Cairns Group reaffirms ambitions for real reform in agriculture

The Cairns Group's strong call for ambitious agricultural reform in the WTO was most welcome, Trade Negotiations and Agriculture Minister Hon Jim Sutton, said after a meeting with key agricultural exporting colleagues in Cartagena, Colombia.

The Cairns Group was founded nearly twenty years ago on a vision of a fair and market-oriented world agriculture trading system.

"Many thought we were seeking utopia, not reality. But ? with hard work ? that vision is coming within reach. This meeting in Cartagena has showed our renewed determination to push on to our final goal," said Mr Sutton.

"The Cairns Group is committed to this process. But we need a good deal ? not just a deal," the Minister cautioned.

Mr Sutton acknowledged the critical concession made last year by the European Union to eliminate export subsidies, the most harmful of all agricultural trade subsidies. "The agreement to export subsidy elimination was not easy for the EU but it was essential. Now we need to agree on the end date ? in our view, there is no justification for elimination taking more than a few years."

"But the really burning question is market access. Nothing is more fundamental to the world trading system. Nothing else will deliver a bigger development dividend. And for New Zealand, nothing else will bring our dairy, meat, wool, horticulture, wine and other agricultural sectors greater benefits.

"The Cairns Group has delivered a strong message on this ? one which is fully consistent with the agreed WTO framework for the negotiations.

"Everyone except the least-developed countries in the world needs to contribute. We want concrete improvements in market access for all products in all markets. That includes the most sensitive products in the wealthiest parts of the world, like Europe and Japan. We have accepted the political reality that these products need flexibility ? but that doesn't mean a free pass from reform.

"Most countries in the Cairns Group are developing countries, and they're prepared to put an offer on the table too. But developing countries can't be expected to open themselves up to unbridled competition from rich farmers nourished by gargantuan subsidies to sumo wrestler proportions. There has to be a comprehensive reform, including real new access into OECD markets, the early elimination of export subsidies and big reductions in trade-distorting domestic support.

"Developing countries also need special and differential treatment targeted at their key food security and rural development needs ? but we have agreed that these rules have to be designed so that they don't block trade," the Minister said.

Mr Sutton noted that, although the meeting was focused on agriculture, Ministers had recognised the global perspective. "Everyone in this WTO negotiation is going to have to make difficult decisions. That can only be done if there is a big, balanced overall deal which includes not only agriculture but also industrial goods, services and a host of other issues, and delivers a win/win outcome for all."

The Cairns Group is chaired by Australia and includes Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand, Uruguay. It met from 30 March to 1 April in Cartagena, Colombia.

The moment has arrived in this Round to face up to the difficult decisions required to bring about a fairer trading environment for the world's farmers.

The Cairns Group has put agriculture at the centre of this Round and we will ensure that a significant result is achieved. We reiterate that there can be no successful outcome to the Doha Round without a substantial package of reforms in agriculture. Agriculture has waited long enough. Today, more than ever, the discrimination against agriculture must end.

The Sixth Ministerial Meeting of the WTO in Hong Kong will be critical to advancing this goal.

We have committed ourselves to achieving agreement on modalities for agriculture by this time and to this end have agreed to intensify our engagement in coming months.

Cairns Group Ministers will apply the same level of ambition we have applied since the outset of these negotiations. We seek the elimination of all forms of export subsidies, substantial reductions in trade-distorting domestic support, and substantial improvements in market access opportunities for all products.

We are concerned that some in the WTO Membership appear to be attracted to moving away from the level of ambition we agreed at the outset of this Round. That would be a perilous development. A lowering of the agreed level of ambition in agriculture would risk unravelling the success of the entire Doha agenda.

Reforms agreed in this Round must deliver real cuts in subsidies and protection to ensure our farmers see genuine change on world markets. This result will be particularly important for developing countries.

Now is the time to deliver on that promise.

We have identified the following as essential elements of our approach to the negotiations in the lead up to Hong Kong.

We welcome the agreement achieved in the July Decision on the elimination of all forms of export subsidies, given their pernicious effects on agricultural markets. Ministers recalled the Cairns Group's position, in 2002, for developed countries to phase out their export subsidies in a period as short as possible.

We have long argued that the billions of dollars poured into farm support programs by rich governments undermine the prospects of efficient, unsubsidised, producers ? particularly in developing countries. Our level of ambition is clear: in order to be substantial, reductions to trade-distorting domestic support must cut significantly into the current spending levels of the major developed countries.

Special and differential treatment for de minimis support must acknowledge that developing countries often allocate their limited entitlements to subsistence and resource-poor farmers and do not have the capacity to compete in farm subsidy wars. Developing countries that allocate almost all de minimis support for subsistence and resource-poor farmers will be exempt from reduction.

We will not settle for an outcome that would weaken the current architecture for domestic support or allow trade-distorting support for any product to increase. Criteria for the Green Box must ensure that these measures have no, or at most minimal, trade-distorting effects or effects on production. Similarly, Blue Box criteria must ensure that these payments are truly less trade-distorting than Amber Box measures.

Concrete improvements in market access must pass the same benchmark test of making a difference to the lives of our farmers. We will not allow market access to once again escape serious reform. As agreed in the July Decision, reforms to market access must provide substantial new opportunities for all products in all markets.

The tiered tariff reduction formula will be the key to ensuring this Round delivers new trade flows including by tackling tariff peaks and tariff escalation. We will ensure that we achieve the Framework's requirement of substantial improvement in access for sensitive products, through combinations of tariff reductions and tariff quota expansion.

The Cairns Group has contributed significantly to efforts to find a way forward on the issue of converting non-ad valorem tariffs to their ad valorem equivalents. We urge all Members to make similar contributions. We are disappointed that despite our efforts, and the flexibility we have shown, the issue has yet to be resolved. Equally, we will not compromise on the need to ensure integrity in that process.

We reaffirm the importance for many WTO Members, especially least developed countries, of tangible results from the initiative on cotton and the urgent need to address this issue in accordance with the July Framework.

A strong outcome in the Doha Round provides the best guarantee for developing countries that food security will not be undermined, and the best possible climate for sustainable development, including to address poverty alleviation and the particular development concerns of their rural populations. Special and differential treatment, including the concepts of the Special Safeguard Mechanism and Special Products, will be essential to assist developing countries to best adapt to liberalisation. Special and differential treatment should be designed in such a way as to facilitate the continued growth in trade of agricultural products.

In line with paragraph 43 of the Framework text, we reiterate our commitment to achieve the fullest liberalisation of trade in tropical agricultural products and for products of particular importance to the diversification of production from the growing of illicit narcotic crops.

Ministers also recognised the needs and concerns of small and vulnerable economies must be addressed during this negotiation according to paragraph 35 of the Doha mandate without creating a sub-category of Members.

We urge all WTO Members to avoid implementing or re-introducing any trade-distorting measures against the spirit of the liberalising objectives of the Doha Round, especially any new export subsidies.

The period leading up to Hong Kong will require the leadership of the Cairns Group and of many in the WTO community. We will work closely with other groups to achieve our goals. We call, in particular, on all WTO Members which are responsible for the distortions in global agriculture to show leadership. This leadership must begin by accepting that a fairer environment for global agriculture will require significant changes to their domestic and trade policy settings.

Our meeting in Cartagena has benefited from constructive discussions with our colleagues from the United States (Secretary of Agriculture, Mr Mike Johanns), the European Communities (Agriculture Commissioner, Ms Mariann Fisher Boel), Kenya (Minister of Trade and Industry, Dr Mukhisa Kituyi), and negotiating Chair, Ambassador Tim Groser.

We have also appreciated the presence in Cartagena of the Cairns Group Farm Leaders, the Global Dairy Alliance and the Global Sugar Alliance, and their statements of strong support for the Group's positions in the negotiations.

We wish to express our appreciation to Ministers Botero and Arias and the Colombian Government for their generosity and hospitality in hosting the 27th Ministerial Meeting of the Cairns Group.

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