You can add a fourth box to the amber, blue and green boxes the World Trade Organization uses to try to keep straight the “aggregate measures of support” member countries provide to agriculture.
The fourth is a “black box,” the term U.S. trade officials have adopted to describe the loopholes some countries are trying to carve out in the ongoing debate over increased market access, the issue that has ground the Doha Development Round to a halt.
“In WTO speak, when we’re talking about domestic support and cuts in domestic support, we understand how that’s structured,” said U.S. Trade Representative Susan Schwab. “We have the amber box, we have the blue box and we have the green box. It turns out in market access all we have is a black box.”
That box, it turns out, is filled with loopholes, she said. “Unless and until we are able to pin those down and figure out what is behind the curtain, we don’t what is there; we can’t evaluate what’s on the table.”
Schwab spoke at Washington’s National Press Club a few days after trade officials from 50 countries met in Geneva to try once again to find a consensus in the nearly five-year-old Doha Round. (Other USTR staffers also were making the Washington circuit with Jason Hafemeister, deputy assistant for agricultural affairs, speaking at the National Cotton Council’s mid-year board of directors meeting.)
The meeting in Geneva ended a day earlier than scheduled after WTO leaders decided no progress was being made in finding a breakthrough on market access.
“The European Union, for example, claimed it was ready to improve its fall offer in agriculture and market access, but we discovered the offer was both too vague and too full of loopholes to really get a sense of whether it was better or not,” Schwab said.
The United States, the European Union and the Group of 20 developing countries led by Brazil and India have each proposed tariff reductions, ranging from 75 percent to 39 percent. But the EU and G-20 are also seeking exemptions known as the three Ss – sensitive products, special products and special safeguards for agriculture.
Schwab said an Australian analysis shows that if you combine the 54 percent average tariff reduction which is a nominal cut for developed countries in the G-20 proposal with the treatment of sensitive products in the EU’s proposal from last fall, you have the equivalent of a 40 percent tariff cut.
“And you still don’t know whether those products, those commodities that you really care about, are on the table at all,” she said in the speech at the National Press Club.
Ambassador Schwab said she never felt a “sense of energy or the buzz that comes with knowing there’s an imminent breakthrough or potential breakthrough” during the June 30-July 1 ministerial meeting in Geneva.
“We all showed up, presumably ready to deal, but there was no deal made,” she said. “Perhaps the rest of the world expected the United States to show up to give more in domestic support and agriculture and to get less in terms of market opening. There’s no balance in that equation.
“If the United States needs to adjust its offer from last October downward, we risk generating a downward spiral. That’s also not the answer.” (Schwab was referring to the U.S. proposal to reduce its farm subsidies by 60 percent as part of another effort to revitalize the Doha negotiations.)