-761.
http://jpkc.zzu.edu.cn/esjmyzzf/ebook/lw/Dynamics_of_Agriculture_Negotiations_in_the_WTO.pdf, Accessed: July 2013.
Anonymous. 2010. http://www.tobb.org.tr/DisTicaretMudurlugu/Documents/Duyurular/doha.pdf, Accessed: February 2013.
Anonymous. 2014. Çok Taraflı Ticaret Müzakereleri,
http://www.ekonomi.gov.tr/index.cfm?sayfa=78AFBB2E-19DB-2C7D-3D25C0E477E9BCFD, Accessed: August 2014.
Anania, G., Bureau, J., C. 2005. The negotiations on agriculture in the Doha Development Agenda Round: current status and future prospects, European Review of Agricultural Economics Vol 32 (4) (2005) p.539–574 http://erae.oxfordjournals.org/content/32/4/539.full.pdf+html, Accessed: February 2013.
Aran, B. 2013. Dünya Ticaret Örgütü Bali Konferansına İlişkin Beklentiler ve Türkiye, www.tepav.org.tr, Accessed: December 2013.
Baracuhy, B. 2011. Rising Powers, Reforming Challenges: Negotiating Agriculture in the WTO Doha Round from a Brazilian Perspective, p.17.
http://www.polis.cam.ac.uk/crp/research/workingpapers/pdf/CRP_Working_Paper_1_Braz_Baracuhy_Rising_P owers_Reforming_Challenges.pdf, Accessed: February 2013.
Clapp, J. 2006. Developing Countries and the WTO Agriculture Negotiations, p.30
http://dspace.cigilibrary.org/jspui/bitstream/123456789/10217/1/Developing%20Countries%20and%20the%20 WTO%20Agriculture%20Negotiations.pdf?1, Accessed: July 2013.
Dhar, B.,Kishore, R. 2013. Prospects of the Bali Ministerial, http://www.unescap.org/tid/artnet/pub/wp13613.pdf Accessed: December 2013.
FAO. 2014. www.fao.org, Accessed: August 2014.
Ferguson, I., F. 2008. World Trade Organization Negotiations: The Doha Development Agenda, p.26 http://www.dtic.mil/cgibin/GetTRDoc?Location=U2&doc=GetTRDoc.pdf&AD=ADA486294, Accessed: June 2013.
ICTSD. 2013. http://www.ictsd.org, Accessed: June 2013.
İmir, M. 2008. DTÖ Tarım Müzakereleri, Türkiye’nin Tutumu ve Müzakere Sonuçlarının Türk Tarımına Olası Etkilerinin Nitel Bir Değerlendirmesi. In: Dünya Ticaret Örgütü Doha Turu Çok Taraflı Ticaret Müzakereleri ve Türkiye (Eds: M. S. AKMAN and Ş. YAMAN). Türkiye Ekonomi Politikaları Araştırma Vakfı (TEPAV), Ankara, pp.133-156. http://www.tepav.org.tr/tr/yayin/s/151, Accessed: February 2013.
Kıymaz, T. 2008. Dünya Tarım Piyasalarında Serbestleşmenin Türk Tarımına Fiyat ve Gelir Yönünden Yansıması, http://ekutup.dpt.gov.tr/tarim/kiymazt/politika.pdf, Accessed: August 2013.
Matthews, A. 2013. Doha Negotiations on Agriculture and Tuture of the WTO Multilateral Trade System,
http://ageconsearch.umn.edu/bitstream/160370/2/01-Matthews%20-%20EAAE%20135.pdf, Accessed: December 2013.
Özatay, C.,C. 2013. DTÖ 9. Bakanlar Toplantısı Sonuçları ve Türkiye İçin Önemi, www.tepav.org.tr, Accessed: August 2014.
Şahinöz, A., Çağatay, S., Teoman, Ö. 2007. Türkiye’de Tarımsal Destekleme Politika Aracı Olarak Fark
Ödeme Sisteminin Uygulanabilirliğinin Tartışılması ve Sistemin İktisadi Bir Analizi, Tarımsal Ekonomi Araştırma Enstitüsü, Yayın No: 155 ISBN 978–975–407–226–6, Ankara, p.76. http://www.tepge.gov.tr/Dosyalar/Yayinlar/66f0663170734ef5bca05355afa6e361.pdf, Accessed: June 2013.
Wilkonson, R. 2006. The WTO in Hong Kong: What it Really Means for the Doha Development Agenda, New Political Economy, Vol. 11, No. 2, June 2006, pp..291-304. http://www.tandfonline.com/doi/pdf/10.1080/13563460600655672, Accessed June 2013.
WTO. 2001. WTO Negotations on Agriculture Proposal by Turkey, G/AG/NG/W/106 5 February 2001, www.wto.org, (Accessed: June.2013)
WTO. 2014/a. Bali Ministerial Declaration, WT/MIN(13)/DEC, 11 December 2013, http://wto.org/english/thewto_e/minist_e/mc9_e/balipackage_e.htm#agriculture, Accessed: February 2014.
WTO. 2014/b. World Tariff Profiles 2013, http://www.wto.org/english/res_e/booksp_e/tariff_profiles13_e.pdf, Accessed: August 2014.
