The Doha Round foundation and issues

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Address objective. To guarantee you have adequate comprehension of the issues in the Doha Round farming transactions to have the capacity to take after the verbal confrontation. Perusing. WTO agrarian backgrounderICTSD and www.agtradepolicy.orgWorld Bank Trade NotesFAO briefsEU DG Trade and USTR websitesAnania et al. Horticultural Policy Reform and the WTO.

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The Doha Round – foundation and issues Lecture 25 The Economics of Food Markets Alan Matthews

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Lecture goal To guarantee you have adequate comprehension of the issues in the Doha Round agrarian arrangements to have the capacity to take after the civil argument

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Reading WTO horticultural backgrounder ICTSD and World Bank Trade Notes FAO briefs EU DG Trade and USTR sites Anania et al. Horticultural Policy Reform and the WTO

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Chronology Third WTO Ministerial Meeting in Seattle in November 1999 neglected to dispatch extensive transactions Article 20 arrangements: Analysis and Exchange the EU's Comprehensive Negotiating Proposal , December 2000 Doha Mandate, November 2001 EU's Specific Drafting Input, January 2003 Harbinson Modalities, Feb/March 2003 Adoption of the Fischler Reforms, June 2003 EU/US Joint Initiative, August 2003 Cancún Ministerial, September 2003 Derbez draft

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Chronology EU's offer to kill send out endowments, May 2004 Framework Agreement, July 2004 Paris May 2005 concession to AVEs Dalien July 2005 G20 proposition on market get to Zurich Oct 2005 recommendations on market get to Hong Kong Ministerial, December 2005

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Chronology New due date of April 2006 to achieve concurrence on modalities Chairman Falconer's reference papers April-June 2006 July 2006 Suspension of Doha Round January/Feb 2007 Revival of transactions Chairman's draft modalities July 2007 Chairman's updated draft modalities February 2008

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Negotiating bunches Negotiating process Special Committee on Agriculture 'Green Room' WTO Ministerial Council gatherings Developed nations US, EU Cairns Group G-10 Developing nations G-20 G-90 G-33

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Negotiation issues in farming Market get to Export appropriations Domestic bolster Non-exchange concerns Special and differential treatment (S&DT) for creating nations

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Tariff lessening issues High bound taxes stayed in agribusiness after URAA – 62% by and large Tariff-trimming approaches Request and offer versus equation approach Linear versus blending formulae Cocktail formulae Principles recommended Progressivity, adaptability, proportionality, and powerful market get to Latter brings up the issue of 'authoritative or duty overhang'

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Market get to – what should be chosen? The levels (what number of? Which limits?) G20 proposition at Dalien acknowledged as reason for talk The levy lessening equation inside every level Linear cut, dynamic straight cut, Swiss recipe, Uruguay Round approach (takes into account adaptability) Sensitive items what number, and what treatment? Critical – the general level of desire

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The AVE (promotion valorem proportionate) issue Specific and blended taxes need to changed over into AVE's to know into which level they fall AVE transformation is clear for some tax lines; Members utilize the 'unit esteem' technique in these cases, constructing the change in light of advised import values in the WTO Integrated Database (IDB) and import volumes. Complexities emerge where inclinations or levy shares are included. In such cases, import costs regularly vary essentially from the world costs gathered in the UN item exchange measurements (ComTrade) database. Rural exporters needed change in light of the lower world costs, which would prompt to higher AVEs, and in the long run, more extreme duty cuts.

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Blended and grouped formulae Banded (or layered) recipe, where higher groups would be liable to a higher normal decrease Blended equation, where levies are diminished by a blend of three methodologies: the Uruguay Round approach, the Swiss recipe, and slicing taxes to zero. Harbinson proposed utilizing UR equation inside each band Options for adaptability – UR recipe, touchy items

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Example of Swiss equation T 1 = a T 0/( a +T 0 ) With parameter an of 140, a tax of 350% is diminished to 100% With parameter an of 60, tax lessened to 51.2% With parameter an of 16, tax decreased to 15.3%

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Formula: P d = P 0 ( 1 + 0.64 t ) for created nations or P d = P 0 ( 1 + 0.76 t ) for creating nations

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Measuring the level of aspiration Illustration of official (duty) overhang Binding (levy shade is the place a cut in bound duties would have no impact in cutting current connected tax rates – no expansion in viable market get to Bound tax pre-Doha half cut Bound tax post-Doha Bound tax Applied tax

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Measuring the level of desire "Normal of the tax cuts" versus "Cuts in the normal tax" Former is measured as the normal of all individual rate cuts Latter is the examination of the normal tax level pre-and post-arrangements Former was the strategy utilized as a part of the Uruguay Round.. .. be that as it may, has no monetary importance in light of the fact that a high normal cut can by acquired by cutting many low levies by a substantial sum (100%)

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Illustration of normal tax cuts

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Level of aspiration in EU Oct 2005 proposition

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Sensitive items July 2004 Framework Agreement "Without undermining the general goal of the layered approach, Members may assign a suitable number, to be arranged, of duty lines to be dealt with as delicate, assessing existing duties for these items. The rule of 'generous change' will apply to every item. 'Significant change' will be accomplished through mixes of tax portion duties and levy decreases applying to every item. In any case, adjust in this arrangement will be discovered just if the last arranged outcome additionally mirrors the affectability of the item concerned.

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Sensitive item issues what number levy lines permitted touchy? What ought to be permitted deviation from the tax cutting equation (20%? half? Sliding scale 40-60%?) How ought to the comparing TRQ increment be ascertained As rate of residential utilization Expansion in light of existing TRQs Expansion in view of current imports

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Other market get to issues Should there be a levy top? Eventual fate of Special Safeguard instrument (SSG) Should particular taxes be taboo? Organization of TRQs Tariff heightening Tropical items Preferences and inclination disintegration

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Recall that a TRQ has three components – portion, in-quantity levy, out-of-standard tax Increase least get to or decrease in-amount duty Effect relies on upon whether TRQ is restricting TRQ organization judged on portion fill and predisposition in the conveyance of exchange (sales, first start things out served, memorable shares, connected standards) TRQs

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Domestic bolster AMS exchange bending support: what amount of lessening? Lessening technique – ought to support be diminished by a given sum or to a specific level? Confine item particular support? De minimis – what to do about it? Blue Box – dispose of it or train it? Green Box – ought to criteria be fixed? Ought to extra measures be permitted, e.g. non-exchange concerns

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Export rivalry Export sponsorships – different streets conceivable to full end (by item, by fixing quality and volume imperatives) Export credits – teach by guidelines, or by compelling government expenses? Sustenance help – is nourishment help a type of financed fare? Sending out State Trading Enterprises – issues over government ensures, monopolistic and monopsonistic powers, capacity to cost separate, cost pooling

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Initial US position Two stage prepare, prompting to finish advancement Elimination of fare sponsorships inside 5 years Use of orchestrating tax decrease recipe to guarantee greatest levy is 25% Expansion of TRQs Limit AMS to 5% of estimation of horticultural generation and take out Blue Box Limited SDT for creating nations

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Initial EU position Continuation of UR equation for duty diminishments (36% all things considered with 15% least) 55% cut in AMS endowments more than 6 years Reduction in fare appropriation consumption by 45% and disposal for particular items SDT for creating nations, including free access for the slightest created nations Emphasized non-exchange concerns, for example, sustenance naming, creature welfare, geological signs and preparatory guideline in the rural arrangements

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The Harbinson draft Cutting high levies more than low taxes utilizing a grouped approach Suggested utilizing UR equation inside each band Introduced recipe to handle tax heightening Proposed multiplying TRQs Elimination of fare appropriations more than 10 years with parallelism on fare credits, nourishment help and fare STEs 60% lessening in AMS more than 5 years Either moving Blue Box into AMS or topping Blue Box and diminishing considerably more than 5 years Revisiting Green Box however making ecological and creature welfare installments qualified

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Market get to – level of desire? Harbinson proposition 2003

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The July 2004 Framework Agreement Followed the disappointment at Cancun and the Lamy/Fischler letter offering to restrictively wipe out fare endowments Pre-modalities archive – set out standards to direct the arrangements yet contains no figures and little structure

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Hong Kong Ministerial Council Progress in the Ministerial Declaration End date for fare appropriations (with parallel orders to be concurred by 30 April 06) Some lucidity on the modalities for household bolster diminishments Minimal advance on market get to Duty free and share free access for minimum created nations Compromise on the cotton activity Aid for exchange bundle

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The 'arrival zone' Export rivalry teaches basically concurred after Hong Kong EU to acknowledge G20 proposition on market get to (54% slice in normal levy contrasted with claim proposition of 39%) Mandelson Davos discourse "prepared to include more than 10 rate focuses" US to bring local support around