The Doha Round mandate envisaged a review of the criteria for defining support as “Green Box” support and to allow effective coverage of programmes of developing countries that cause no more than minimal trade-distortion. The draft modalities include proposals to tighten criteria for developed countries and possible revision of conditions for developing countries' food stockpiling purchases from low-income farmers or those with few resources, at prices that are higher than the market.
De minimis support also has to be reduced in the Doha Round, with special treatment for developing countries. Developed countries are to cut by 50% from day one (i.e. cap at 2.5% of the value of production, from the current 5%). Developing countries with Amber Box commitments are required to cut de minimis by two-thirds of the developed country cuts (from the current 10% of the value of production, i.e., ending up with about 6.7% of the value of production). Developing countries, like India, with no AMS commitments will not be required to cut de minimis support.
Yes, this Round also seeks to place limits on subsidies at the level of products, in order to avoid shifting support between different products. For countries other than the US, the ceiling or maximum level would be the average support actually provided during the Uruguay Round implementation period (1995-2000). The calculation for the US would be based on total Amber Box support for specific products per year for that period but shared among products according to the average share over the years 1995-2004. Another special dispensation, implicitly for the US, is that they can begin with a cap that is 30% higher than the scheduled limits.
Negotiations on these issues began first informally in September 2008 and then in the WTO's Agriculture Negotiating Group from October 2008. This continued till early December but solutions continued to elude the negotiators.
In the 6 December 2008 version of the draft modalities, the Chair has left the section on SSM untouched. However, he has given his suggestions for a possible solution to the above UR bound problem in a separate paper (TN/AG/W/7) also brought out on 6 December 2008.
In the Doha Round, the debate has been about whether to eliminate the SSG, or reduce the number of products for which it can be invoked and to constrain it. The G-20 has always maintained that this is a transitional instrument and should be eliminated at the earliest. The EC, Switzerland, Japan and Norway want the SSG to continue.
The Chair's 6 December 2008 text proposed that on the first day of implementation, developed country Members would reduce the number of lines eligible for the SSG to 1% of scheduled tariff lines and eliminate the SSG no later by the end of the seventh year of implementation.
For developing country Members the SSG coverage would be reduced to no more than 2.5% of tariff lines on the first day of implementation. For Small and Vulnerable Economies (SVEs) the SSG coverage shall be reduced to no more than 5 per cent of lines over 12 years.
The AoA allowed Members to take special emergency actions (“special safeguards” by way of imposition of an additional tariff) in the case of products whose non-tariff restrictions were converted to tariffs, in order to prevent swiftly falling prices or surges in imports from hurting their farmers. The right to do so was reserved by 38 members and for a limited number of products in each case. India was not entitled to do so because it exercised the option of binding its tariffs instead of “tariffication” of quantitative restrictions (on account of balance of payments problems).
For developing countries the quota expansion is two-thirds of the amounts for developed countries, and domestic consumption does not include subsistence farmers' consumption of their own produce.
Instead of offering tariff rate quotas, developing country Members can take the full formula cuts on all their Sensitive Products but over an implementation period three years longer than normal
Members (both developed and developing) may designate an appropriate number of tariff lines to be treated as sensitive, on which they would undertake lower tariff cuts. Even for these products, however, there has to be “substantial improvement” in market access, and so the smaller cuts would have to be offset by tariff rate quotas, thus improving the possibilities of market access. According to the draft modalities of 6 December 2008, developed countries can designate 4% of tariff lines as sensitive products; for members with more than 30% of their tariff lines in the top tariff band (75+band), a higher entitlement of 6% is proposed.
Developing countries can designate one-third more (5.3% or 8%) of products, as Sensitive Products.
Almost 35% of India's agriculture tariff lines are in the top band of 130+ and therefore, the sensitive product entitlement would be 8%. In other words, India would have the flexibility to take lower cuts than would otherwise be required under the tariff reduction formula on 8% lines, using one of the options for developing countries that do not require provision of access through tariff quotas.
No, Special Products will be self-designated, that is, once the modalities are finalised, the developing country Member will decide which of its products it wants to designate as SPs. Once this is decided, the list would be notified to the WTO as part of the Member's schedule of commitments under the Doha Round.
In India's case, the list of SPs would be decided by the Ministry of Agriculture and Cooperation, the Ministry of Food Processing Industries, the Department of Commerce and other agencies concerned in consultation with State Governments.
The Hong Kong Ministerial Declaration of December 2005 provides that developing country members would have the flexibility to self-designate an appropriate number of tariff lines as “Special Products” (SPs) guided by indicators based on the criteria of food security, livelihood security and rural development. This is a special and differential treatment provision that allows developing countries some flexibility in the tariff cuts that they are required to make on these products.