Step ahead

WTO Trade ministers resolve agri-trade impasse

Last Updated: Saturday 04 July 2015

worldTrade Organisation (wto) negotiations on agricultural tariff reductions have begun moving forward after weeks of suspension. The bone of contention was the question of what trade data to use to calculate current import tariff levels of countries that express these in terms of quantity (us $ per kilogramme). On May 3, 2005, a compromise was reached at a meeting of trade ministers from Australia, the us, the eu , India and Brazil, held in Paris, France.

Most developed countries calculate their tariff levels in terms of quantity. According to the current agreement, these tariffs are to be converted into a percentage of the value of imports, not the quantity. Different estimates of these values exist. Countries prefer to project lower estimates, as these are subject to lower cuts. Under the compromise reached, if a difference of 40 per cent exists between estimates calculated from the two statistical databases, the wto Integrated Database and the un Commodity Trade Statistics Database, an average of the values will be used to calculate the tariff level.

With the technical issue settled, negotiations can again focus on the larger issues to be resolved before the wto ministerial meeting in December 2005. For agricultural trade, members have yet to agree to a reduction of domestic subsidies and an end date for export subsidies. They also have to resolve non-agricultural issues like the level of tariff reductions for developed and developing nations.

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