World Trade Organisation mediators have tabled a compromise package on possible tariff and subsidy cuts in an attempt to salvage the troubled Doha Round – aimed at freeing up global trade.
The chairmen of key WTO negotiating committees on agricultural and industrial market access issues published – on 17 July 2007 – new proposals on how to calculate tariff and subsidy cuts, in a bid to save the troubled Doha Round.
The proposals are based on the latest positions of WTO member governments and, while the two chairs said that the differences separating member countries were not huge, they admitted that political commitment and courage would be required to overcome them.
The main points of their compromise proposals include:
On agricultural market access:
- The EU is being asked to cut its highest tariffs on farm imports by 73% – more than the 60% it has offered so far;
- Governments will be able to classify 4-6% of their agricultural products as “sensitive”, meaning that they will be entitled to maintain higher levels of protection for such goods. The US had been demanding that these be limited to 1%, but the EU had insisted that it needed around 8% of its farm products protected from tariff cuts.
On agricultural subsidies:
- The US is being asked to reduce its overall trade-distorting subsidies (OTDS) by 66-73%. This would bring its permitted levels of spending down to between $13-16.4 billion per year rather than the current $48.2 billion. This is above the $10-11 billion demanded by Brazil and India but below the $17 billion floated by the US.
- The EU, which has already offered to slash its OTDS by 75% – along the lines of developing countries’ demands – could be asked to make a 75-85% cut.
On industrial market access:
- The text on non-agricultural market access (NAMA) says that developing countries should put a ceiling of 19-23% on their tariffs. This is well below the 30% that the Brazilians and Indians have been demanding, but above the 15% that the EU and US had been pushing for in order to increase their access to these growing markets.
- Rich countries would have to cut tariffs on industrial imports to below 3%, with a maximum tariff level set at less than 10%.