WTO Doha Round: The Agricultural Negotiations

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The pace of efforts to revive suspended World Trade Organization Doha Round trade negotiations
has quickened as the July 2007 expiration for fast-track or trade promotion authority for
expedited congressional consideration of trade agreement legislation approaches. Although
technical negotiations have addressed specific formulas for reducing trade-distorting farm support
and tariffs, high-level political discussions have yet to produce a satisfactory compromise among
WTO members for future agricultural trade liberalization.
Negotiations were suspended in July 2006 when a core group of WTO member countries—the
United States, the European Union (EU), Brazil, India, Australia, and Japan—known as the G-6
reached an impasse over specific methods to achieve the broad aims of the round for agricultural
trade: substantial reductions in trade-distorting domestic subsidies, elimination of export
subsidies, and substantially increased market access for agricultural products.
The WTO is unique among the various fora for international trade negotiations in that it brings
together its entire 150-country membership to negotiate a common set of rules to govern
international trade in agricultural products, industrial goods, and services. Regarding agriculture,
because policy reform is addressed across three broadly inclusive fronts—export competition,
domestic support, and market access—WTO negotiations provide a framework for give and take
to help foster mutual agreement.
Doha Round negotiators were operating under a deadline effectively imposed by the expiration of
U.S. trade promotion authority (TPA), which permits the President to negotiate trade deals and
present them to Congress for expedited consideration. To meet congressional notification
requirements under TPA, an agreement would have to be completed by the end of March 2007.
TPA, which could be extended by Congress, preserves Congress’s key role in approving trade
agreements while providing the President with credibility to negotiate with trading partners who
otherwise might fear that Congress would amend an agreement that had been negotiated.
As a result of the suspension of the negotiations, a major source of pressure for U.S. farm policy
change will have dissipated. Supporters of farm bill changes were looking to a Doha Round
agreement to require changes in U.S. farm subsidies to make them more compatible with world
trade rules. Proponents of continuing farm subsidy programs appear strengthened by the
indefinite suspension of the Doha talks. The United States must still meet obligations under
existing WTO agricultural agreements, and some trade analysts think that, without a new trade
agreement, there could be an increase in litigation by WTO member countries alleging they are
harmed by U.S. farm subsidies.
This report assesses the status of agricultural negotiations in the Doha Round and will be updated
as developments unfold.

Introduc tion ..................................................................................................................................... 1
Current Status of Doha Round Agricultural Negotiations...............................................................1
The July 2006 Suspension of Doha Round Negotiations................................................................3
The Hong Kong Ministerial Declaration.........................................................................................4
Incremental Progress on Agriculture in the Hong Kong Declaration.......................................5
Export Competition.............................................................................................................5
Domestic Support...............................................................................................................6
Market Access.....................................................................................................................6
Cotton......................................................................................................................... ......... 6
Agriculture, NAMA, and LDCs..........................................................................................7
Agricultural Negotiating Developments Preceding the Hong Kong Ministerial.............................7
Overvi ew ....................................................................................................................... ............ 7
Comparison of Major Agricultural Negotiating Proposals........................................................8
The U.S. Proposal...............................................................................................................9
The EU Proposal...............................................................................................................10
The G-20 Proposal............................................................................................................12
The G-10 Proposal............................................................................................................12
The G-33 Proposal for Special Products...........................................................................13
The Cotton Issue: Background................................................................................................18
Role of Developing Countries.................................................................................................19
Other Negotiating Issues.........................................................................................................19
Role of Congress: Trade Promotion Authority and the Farm Bill.................................................20
Background on the Doha Round...................................................................................................20
Agricultural Negotiations: Doha to Cancun............................................................................20
July 2004 Framework Agreement for Agriculture..................................................................21
Pillar 1—Export Competition.................................................................................................22
What Was Agreed to in the Framework............................................................................22
Export Competition Issues to Be Resolved.......................................................................22
Pillar 2—Domestic Support....................................................................................................23
What Was Agreed to in the Framework............................................................................23
Domestic Support Issues to Be Resolved.........................................................................24
Pillar 3—Market Access.........................................................................................................25
What Was Agreed to in the Framework............................................................................25
Market Access Issues to Be Resolved...............................................................................25
Potential Effects of a Successful Doha Round..............................................................................26
Global Trade and GDP............................................................................................................27
U.S. Farm Policy Implications................................................................................................28
Export Competition...........................................................................................................28
Domestic Support.............................................................................................................29
Market Access...................................................................................................................29
Potential Economic Impact on U.S. Agriculture.....................................................................30
Under the Uncompensated Scenario.................................................................................31
Under the Compensated Scenario.....................................................................................31
Under Both Scenarios.......................................................................................................31

Information Sources......................................................................................................................33
CRS Reports............................................................................................................................33
Other Sources..........................................................................................................................33
Table 1. Comparison of Proposals for Domestic Policy Reform: U.S., G-20, EU, and G-
10 ................................................................................................................................................ 14
Table 2. Doha Round Negotiations Market Access Proposals: G-10, G-20, EU, and U.S............15
Table 3. U.S. Domestic Spending Limits and Outlays: Current Status, Framework
Agreement, and U.S. Reform Proposal......................................................................................17
Table 4. Summary of FAPRI Analysis of U.S. Proposal...............................................................32
Appendix A. Chronology of Key Events.......................................................................................35
Appendix B. Key Players in the WTO DDA Negotiations............................................................36
Appendix C. Key Terms From the WTO Agreement on Agriculture and the DDA......................37
Author Contact Information..........................................................................................................38

This report discusses agricultural issues in World Trade Organization (WTO) multilateral trade
negotiations—the so-called Doha Round or the Doha Development Agenda (DDA). The initial
focus is on the implications of the suspension of Doha negotiations in July 2006 for future trade
negotiations and the next U.S. farm bill. The report discusses current efforts to revive the
suspended negotiations, the reasons for the July 2006 suspension of negotiations, and the
agreements reached at the December 13-18, 2005, Hong Kong Ministerial meeting. Briefly
discussed also are the role of the U.S. Congress; the major negotiating issues and proposals at
play in the Doha Round; the historical development of agricultural trade negotiations since the
Uruguay Round; and the potential economic benefits estimated to ensue from a successful trade
agreement according to several recent studies.

Numerous meetings between leading member countries of the World Trade Organization have
been taking place since the July 2006 suspension of formal negotiations. The pace of efforts to
revive the Doha Development Agenda multilateral trade negotiations has quickened as the
expiration of fast-track or trade promotion authority for congressional consideration of trade
agreements approaches. TPA (in Title XXI of P.L. 107-210) expires June 30, 2007, unless the ^th
110 Congress votes to extend it, and there is little likelihood that a comprehensive trade
agreement could survive congressional debate without the expedited procedures that TPA
provides. Some Members of Congress have discussed extending TPA either in its present form or ²
with amendments that would give greater weight to labor and environmental considerations. TPA
authority would be needed for a speedy consideration of a multilateral trade agreement but also ³
for various other free trade agreements that are currently being negotiated.
Just as disagreement over agricultural issues was the principal cause of the July 2006 suspension
of negotiations, agriculture has been at the center of efforts to restart the negotiations. After
resuming on November 16, 2006, negotiations have focused on various formulas for reducing
trade-distorting subsidies and tariffs. There have also been discussions at the political level
involving presidents and prime ministers as well as trade ministers. The political discussions have
involved expressions of support for successfully concluding the round as well as expressions of ⁴
willingness to reach satisfactory compromises on the issues dividing WTO members.

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In policy discussions, the United States is being asked by the European Union (EU) and the
developing countries, led by Brazil and India, to make a more generous offer for reducing trade-
distorting domestic support. The United States is insisting that the EU and the developing
countries agree to make more substantial reductions in tariffs and to limit the number of import-
sensitive and special products that would be exempt from cuts. Import-sensitive products are of
most concern to developed countries like the European Union, while developing countries are
concerned with special products—those exempt from both tariff cuts and subsidy reductions
because of development, food security, or livelihood considerations. Brazil has emphasized
reductions in trade-distorting domestic subsidies, especially by the United States (some of which
it successfully challenged in the WTO U.S.-Brazil cotton dispute discussed below), while India
has insisted on a large number of special products that would not be exposed to wider market
opening.
Discussions have been particularly intense between the United States and the EU. The U.S.
President has met with the president of the European Commission, and there have been several
meetings between the U.S. Trade Representative and the EU Commissioner for Trade. While U.S.
and EU negotiators have not changed their official positions since suspension of negotiations as
described below, there have been suggestions that each could show more flexibility: the United
States might offer a greater percentage reduction in domestic support if the EU offered to reduce
tariffs further and limit the number of import-sensitive products. However, new offers on
domestic support and market access by the United States and the EU are constrained by domestic
political considerations. Neither U.S. nor EU farmers have professed a willingness to support
further concessions on subsidies or tariffs. No clear idea has yet emerged as to how much tariff
reduction would be needed to match domestic subsidy cuts or vice versa to satisfy U.S. or EU
farm interests.
While U.S. and EU agreement is a necessary condition for successfully concluding a Doha Round
agreement, it is not sufficient. The 1994 Uruguay Round was concluded due in large part to a
U.S.-EU agreement on the major issues. In Doha Round negotiations, however, developing
countries are playing a major, even decisive, role. Brazil’s position on both domestic support and
tariff reduction (discussed below) is considered by many as a middle ground, although the United
States has said that Brazil’s proposal for tariff reduction (an average cut of 54%) falls short of the
kind of ambition in tariff reduction it has called for (an average cut of 66%). India, as a member
of the G-20 group of developing countries, has endorsed the G-20 proposal, but has yet to
demonstrate any flexibility in its demand for a large number of special product exemptions from
new trade rules.
The next step in restarting the Doha Round negotiations will be an informal WTO Minister’s
meeting “on the margin” of the World Economic Forum in Davos, Switzerland, in January 2007.
The aim of the meeting will be to take stock of trade ministers’ views and, if possible, make
decisions about resuming negotiations at the ministerial level. Around 30 trade ministers
representing the full range of WTO member country interests are expected to attend the meeting.
A successful Davos meeting could result in a new schedule for resuming negotiations in the Doha
Round, not a broad outline for resolving the main negotiating issues.

On July 24, 2006, the Director General of the WTO, Pascal Lamy, announced an indefinite
suspension of further negotiations in the Doha Round. The principal cause of the suspension was
that a core group of WTO member countries—the United States, the European Union (EU),
Brazil, India, Australia, and Japan—known as the G-6 had reached an impasse over specific
methods to achieve the broad aims of the round for agricultural trade: substantial reductions in
trade-distorting domestic subsidies, elimination of export subsidies, and substantially increased
market access for agricultural products. The United States maintained that it had made an
ambitious offer of reductions in trade supporting domestic support (discussed below) that had not
been matched by agricultural tariff reductions by the EU or by market opening for agricultural
and industrial products by Brazil and India, both large developing countries. The EU and Brazil
argued that the U.S. offer on domestic support did not go far enough in reducing trade-distorting
support and would in fact leave the United States in a position to spend more on such subsidies
than under the current WTO (Uruguay Round) Agreement on Agriculture.
Doha Round negotiators were operating under a deadline effectively imposed by the expiration of
U.S. trade promotion authority (TPA), which permits the President to negotiate trade deals and
present them to Congress for an up or down vote without amendment. To meet congressional
notification requirements under TPA legislation, an agreement would have to have been
completed by the end of 2006. TPA expires on June 30, 2007. Some trade policy analysts think ^th
that reauthorization of TPA faces uncertain prospects in the 110 Congress. Some, however,
suggest that Congress might extend TPA temporarily if a Doha Round agreement seemed
imminent, as was the case in 1994 for the Uruguay Round Multilateral Trade Agreements.
A number of agreements had already been reached in the Doha Round agricultural negotiations,
but they are contingent on a comprehensive agreement in the single undertaking (“nothing is
agreed until everything is agreed”) that is the round and will now be put on hold. Those include
an agreement by the EU to eliminate its agricultural export subsidies by the end of 2013 and an
agreement by developed countries to extend duty and quota free access to 97% of the exports of
the least developed countries. The agreement at Hong Kong to provide early and ambitious
subsidy reduction for cotton also is dependent on there being a comprehensive Doha round
agreement. The WTO will continue to provide aid for trade funds to help developing countries
participate more fully in the world trade system. Aid for trade discussions were conducted outside
the framework of Doha Round negotiations.
As a result of the suspension of the negotiations, a major source of pressure for U.S. farm policy
change has dissipated. The current farm bill (P.L. 107-171) expires in 2007, and many were
looking to a Doha Round agreement on curbing trade-distorting domestic support to require
changes in U.S. farm subsidies to make them more compatible with world trade rules. The option
of continuing current farm subsidy programs appears strengthened by the indefinite suspension
and uncertain prospects of the Doha talks. Legislation (H.R. 4332, H.R. 4775, and S. 2696) ^th
already had been introduced in the 109 Congress to extend the 2002 farm bill by one year. The
American Farm Bureau, at its 2007 annual meeting just concluded, endorsed “the concepts of the

2002 farm bill” for its farm safety net features (i.e., the set of direct payments and price-related ⁵

commodity support).
The United States must still meet obligations under existing WTO agricultural agreements, which
limit its trade-distorting spending to $19.1 billion annually. Some trade analysts think that there
could be an increase in litigation by WTO member countries that allege they are harmed by U.S. ⁶
farm subsidies. The expiration of the “peace clause” (Article 13 of the 1994 Uruguay Round
Agreement on Agriculture) means that WTO member countries are no longer bound by an
agreement to refrain from challenging each other’s agricultural subsidy programs so long as
commitments under the agreement are being met. Brazil’s successful challenges of U.S. cotton
subsidies and EU sugar subsidies in WTO dispute settlement are cited as illustrations of the ⁷
possible kinds of legal actions that WTO members might take. Canada’s recent challenge to U.S. ⁸
corn and other farm subsidies appears aimed at influencing the next farm bill.
Another consequence of the suspension of Doha Round negotiations is that the United States may
pursue more aggressively bilateral and regional free trade agreements (FTAs). Currently, the
United States is negotiating nine FTAs. Agreements with larger economies will be particularly
attractive to U.S. agricultural interests. The U.S. Trade Representative has indicated that in the
near term priority will be given to negotiating FTAs with such larger U.S. trading partners as ⁹
Korea and Malaysia. TPA procedures also apply to legislation to implement bilateral FTAs,
lending some urgency to the completion of ongoing negotiations in time to meet TPA deadlines
for congressional notification. Congress also could choose to extend TPA for bilateral trade
agreements.

On December 18, 2005, in Hong Kong, WTO member countries reached agreement on a broad
outline of negotiating objectives for liberalizing global trade in agriculture, manufactures, and ¹⁰
services in the Doha Round of multilateral trade negotiations. However, only limited progress
was made in reaching agreement on precise numerical formulas or targets (termed “modalities”)
for liberalizing agricultural trade, the original aim of the Hong Kong (HK) Ministerial.

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The Hong Kong agreement set new deadlines for completing the Doha Round in 2006 (see 0).
None of these deadlines were met prior to the July 2006 announcement that the negotiations had
been suspended indefinitely. According to the HK agreement, modalities for cutting tariffs on
agricultural products, eliminating export subsidies, and cutting trade-distorting domestic support
would be agreed to by April 30, 2006. Based on these modalities, member countries would then
submit comprehensive draft schedules by July 31, 2006. The Doha Round would be concluded in
2006. Completing negotiations by year’s end would have allowed enough time to submit an
agreement to Congress before the expiration of the President’s TPA authority in mid-2007.
The Hong Kong (HK) declaration (adopted on December 18, 2005) deals with all three pillars of
the agricultural negotiations—export competition, domestic support, and market access—and also
with the controversial issue of the nature and pace of reform of trade-distorting cotton subsidies
in the United States and other developed countries. Most progress was made in negotiations on
the export competition pillar with an agreement on a specific end date for the elimination of
export subsidies, but difficult negotiations remained on establishing new disciplines for other
forms of export competition. Detailed negotiations were not carried out for domestic support and
market access.
As throughout the Doha agricultural negotiations, trade-distorting domestic support and market
access, especially how to deal with access for import-sensitive products and special products,
remain the thorniest issues. Some agreement was reached on how to deal with export subsidies
and market access for cotton, but this issue still pits the United States, which argues for handling
the reduction of trade-distorting support for cotton within the domestic support pillar, against the
cotton-producing African countries who insist on an early harvest of reductions in cotton support.
The most concrete outcome of the Hong Kong Ministerial was an agreement to eliminate
agricultural export subsidies by the end of 2013. The European Union (EU), the largest user of
export subsidies, had opposed setting an end date, maintaining that WTO members needed to
determine first how other forms of subsidized export competition—export credit programs,
insurance, export activities of State Trading Enterprises (STEs), and food aid—would be
disciplined. The United States and Brazil, among others, had been demanding an end to such
export subsides by 2010 to be followed by negotiations on other forms of export completion. As a
compromise, the HK declaration calls for the parallel elimination of all forms of export subsidies
and disciplines on measures with equivalent effect by the end of 2013. The end date will be
confirmed, however, only after the completion of modalities for the elimination of all forms of
export subsidies.
With respect to other forms of export competition, the HK declaration included the following.
• Export credit programs should be “self-financing, reflecting market consistency,
and of a sufficiently short duration so as not to effectively circumvent real
commercially-oriented discipline;”
• On exporting STEs, disciplines will be such that their “monopoly powers cannot
be exercised in any way that would circumvent the direct disciplines on STEs on
export subsidies, government financing, and the underwriting of losses.”

• On food aid, a “safe box” will be established for “bona fide” food aid “to ensure
there will be no impediment to dealing with emergency situations.” However,
disciplines will be established on in-kind food aid, monetization, and re-exports
to prevent loopholes for continuing export subsidization leading to elimination or
displacement of commercial sales by food aid.
On trade-distorting domestic support, WTO members agreed to three bands for reductions, with
the percentages for reducing support in each band to be decided during the modalities
negotiations. The EU would be in the highest band and be subject to the largest reduction
commitments, while Japan and the United States would be in the middle band. (The U.S. proposal
would have subjected Japan to a higher percentage cut of its domestic support.) All other WTO
members, including developing countries, would be in the bottom band.
The HK declaration states further that “the overall reduction in trade-distorting domestic support
will still need to be made even if the sum of the reductions in the three categories of trade-
distorting support—amber box, blue box, and de minimis—would otherwise be less than the ¹¹
overall reduction requirement.” (This appears intended at ensuring that the United States does
not engage in box shifting to maintain its current spending levels.)
The HK declaration calls for four bands for structuring tariff cuts, with the relevant band
thresholds and within-band reduction percentages to be worked out during modalities
negotiations. The treatment of sensitive products (those to be exempted from formula tariff
reductions) was also left to modalities negotiations. A preliminary draft of the declaration would
have required WTO member countries to ensure that, for sensitive products, the greater the
deviation from agreed tariff reduction formulas, the greater would be the increase in tariff rate
quotas. The extent to which tariff rate quotas for sensitive products are expanded remains a key
determinant of the market access gains that would result from the Round.
The HK declaration also ensured that developing countries would have two privileges not
otherwise available to developed countries: (1) the right to self-designate a number of tariff lines
to be treated as special products (with lower cuts in tariffs) based on certain criteria—food
security, livelihood security, and rural development; and (2) the ability to impose a special ¹²
safeguard mechanism (SSG) on imports based on both import quantity and price triggers.
On cotton, the HK declaration reaffirms the commitment (made in the July 2004 framework
agreement discussed below) to ensure an explicit decision on cotton “within the agriculture
negotiations and through the Sub-Committee on Cotton expeditiously and specifically.” The HK

¹¹^S^ee^A^p^pe^nd^ix^C^f^o^r^de^fⁱ^niti^ons^of^the^s^e^te^r^m^s^.
¹²^S^S^G^{s are p}^r^esen^t^l^y^avai^l^a^b^l^{e t}^o^al^l^W^T^O^me^m^b^{ers (n}^o^t^j^u^st^d^e^vel^o^pⁱⁿ^g^couⁿ^t^ri^{es) t}^h^at^h^a^{ve t}^h^em^lⁱ^s^t^e^dⁱⁿ^t^h^ei^r
^c^ountr^y^s^c^he^dule^s^{. Se}^e^C^R^S^R^e^po^r^t^R^L³²⁹^16,^Agric^u^ltureⁱⁿ^t^h^e^W^T^{O: Polic}^y^C^o^mmitmeⁿ^{ts M}^ade^Unde^{r the}
^A^g^reemen^t^oⁿ^A^g^ri^cul^t^u^re^.

declaration calls for developed countries to eliminate all forms of export subsidies on cotton in
2006. This coincides with the United States’s elimination of its Step 2 program for cotton by
August 1, 2006, as contained in the 2006 budget reconciliation act (P.L. 109-171, the Deficit
Reduction Act of 2005). Step 2, which compensates U.S. millers and exporters for using high-¹³
priced American cotton, was declared in violation of WTO rules in the Brazil-U.S. cotton case.
On cotton market access, the HK declaration calls on developed countries to give duty and quota
free access to cotton exports from least-developed countries (LDCs) from the beginning of the
implementation of a Doha Round agreement. Not agreed to, but certain to be revisited during the
modalities negotiations in 2006, was a provision that “trade-distorting domestic subsidies for
cotton should be reduced more ambitiously than under whatever general formula is agreed and
that it should be implemented over a shorter period of time” than for other commodities.
Two other provisions in the HK declaration touch on agriculture. One is a provision in the
declaration calling for balance between agricultural and non-agricultural market access (NAMA)
modalities. The HK declaration recognizes that it is important to advance the development
objectives of the Round through enhanced market access for developing countries in both
agriculture and NAMA. As a result, the HK declaration calls for a “complementary high level of
ambition” in market access for both these components of the round. Second, in a departure from
special and differential treatment, the HK declaration calls for all developed countries, and
developing countries in a position to do so, to provide duty-free and quota-free market access for
products originating from LDCs, with some exceptions, by 2008 or no later than the beginning of
the implementation period.

On October 10, 2005, the United States offered a detailed proposal with specific modalities (i.e.,
schedules, formulas, and other criteria for implementing tariff and subsidy reduction rates and
other aspects of the reform) for the adoption of new disciplines on the three major agricultural
reform pillars—export competition, domestic support, and market access—in the ongoing round
of WTO multilateral trade negotiations. The U.S. proposal appeared to break a negotiations log-
jam as it was followed closely in mid-October, by separate proposals for agricultural modalities
from three other major negotiating participants—the EU, the G-20 developing countries, and the
G-10, a group of mainly developed countries that are net importers of agricultural products. These
negotiating proposals revealed that wide differences exist, especially between the United States
and the EU, in the modalities proposed for market access, the most difficult issue encountered by
negotiators. (The proposals are examined below. See 0, Appendix B, and Appendix C at the end

¹³^Se^e^C^R^S^R^e^por^{t R}^S²²¹⁸^7,^Br^azil'^{s W}^T^{O C}^a^se^Agaⁱ^nst^the^U.^S.^C^o^tto^{n Pr}^ogr^am^:^{A Br}^ie^{f O}^v^e^r^vⁱ^e^w^{, by}^R^a^ndy
^Sc^hne^pf^.

of this report for a schedule of key events, a description of the various negotiating groups, and a
brief list of key WTO terms.)
During oversight and consultation with the Administration on the Doha Round agriculture
negotiations, Chairmen of both House and Senate Agriculture Committees expressed their views ¹⁴
on the kind of WTO agricultural agreement that would garner their support. According to the
chairmen, the four principles that should guide any WTO agreement are:
• Substantial improvement in real market access.
• Greater harmonization in trade-distorting domestic support.
• Elimination of export subsidies; and
• Greater certainty and predictability regarding WTO litigation.
Negotiations on the agricultural modalities in U.S. and other country proposals continued in
preparation for the Hong Kong WTO Ministerial during November and December, but as the
meeting approached, the negotiations appeared to have reached another impasse. The United
States, the G-20, and the CAIRNS group called for the EU to improve and resubmit its offer on
market access because it was not as extensive as its current reform proposals for domestic support
and export competition, and thus provided insufficient bargaining room. The EU (with at least
partial backing from the G-10 and India) claimed that it was unable to improve its market access
offer without some formal proposals from other countries on reform in the non-agricultural trade
sectors—primarily services and industrial goods.
With the prospect of little movement at Hong Kong under prevailing circumstances (e.g., limited
time to bridge U.S.-EU-developing country differences and internal EU-country disagreements
over the nature of the EU’s offer), news reports surfaced about scaled-back ambitions for the ¹⁵
Hong Kong Ministerial. In the draft ministerial declaration for the Hong Kong meeting, the
WTO Director General Pascal Lamy suggested that, rather than agreeing on modalities, trade
ministers set deadlines for establishing modalities and agreeing to schedules of concessions, both ¹⁶
before the end of 2006.
The four major DDA negotiating proposals for agricultural modalities are from the United States,
EU, G-20, and the G-10. Each proposal (described below) varies in terms of its degree of
specificity for each of the three negotiating pillars. Tables 1 and 2 summarize domestic policy
reforms and market access reforms, respectively, under each of the negotiating proposals.
Export competition negotiations were facilitated by the EU’s July 2005 pledge to end export
subsidies (conditioned on parallel treatment of other forms of export subsidies). Domestic support
disciplines hinge primarily on commitments by three countries: the United States, the EU, and
Japan. In contrast, market access has been the most difficult issue, especially for the EU and the

¹⁴^L^e^tte^r^{to the}^H^o^nor^a^b^le^R^o^b^Por^t^m^a^{n, U}^.^{S. T}^r^a^d^e^R^e^pr^e^s^eⁿ^ta^tiv^e^,^O^c^{t. 6,}²⁰^05,^f^r^om^Se^na^tor^Sa^x^b^y^C^h^a^m^blis^s^,
^C^h^aⁱ^r^m^aⁿ^of^the^Se^na^te^C^o^m^m^itt^e^e^{on A}^g^rⁱ^c^u^ltur^e^{, N}^u^trⁱ^tio^{n a}ⁿ^d^For^e^s^t^r^y^{, a}^{nd R}^e^pr^e^s^eⁿ^ta^tiv^e^B^ob^G^oodla^tte^,
^Ch^ai^rm^an^,^Ho^u^s^{e Co}^mmⁱ^t^t^{ee o}ⁿ^Agri^cu^l^t^u^re.
¹⁵^“^A^L^e^s^s^A^m^bitious^H^ong^K^o^ng^C^onf^e^r^eⁿ^c^e^,^”^W^a^s^h^ingt^{on Tr}^a^d^e^D^a^ily^{, v}^o^l.¹⁴^{, n}^o^.²²^{2, N}^o^v^.⁹^,²⁰⁰⁵^.
¹⁶^T^h^e^dra^f^t^mⁱ^nis^t^e^r^ia^{l te}^x^t^is^a^v^aⁱ^l^a^ble^a^t^htt^p^://w^w^w^.^w^to.org^/e^ng^lis^h/^the^w^to_e^/m^inis^t_e^/^mⁱ^n05_e^/dra^f^t^_te^x^t_e^.^htm^.

G-10, but also for the G-20. The EU’s latest offer on market access (October 27, 2005)—average
tariff cuts of 35%-60% coupled with extensive protection for “sensitive products”—falls short of
the “level of ambition” of the G-20 proposal which proposes tariff cuts of 45%-75% and limited
protection for “sensitive products.”
The U.S. modalities proposal of October 10, 2005, is credited with unblocking stalled modalities
negotiations. It addressed domestic support and market access with specifics for the first time,
and put the EU on the defensive especially on market access. It proposes a three-stage reform:
five years of substantial reductions in trade-distorting support and tariffs, followed by a five-year
pause; then five more years to phase-in total elimination of all remaining trade-distorting
domestic measures and import tariffs.
• Eliminate all agricultural export subsidies.
• Establish disciplines for export credit guarantees, STEs, and food aid.
• Cut the U.S. amber box bound by 60% based on 1999-2001 period.
• Reduce the EU and Japanese amber box bounds by 83%.
• Reduce overall level of trade-distorting support by 75% for EU, and by 53% for
the United States and Japan.
• Cap blue box spending at 2.5% of value of production.
• Cut de minimis exemptions to 2.5% of value of production (for both total and for
specific products).
• Maintain green box criteria without caps.
• Establish a new peace clause to protect domestic supports against WTO
litigation.
• Cut highest tariffs by 90%; cut other tariffs in a range of 55%-90%.
• Cap the maximum agricultural tariff at 75%.
• Limit sensitive products to 1% of tariff lines.
• Expand TRQs: i.e., larger quotas with lower tariffs.
• SDT for developing countries (TBD), but cap maximum developing country
agricultural tariff at 100%.

U.S. domestic support commitments are conditioned on “ambitious” market access proposals
especially from the EU and the G-20.
Under pressure from France and 12 other EU countries (but not a qualified majority) not to
improve its offers, the EU made a new market access proposal on October 27 and provided
additional detail on its proposal for domestic support, export competition, and Geographical
Indications (GIs are place names associated with particular products). The EU’s “level of
ambition” in market access does not reach that of the G-20 or the United States. A major criticism
of the EU’s agricultural proposal is that its market access offer does not provide an inducement
for developing countries like Brazil, Thailand, or other G-20 members to make concessions in
non-agricultural market access or services. The United States and G-20 countries continue to
pressure the EU to offer further concessions on agricultural market access.
• Eliminate all agricultural export subsidies, contingent on “parallel” disciplines
for export credits, food aid, and STEs by 2012.
• Establish a “short-term self-financing principle” for credits: programs must
demonstrate that they charge adequate premiums to ensure self-financing.
• STEs: eliminate price-pooling, anti-trust immunity, direct and indirect
preferential financing, and preferential transport services; and eliminate single-
desk selling.
• Food Aid: phase out food aid that leads to commercial displacement but maintain
commitments to adequate food aid levels; move gradually to untied and in-cash
food aid; permit in-kind food aid only in exceptional, emergency situations under
agreed criteria.
• Reduce the EU’s amber box ceiling by 70% (in line with already established EU
spending limits); reduce the U.S. amber box ceiling by 60%.
• Base amber box product-specific caps on the Uruguay Round implementation
period of 1986-88.
• Reduce the de minimis exemptions ceiling by 80% of the Framework’s proposed

5% cap (i.e., establish a cap of 1% of the value of total production).

• Blue box: freeze the existing price difference between linked price support prices
and limit the price gap to a percentage of the base price difference.
• Reduce overall trade-distorting support in three bands: 70% (EU), 60% (U.S.),
and 50% (rest-of-world).
• Maintain the green box without limits.

• Reduce the highest tariffs by 60%; cut other tariffs in a range of 35%-60%.
• Reduce the number of sensitive products to 8% of tariff lines (given the EU’s
approximately 2,200 tariff lines this would result in about 176 protected tariff
lines for the EU).
• Apply both tariff cuts and expanded TRQs to sensitive products.
• Cap the maximum agricultural tariff for developed countries at 100% (but with
no cap for sensitive products).
• Keep the SSG available for both developed and developing countries.
Specifically, the EU wants the SSG to be available for beef, poultry, butter, fruits
and vegetables, and sugar.
• Extend protection available to wines and spirits under Article 23 of TRIPS to all
products, while leaving existing trademarks unaffected.
• Establish a multilateral system of notification and registration of GIs, open to all
products, with legal effect in all Member countries not having lodged a
reservation to the registration.
• Use of well-known GIs on a short list should be prohibited, again subject to
existing trademark rights.
• Establish higher tariff bands, lower tariff cuts, and a maximum tariff of 150% for
developing countries.
• No tariff cuts for the 32 WTO-member LDCs.
• NAMA: agreement before Hong Kong on a progressive formula that cuts into
applied tariffs for manufactured products.
• Services: agreement at Hong Kong to establish mandatory country targets for
services trade liberalization.
• Rules: Negotiate before the Hong Kong Ministerial meeting a list of issues to be
resolved including antidumping.
• Development: prepare for Hong Kong a Trade Related Assistance package for
developing countries and extend tariff and quota free access to all LDCs no later
than the conclusion of the DDA.

The G-20 proposal on market access reflects differences between Brazil, an agricultural exporter,
and India, an agricultural importer.
• Eliminate all forms of export subsidies over five-year period.
• New food aid disciplines should not compromise emergency humanitarian
assistance.
• Cut the bound for overall trade-distorting domestic support in three bands: >$60
billion, 80%; $10-$60 billion, 75%; and $0-$10 billion, 70%.
• Cut the amber box ceiling in three bands: >$25 billion, 80%; $15-$25 billion,

70%; and $0-$15 billion, $60%.

• Reduce de minimis exemption allowances so as to meet the cut in the overall
bound.
• Address the cotton issues no later than the Hong Kong Ministerial meeting.
• Cut developed country tariffs by 45%-75%; cut developing country tariffs by

25%-40%.

• Cap the developed country maximum agricultural tariff at 100%, developing
country maximum tariff at 150%.
• Limit the number of sensitive products; compensate for designation as sensitive
with a combination of tariff cuts and expanded TRQs.
• Maintain Special Safeguard Mechanism (SSG) for developing countries;
eliminate SSG for developed countries.
• Address issue of preference erosion for developing countries with expanded
access for LDCs and trade capacity building.
• Special & Differential Treatment (SDT): exempt LDCs from reduction
commitments.
The G-10 is a group of mainly developed, net-agricultural importing countries led by Japan,
Norway, and Switzerland. The G-10 has tabled proposals on market access and domestic support,
but not on export competition. The G-10 takes a relatively “defensive” posture on market access
that calls for lower tariff reductions and a larger number of sensitive products than do other
proposals.

• Reduce agricultural tariffs by 27% to 45% for most products.
• The number of sensitive products would be 10% of tariff lines with linear cuts
within tiers, 15% of tariff lines would have flexibility for within-tier adjustments.
• There would be no cap on the highest agricultural tariff allowed.
• Reduce the amber box ceiling by 80% for support >$25 billion; by 70% for
support in the $15-$25 billion range; and by 60% for support <$15 billion.
• Reduce the overall support ceiling by 80% for support >$60 billion; 75% for
$10-$60 billion; and 70% for support <$10 billion.
• Blue box and de minimis spending are not addressed.
The G-33 is an alliance of 42 developing countries including larger countries like China and
India, but also least-developed countries like Benin and Zambia. The G-33 calls for the following.
• 20% of tariff lines of developing countries to be designated as Special Products
(those deemed essential for food security, rural development, and other factors).
• 50% of the tariff lines so designated would be exempt from any tariff reduction
commitment.
• An additional 15% of designated tariff lines would be exempted from tariff
reductions if there are “special circumstances” (e.g., low bound tariffs, high
ceiling bindings, high proportion of low income or resource poor producers.
• A further 25% of designated special products would be subject only to a 5%
reduction in bound tariff rates while the remaining tariff lines would be subject to
cuts no greater than 10%.

Table 1. Comparison of Proposals for Domestic Policy Reform: U.S., G-20, EU, and G-10
^Developing
^{Highest Ti}^er²^nd^Tier³^rd^Tier^{Countries LDCs}
^{U.S. Proposal}^a^{EU, Japan}^U.S.^{Other Developed}
^{Amber Box Cuts}^{83% 60%}^37%^n.s.^n.s.
^{—De Minimis cuts}^{Bound at 2.5%}^{of TVP}^{Bound at 2.5%}^{of TVP}^{Bound at 2.5%}^{of TVP}^n.s.^n.s.
^{—Blue Box Ceiling}^{Bound at 2.5%}^{of TVP}^{Bound at 2.5%}^{of TVP}^{Bound at 2.5%}^{of TVP}^n.s.^n.s.
^{Overall Ceiling Cuts}^{75% (}⁵³^%^Japaⁿ⁾^53%^31%^n.s.^n.s.
^G-^{20 Proposal}^{EU, Japan}^U.S.^{Other Developed}
^{Amber Box Cuts}^b^{80% 70%}^60%^n.s.^n.s.
^{Overall Ceiling Cuts}^b^{80% 75%}^n.s.^n.s.^n.s.
^{EU Pro}^posal^{EU (Japa}^n?)^{U.S. (Japan?)}^{Other Developed}
ⁱ^{ki/CRS-RL33144}^{Amber Box Cuts}^c^{70% 60%}^50%^n.s.^No^cuts
^g/w^{Overall Ceiling Cuts}^{70% 60%}^50%^n.s.^No^cuts
^s^.or
^le^ak^{—De Minimis cuts}^{Bound at 1% of TVP}^{Bound at 1% of TVP}^{Bound at 1% of TVP}^n.s.^{No cuts}
^://wiki^{—Blue Box Ceiling}^{Bound at 5% of TVP}^{Bound at 5% of TVP}^{Bound at 5% of TVP}^n.s.^{No cuts}
^h^ttp^{G-10 Proposal}^{EU, Japan (}^$²⁵⁺⁾^{U.S. ($15 - $25)}^{Other Developed ($}^{0 - $}¹⁵⁾
^{Amber Box Cuts}^{80% 70%}^60%^n.s.^n.s.
^Source:^Assem^{bled by CRS fro}^{m various new}^{s releases of t}^{he U}^{STR and World Trade Online.}
^{n.s. = not specified}
^a.^{The U.S. proposes different value}^ranges^{for ambe}^{r box}^{and overal}^{l ceilings; however, the within-tier count}^{ry composition remai}^ns^u^ncha^{nged u}^{nder the}^different
^{ranges: 1}^st^tier:^{EU and Ja}^pan;²^nd^{tier: U.S}^{.; 3}^rd^{tier: rest-of-world}^.
^b.^{The G-2}^{0 is also calling for produ}^{ct-specific caps}^{both in t}^{he overal}^{l AMS and the Blue Box.}
^c.^{The EU also proposes}^{commodity-specific amber}^box^spe^{nding limits.}

Table 2. Doha Round Negotiations Market Access Proposals: G-10, G-20, EU, and U.S.
^{Developed Countries}^G-10^G-20^EU^{United Stat}^es^a
^s^{Tiers %}^Linear^flexibil^ity^{Tiers %}^Linear^{Tiers %}^Linear^{Tiers %}^Progressive
¹^{0 ≤}²⁰^27%^32%^{± 7}^%^{0 ≤}²⁰^45%^{0 ≤}³⁰^35%^(20%-4^5%)^b^{0 ≤}²⁰^55-6^5%
²^{> 20}^{≤ 5}⁰^31%^36%^{± 8}^%^{> 20}^{≤ 5}⁰^55%^{> 30}^{≤ 6}⁰^45%^{> 20}^{≤ 4}⁰^65-7^5%
³^{> 50}^{≤ 7}⁰^37%^42%^{± 9}^%^{> 50}^{≤ 7}⁰^65%^{> 60}^{≤ 9}⁰^50%^{> 40}^{≤ 6}⁰^75-8^5%
⁴^{> 70}^45%^50%^{± 1}^0%^{> 70}^75%^{> 90}^60%^c^>⁶⁰^85-9^0%
^{ap %}^{No Cap}¹⁰⁰^%¹⁰⁰^{% (no ca}^{p for se}^{ns. prod.)}^75%
^u^t^25-3^{0% 54%}^46%⁽³⁹^%⁾^d^75%
^15%^{w/linear cuts;}^{1% of total tariff lines and}^{8% of tariff}^line^e^{1% of total tariff lines}
^{10% w/flex}^c^uts^{subject to ca}^pping
^{Minimum acce}^{ss level = 6}^%^{Small T}^{RQ expan}^{sion on small}^Expa^{nded TRQs}
^{of ann}^{ual domestic cons in}^f^{# of products}^g
ⁱ^{ki/CRS-RL33144}^{base pe}^riod.
^g/w^{Not defined}^{Not defined}^{Not defined}^{Not defined}
^s^.or
^le^ak^{nism (SSM)}^{Limited to developing}^{Available for all members}
^countries^{for selected commodities}
^://wiki^{hical Indic}^{ators (GIs}⁾^Exte^{nd TRIPS, Art.23}^{Existing tradema}^rk
^h^ttp^{to all products}^h^{laws are suf}^ficient.
^G-10^G-20^EU^{United Stat}^es^a
^{More flexibility on sensitive}^{2/3 trea}^{tment in}^{tiers ;}^{Higher th}^{resholds for top tiers;}^{Slightly smaller cuts and longer p}^hase-in^ment
^products.^{≤ 2/3}^treatme^{nt in c}^uts^{2/3 lower in c}^uts^periods
^{Tiers %}^{Linear flexibility}^{Tiers %}^Linear^{Tiers %}^Linear^{Tiers %}^Progressive
¹^{0 ≤}³⁰^27%^32%^{± 7}^%^{0 ≤}³⁰^{< 30}^%^{0 ≤}³⁰^{25% (}^10-4^0%)^b^{0 ≤}²⁰^TBD
²^{> 30}^{≤ 7}⁰^31%^36%^{± 8}^%^{> 30}^{≤ 8}⁰^{< 40}^%^{> 30}^{≤ 8}⁰^30%^{> 20}^{≤ 4}⁰^TBD
³^{> 70}^{≤ 1}⁰⁰^37%^42%^{± 9}^%^{> 80}^{≤ 1}³⁰^{< 50}^%^{> 80}^{≤ 1}³⁰^35%^{> 40}^{≤ 6}⁰^TBD
⁴^{> 10}⁰^45%^50%^{± 1}^0%^{> 13}⁰^{< 60}^%^{> 13}⁰^40%^{> 60}^TBD
^{ap %}^{No Cap}¹⁵⁰^%¹⁵⁰^%¹⁰⁰^%
^{Not defined}^{1.5% of total tariff lines}^{Not defined}^{Not defined}

^{veloped Countries}^G-10^G-20^EU^{United Stat}^es^a
^{Not defined}^{Same as EU plu}^{s exe}^mption^{All devel}^{oped countries s}^hould^{Not defined}
^{from tariff red}^uction^{allowfull duty-free access for}
^commitments.^EBA.
^Source:^Assem^{bled by CRS fro}^{m USTR, EC, and World}^{Trade Online news}^{releases. Data are a}^s^{of October}^28,²⁰^05.
^Notes:
^{EBA = Eve}^rything^{But Ar}^{ms (i.e.,}^{all products exce}^{pt weapo}^{nry a}ⁿ^d^munitions).
^{TBD = To Be Determined.}
^{TRQ = Tariff Rate Quota. This in}^{volves a quota level (TBD) within}^{which all imports ente}^{r duty-f}^re^{e or subject to a}^{minimal tar}^{iff du}^{ty (TBD). A}^{ll over-quota imports are}
^{subject to a}^{higher (often}^prohibi^{tive) duty (TBD). Greater market}^{access (or greate}^{r TRQ) is achieved by raising t}^{he q}^{uota lev}^{el and reducing t}^{he over-q}^{uota tariff ra}^te.
^a.^{The U.S. has proposed ap}^{plying t}^{he set of tiered tariff}^cuts^describ^{ed below during the}¹^st^five-yea^r^{period of implementation; to be f}^oll^{owed by a period of stability}^nd^rd
^{during the}^ne^{xt (2}^{) five years; t}^{hen totally eliminating tariffs duri}^{ng the}³^five-year^{period. This same reduction-stability-eliminati}^oⁿ^seq^uen^{ce would be a}^{pplied to}
^{trade-distorting domestic suppor}^{t as well.}
^b.^{The EU p}^{roposes additional FLEXIBILITY be given}^{for tariff c}^uts^{within the lowest tier (0-3}^{0%) s}^u^{ch that}^{the tier’s overall ave}^rage^{cut of 3}^{5% (}^25%^{for developing}
ⁱ^{ki/CRS-RL33144}^{countries) is still respected, but}^t^{hat within tier c}^{uts may}^vary^bet^{ween 2}^{0% to}^45%⁽¹⁰^{% to 4}^0%).
^g/w^c.^{The EU ha}^{s ex}^press^{ed a willingness to consider 70}^{% c}^{uts for t}^{he t}^{op tier of tariffs.}
^s^.or^d.^{The EU estimates t}^{he ave}^{rage tar}^{iff cut, according to its proposed}^{tier/tariff reduction form}^{ula, would be 46}^{% across all tarif}^{f lines. H}^{owever, USTR suggests that a}
^le^ak^{more accurate}^{estimate would b}^e³⁹^{%. Since the ave}^{rage tariff c}^u^t^{across all tariff lines must also c}^{onsider the level of prote}^{ction p}^r^{ovided by TRQs for sensitive}
^{products, it would appear}^{that t}^h^e^{EU’s estimated average tarif}^{f cu}^{t of 46}^{% grossly overstates t}^{he tr}^{ue average a}^s^{it appa}^rentl^{y ignore}^{s the large degree}^{of protection}
^://wiki^{provided by allowing 8% of tariff l}^{ines to hide behind TRQs. (See n}^{ext footnote.)}
^h^ttp^e.^{The EU ha}^{s ap}^{proximately 2,2}⁰⁰^{8-digit tariff lines. An 8% limit on sensitive products}^{would imply a maximum of a}^bout¹⁷^{6 sen}^si^{tive products to b}^e^su^{bject to TRQs}
^{with expa}^{nded market a}^{ccess. Th}^{e EU cu}^rre^{ntly has}³⁰^{0 to 4}^{00 ta}^{riff lines covered by}^{TRQs u}^nder^{the Urug}^{uay Rou}^{nd Agreeme}^{nt. Th}^{e EU s}^{uggests t}^{hat su}^{ch a large}
^num^{ber of se}^{nsitive product}^{s is n}^{ecessary to ac}^{hieve both}^protecti^{on for its agricultural sector}^{while allowing for substantial}^{tariff c}^u^{ts across u}ⁿ^p^{rotected tariff line}
^{items. Furthermore, t}^{he EU s}^tate^{s that its se}^{nsitive products, altho}^ugh^nume^{rous, would be str}^uct^ur^{ed to allow for “substantial}^incre^{ases in market}^{access t}^{hat would}
^{nonetheless s}^{till be lower than t}^h^{at granted b}^y^the^res^{ult of the f}^{ull tariff cut.”}
^f.^{The G-2}^{0 p}^{roposes that}^{no new}^{tariff-rate q}^{uotas (apart}^{from exis}^{ting TRQs agreed to under}^{the U}^ruguay^{Round’s Agreeme}^{nt on A}^g^r^{iculture) be}^{created for}
^{products designated as}^{sensitive, and it calls for a maximum deviati}^{on from the}^{tariff red}^{uction form}^{ula of 30}^{%. It said existi}^{ng TRQs}^{on developed country}^sensitive
^{products s}^{hould at least be e}^xpa^{nded so that a minimu}^{m access}^{level is increased to a level equivalent to 6%}^{of an}^{nual domestic}^con^sumption.
^g.^{The EU p}^{roposal calls for the pos}^{sibility of new TRQs. In addition i}^t^{recommends a TRQ for}^{mula linking the}^{quota increa}^{se to th}^{e lev}^{el of tariff reduction, proposing}
^{that the}^{quota inc}^{rease is: [(Nor}^{mal tariff cut) -}^(ap^{plied cut)] / [(import p}^{rice) + (ad valorem for t}^{hat tariff line)] * (0.8). At the}^sam^{e stage ther}^{e should b}^e^{a minimu}^m
^{tariff reduction in ea}^{ch of t}^he^ban^{ds of 5%, 1}^{0%, 1}^{5%, and}^{20%, re}^s^pectively.
^h.^{EU proposes}^that^GIs^{receive the}^{same protection as a}^{trade mark}^{in line with protection c}^urre^ntly^{available for wine and spiri}^{ts u}ⁿ^d^{er Article 23 of TRIPS agreeme}^nt^.
^{For products with e}^{xisting trade}^{mark protection t}^{hat would othe}^{rwise be invalidated by G}^I^p^{rotection elsewhere, Article 24 of}^TRI^{PS would be adjusted such t}^hat
^{existing trade marks}^{would not b}^e^{affected. The EU}^{considers this}^{a major concession.}

Table 3. U.S. Domestic Spending Limits and Outlays: Current Status, Framework Agreement, and U.S. Reform Proposal
^{Current Outlays}
^Current^Framework^U.S.
¹⁹⁹^5-20⁰¹^a²⁰⁰⁵^b^{WTO Limits}^Propos^al^Propos^al
^{US$ Billion}^Status^{US$ Billion}^Status^{US$ Billion}^Status^{US$ Billion}
^ling^Unbound^{20% i}^{nitial cut; furt}^{her c}^uts^{Bound and su}^{bject to cuts}^that
^{$16.3 $19.1}^{(due to blue box)}^—^{implemented gradually. Final}^~$4^5.4^{vary based on}^{level of domestic}^~$2³
^{total cut TBD}^sup^{port (}^{Table 3}^).
^{Separate Bound}^{20% i}^{nitial cut; furt}^{her c}^uts^{Tiered; subject to sub}^stantial
^{$11.0 $12.7}^{for each cou}^ntry^$19.1^{implemented gradually; with}^{product-specific A}^{MS caps TBD.}^$15.4^c^{cuts du}^{ring 1}^st^{five years; sta}^ble^{for 2}^nd^{five years; t}^hen^eliminated^$7.6
^{in 3}^rd^five-years.^d
^{$ 1.0}^{$ 0.0}^Unbound^—^{Bound TBD but <}^{5% of TVP}^~$1⁰^{Bound at 2.5%}^{of TVP}^~$5
^{$ 4.2}^{$ 6.2}^{Bound at 5% of TVP}^~$1⁰^{Bound TBD but <}^{5% of TVP}^~$1⁰^{Bound at 2.5%}^{of TVP}^~$5
ⁱ^{ki/CRS-RL33144}^{$ 0.1}^{$ 0.1}^{Bound at 5% of SCVP}^~$1⁰^{Bound TBD but <}^{5% of SCVP}^~$1⁰^{Bound at 2.5%}^{of SCVP}^~$5
^g/w
^s^.or^$49.9^—^Unbound^{— Unbound}^{— Unbound}^—
^le^ak
^Source:^Assem^{bled by CRS fro}^{m news}^{releases of various sou}^rc^{es. For a detailed description of}^{U.S. d}^{omestic spending by}^{category for bo}^t^h^{commitments a}^{nd act}^ual
^://wiki^{outlay notifications, see CRS Rep}^{ort RL30}⁶¹^2,^{Agriculture in the W}^{TO: Member Spending on Domestic}^Support^{, by Randy Schn}^epf.
^h^ttp^Notes:
^{AMS = Aggregate}^Measu^{re of (tr}^{ade-distorting domestic}^{) Support}^{as defined in the}^Agreeme^{nt on}^Agriculture.
^{TBD = To Be Determined.}
^{TVP = Total}^{Value of agricultural Production for all commodit}^ies.
^{SCVP = Tota}^{l Value of agricultural Production for a Specific Commodity.}
^a.^{Average for}¹⁹^95-2⁰⁰^{1 pe}^{riod for which official WTO notification data is available.}
^b.^{Estimate for 2}⁰⁰⁵^{period based on CRS calculations from various}^{USDA projections.}
^c.^{Reflects only the 2}^{0% initial cut.}
^d.^{The three}^{five-year p}^{eriod phase}^{out would apply to all trade-disto}^{rting domestic sup}^{port and ta}^riffs^{(including safeguard m}^ech^a^nisms^).

Among the unresolved issues going into the Hong Kong Ministerial was the so-called African
Cotton Initiative. Four least-developed African countries—Benin, Burkina Faso, Chad, and
Mali—proposed (May 2003) a sectoral initiative for cotton that would entail the complete ¹⁷
elimination of export subsidies and trade-distorting domestic support by all WTO members.
Although not specifically mentioned in the Doha Round negotiating mandate, cotton was
identified as a key to a successful conclusion of the Doha Round following the Cancun
Ministerial in September 2003. A preliminary agreement on a “framework” for the Doha Round
negotiations reached in July 2004 (see detailed discussion below) also recognized the importance
of cotton for certain developing countries and stated that cotton will be “addressed ambitiously, ¹⁸
expeditiously, and specifically” within the agriculture negotiations. In addition, the Framework
called for the establishment of a “Cotton” Sub-Committee (established on November 19, 2004) to
deal with the initiative.
Going into the Hong Kong meeting, there were two main proposals for dealing with the trade-¹⁹
related aspects of the sectoral initiative on cotton. One was a revised proposal from the African
group and the second was an EU proposal. Both called for decisions to be made at the Hong
Kong Ministerial. The African proposal called for export subsidies on cotton to be eliminated by
the end of 2005. Trade-distorting domestic support would be completely eliminated by January 1,
2009, with 80% eliminated by the end of 2006 and 10% each in 2007 and 2008. The market
access aspects of the initiative would be addressed by duty-free and quota-free access for cotton
and cotton products from least-developed countries. An emergency fund would be established to
deal with depressed international prices. Additionally, this proposal called for technical and
financial assistance for the cotton sector in African countries.
The EU proposal called for the Hong Kong Ministerial to endorse more ambitious and faster
commitments on cotton than for agriculture as a whole. The EU provided details of its proposal
for cotton, but without assigning numerical targets, which is consistent with its position that Hong
Kong should not be about deciding numbers (i.e., actual modalities). For export subsidies, the EU
proposed an earlier end date for elimination. As to market access, the EU indicated its willingness
to eliminate all duties, quotas and other quantitative restrictions on imports from all countries. For
domestic support, the EU would eliminate all trade-distorting subsidies for cotton. The EU
indicated that all its cotton commitments “will already be in place, as far as the EU is concerned,
from 2006.”
The U.S. position on the cotton initiative has been that cotton should be dealt with as an integral
part of the agriculture negotiations. Thus cotton subsidy reductions or market access

¹⁷^{For a}^de^ta^ile^d^disc^ussioⁿ^of^theⁱⁿ^itia^tiv^e^,^se^e^{CRS Re}^por^{t RS}²¹⁷¹^2,^T^h^e^Afric^a^{n Co}^tto^{n I}ⁿ^iti^ativ^e^a^{nd W}^T^O
^Agrⁱ^c^u^lt^ur^e^N^e^goti^a^ti^ons^,^by^C^h^a^r^le^s^{E. H}^a^nr^a^h^aⁿ^.^T^h^e^or^ig^ina^l^pr^opos^a^l^,^W^T^{O Ne}^got^iati^ons^on^Agrⁱ^c^u^lture^{, P}^o^v^e^r^ty
^Re^duc^tio^n:^Se^c^t^or^{al I}ⁿ^iti^ativ^eⁱⁿ^Fav^our^{of C}^o^tt^on:^J^o^int^pr^o^pos^al^by^Beⁿⁱ^{n, B}^u^r^k^ina^Fas^o^{, C}^h^a^d^,^a^{nd M}^a^lⁱ^{, C}^o^m^m^itte^e
^{on A}^g^rⁱ^c^u^ltur^e^{, S}^p^e^cⁱ^a^l^Se^s^sⁱ^on^,^T^N^/^A^G^/^G^E^N^/^{4, Ma}^y^{16, 20}⁰³^{, w}^a^s^r^e^vⁱ^s^e^{d in W}^T^O^,^G^e^ne^r^a^{l C}^ounc^il,^P^o^vert^y
^Re^duc^tio^n:^Se^c^t^or^{al I}ⁿ^iti^ativ^e^oⁿ^C^o^tto^n:^W^o^r^dⁱⁿ^{g of}^Par^agr^a^p^h²⁷^of^the^Re^vⁱ^s^e^{d D}^r^a^{ft C}^a^nc^uⁿ^Mⁱ^nis^t^e^r^ial^Te^x^t^:
^C^o^m^m^unic^a^tio^{n fr}^om^Beⁿⁱⁿ^{, W}^T^/G^C^/^W^/^{516, O}^c^t^obe^r⁷^,²⁰⁰³^{. T}^h^e^s^e^doc^um^eⁿ^ts^c^aⁿ^be^r^e^tr^ie^v^e^{d f}^r^om
^http:^//www^.^w^to.org^.
¹⁸^P^a^r^a^g^r^a^{ph 1(}^b)^of^the^J^u^ly^Fr^am^ew^or^k^ag^r^e^em^eⁿ^{t a}^ddr^e^s^s^e^s^the^c^o^t^t^on^is^s^u^e^.
¹⁹^T^h^e^s^e^t^w^{o pro}^pos^a^l^s^a^r^e^re^vⁱ^e^w^{ed a}^t^t^h^e^W^T^O^w^e^bs^ite^a^t^htt^p^://w^w^w^.^w^to.org^/e^ng^lis^h/ne^w^s^_e^/ne^w^s^05_e^/
^c^o^tto^n_¹⁸^nov⁰⁵^_e^.h^tm^.

commitments would be made as part of an overall agreement on agriculture. A more ambitious
result for cotton, then, would depend on the underlying agriculture agreement. According to the
WTO summary of the cotton subcommittee meeting in which the initiative was discussed most
recently, the U.S. Deputy Trade Representative indicated that the United States agreed that the
outcome for cotton should be “more than the average” (i.e., the general outcome for ²⁰
agriculture).
The active participation of developing countries in the Doha Round distinguishes it from previous
multilateral trade rounds held under the auspices of the General Agreement on Tariffs and Trade
(GATT), the predecessor of the WTO. During the Uruguay Round, an agreement between the
United States and the EU on agricultural issues at Blair House in 1992 paved the way for a
successful conclusion of this last GATT round. However, a U.S.-EU joint proposal on agriculture
during the 2003 Cancun Ministerial meeting was greeted with strong opposition from a group of ²¹
developing countries. This group, led by Brazil, India, and China, known as the G-20, has
remained together since Cancun and is playing a key role in the Doha agricultural negotiations.
The G-20 was first among the major players in the Doha Round to offer a proposal on agricultural
modalities in advance of the Hong Kong meeting, and its proposal became a benchmark for
evaluating other, developed country proposals.
Not only the more advanced developing countries like the G-20 members, but also the least
developed countries (LDCs) are participating actively in the Doha negotiations. The African
Cotton Initiative (discussed above) is an example of the LDCs attempting to use multilateral trade
negotiations to accomplish their policy objectives. The LDCs also were instrumental in blocking
an overall agreement at Cancun when they rejected an EU proposal to enlarge the negotiating
agenda to include discussion of the so-called “Singapore issues” of trade facilitation, competition
policy, investment, and transparency in government procurement. Subsequent agreement to limit
negotiations of Singapore issues to just one—trade facilitation—was a victory for the LDCs.
A number of other issues are on the agenda of the Doha Round.²² These include negotiations to
reduce tariff and non-tariff barriers to trade in industrial products (referred to as non-agricultural
market access or NAMA negotiations), liberalization of trade in the services sector, reviews of
anti-dumping and countervailing duty measures and dispute settlement procedures, a number of
specific issues of interest to developing countries (for example, access to patented medicines,
implementation of existing WTO agreements, and changes in special and differential treatment
provisions), and trade facilitation (which refers generally to harmonizing and streamlining
customs procedures among WTO members).

²⁰^T^h^{e Af}^ric^aⁿ^an^d^EU^p^r^o^p^o^s^{als f}^o^{r a secto}^r^{al in}^itiativ^{e o}ⁿ^co^t^t^oⁿ^as^w^e^{ll as th}^{e U.S. reactio}ⁿ^{are also}^dⁱ^scu^ssedⁱⁿ
^“U.^S^.^Lⁱⁿ^k^{s Co}^t^t^oⁿ^-^S^p^eci^fⁱ^{c M}^o^{ves o}ⁿ^Overal^l^A^g^ri^cu^l^t^u^{re Deal}^,^”^Iⁿ^sⁱ^de^U^.^{S. Tr}^ade^{, N}^o^v^e^m^b^e^r^18,²⁰⁰^5.
²¹^Se^e^C^R^S^R^e^por^{t R}^L³²⁰⁵³^,^A^g^ric^u^ltureⁱⁿ^W^T^{O Ne}^g^o^tia^tio^ns^,^b^y^Ch^arl^e^{s E}^.^Han^r^ah^an.
²²^Se^e^C^R^S^R^e^por^{t R}^L³²⁰⁶⁰^,^Wo^rl^d^T^r^ad^{e Org}^aⁿⁱ^zatⁱ^oⁿ^Nego^tⁱ^a^tⁱ^oⁿ^s^{: T}^h^{e D}^o^ha^Devel^o^p^m^en^t^A^g^end^a^{, f}^o^{r a}ⁿ
^ov^e^r^vⁱ^ew^of^D^oha^R^oun^{d ne}^g^o^tia^tⁱ^ng^is^s^u^e^s^.

If DDA negotiations result in a trade agreement by the end of March 2007, then Congress would
presumably take up legislation to implement it under trade promotion authority (TPA), or fast-
track, procedures (Title XXI of P.L. 107-210). Under fast-track, if the President meets the trade
negotiating objectives established in the legislation and satisfies consultation and notification
requirements in P.L. 107-210, then Congress would consider legislation to implement a trade
agreement with limited debate, no amendments, and with an up-or-down vote. However, unless it
is extended by Congress, TPA only covers trade agreements signed by July 1, 2007. As such, TPA
expiration is the effective deadline for U.S. participation in the Doha Round and for congressional
consideration of implementing legislation. Congress could, of course, vote to extend TPA
authority if it thought that progress was being made in Doha Round negotiations or for the
purpose of considering promising bilateral free trade agreements.
How a Doha Round agreement on agriculture would affect the preparation of the next farm bill is
uncertain. TPA expiration coincides with the expiration of the 2002 farm bill (P.L. 107-171) on
September 30, 2007. Farm bill changes may be needed to meet U.S. commitments in a final DDA
agreement on agriculture. Most farm bill programs expire in 2007, and new legislation is already ^th
under consideration in Congress. Legislation was introduced in the 109 Congress to extend the

2002 farm bill for a year pending completion of the Doha Round negotiations (H.R. 4332, H.R.

4775, and S. 2696). But with uncertainties surrounding the completion of the Doha Round,

supporters of extending the farm bill contingent on a successful conclusion of WTO negotiations
are now calling for a more comprehensive rewrite of the 2002 law. The American Farm Bureau
Federation has now withdrawn its insistence that the current farm bill be extended until a new
WTO agreement is reached and calls for a farm bill that includes the basic concepts of the 2002 ²³
farm law.

The previous round of multilateral trade negotiations—the Uruguay Round—which spanned 1988
to 1994 was the first international trade agreement to include agricultural policy reform. The
Uruguay Round’s Agreement on Agriculture (AA) was the first multilateral agreement dedicated
entirely to agriculture. The AAs implementation period lasted six years (1995-2000) for
developed countries and 10 years (1995-2004) for developing countries. Article 20 of the AA
included a provision for the continuation of the agricultural policy reform process.
At the WTO’s Fourth Ministerial Conference (held in Doha, Qatar, on November 9-14, 2001),
WTO member countries agreed to launch a new round of multilateral trade negotiations, ²⁴
including negotiations on agricultural trade liberalization. This new round, because it

²³^S^ee,^f^o^{r exa}^m^p^l^e,^Ameri^c^an^F^a^rm^Bu^reau^p^r^{ess rel}^eas^e,^“Del^eg^at^{es S}^u^pp^o^r^t^F^a^rm^S^a^f^e^t^y^Net^,^I^mmi^gratⁱ^oⁿ^Ref^o^rm^,^”
^a^v^a^ila^ble^a^t^http://w^w^w^.^f^b.org^/ind^e^x^.^php?^f^u^s^e^a^c^tion=^ne^w^s^r^oom^.new^sf^oc^us^&y^e^a^r⁼^2007&^f^ile⁼ⁿ^r⁰¹⁰⁹^.htm^l.
²⁴^T^h^e^Doha^Mi^niste^r^ia^{l De}^c^l^a^r^a^{tion la}^uⁿ^c^h^ing^t^h^e^DDA^ne^g^o^tia^tion^s^{is a}^t^htt^p^://w^ww^.^w^to.org^/e^ng^lish/tra^t^op^_e^/^dda^_e^/
⁽^c^onti^nue^d.^..)

emphasized integrating developing countries into the world trading system, was called the Doha
Development Agenda (DDA). The new round incorporates agriculture into a comprehensive
framework that includes negotiations on industrial tariffs, services, anti-dumping and
countervailing duty measures (referred to as rules), dispute settlement, and other trade issues.
The Doha Ministerial (DM) Declaration mandate for agriculture called for comprehensive
negotiations aimed at substantial improvements in market access; reductions of, with a view to
phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic
support. These topics—domestic support, export subsidies, and market access—have become
known as the three pillars of the agricultural negotiations. The DM declaration also provided that
special and differential treatment (SDT) for developing countries would be an integral part of all
elements of the negotiations. The DM declaration took note of non-trade concerns reflected in
negotiating proposals of various member countries and confirmed that they would be taken into
account in the negotiations. March 31, 2003 was set as the deadline for reaching agreement on
“modalities” (targets, formulas, timetables, etc.) for achieving the mandated objectives, but that
deadline was missed. During the rest of 2003, negotiations on modalities continued in preparation
for the fifth WTO Ministerial Conference held in Cancun, Mexico September 10-14, 2003.
While the United States and the EU reached agreement on a broad framework for negotiating
agricultural trade liberalization before the Cancun meeting, a group of developing countries, the
G-20 which includes Brazil, China, India, and South Africa, among others, made a counter-
proposal. The G-20 proposal emphasized agricultural subsidy and tariff reduction for developed
countries with fewer demands on developing countries. The Chairman of the Cancun ministerial
circulated a draft declaration at the meeting that attempted to reconcile differences between
developed (especially the United States and the EU) and developing countries (especially the G-

20) on the agricultural issues. Neither the proposals made by the United States and the EU, the G-

20, nor the Chairman’s draft declaration proposed specific modalities (formulas, targets, or
timetables) for reducing tariffs and trade-distorting support and for phasing out export subsidies.
The Cancun Ministerial Conference thus failed to reconcile differences on agricultural issues as
well as differences between developed and developing countries over expanding the negotiating
agenda to include such issues as competition and investment policy. The Cancun Ministerial
ended without an agreement on modalities or a framework for continuing multilateral
negotiations on agricultural trade liberalization. The inconclusive end of the Cancun ministerial
largely eliminated the prospect that the DDA would conclude by its scheduled end date, January

1, 2005.

On July 31, 2004, WTO member countries reached an agreement on a work program for
completing the DDA negotiations. The July 31 work program includes annexes that lay out ²⁵
negotiating frameworks for agriculture and other DDA issues. The agricultural framework
(referred throughout this report as the Framework) set the stage for negotiations to determine

^(...c^on^tin^ue^d)
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²⁵^Se^e^C^R^S^R^e^por^{t R}^S²¹⁹⁰^5,^A^g^ri^cu^l^t^u^{re i}ⁿ^t^h^{e WT}^{O Do}^ha^R^o^un^d^:^T^h^{e F}^r^a^m^ewo^r^{k A}^g^reemen^t^aⁿ^d^Next^S^t^ep^s^{, by}
^Ch^arl^e^{s E}^.^Han^r^ah^an.^T^h^{e f}^r^a^m^e^w^o^r^{k a}^g^ree^m^en^t^kn^o^wⁿ^{as t}^h^e^D^o^{ha W}^o^r^k^Pr^ogr^am^m^e^:^D^e^cⁱ^sⁱ^on^A^dop^te^d^by^the
^G^e^ne^r^a^l^C^o^uⁿ^c^{il on Au}^gus^{t 1, 20}⁰⁴^is^a^t^htt^p^://w^w^w^.^w^to.org^/e^ng^lis^h/tra^t^o^p_e^/^dda^_e^/^dda^dra^f^t_3¹^jul^04_e^.^pdf^.

modalities (i.e., the specific targets, formulas, timetables, etc.), for curbing trade-distorting
domestic support, reducing trade barriers and eliminating export subsidies. Negotiators set for
themselves a deadline of July 2005 for completing a first draft of the agricultural modalities,
another deadline that was subsequently missed. The following three subsections describe what
was agreed to in the July 31 Framework, and the issues that remained to be negotiated for each of
the three negotiating pillars.
Although 36 WTO members are permitted to use export subsidies as listed in their country
schedules, only 24 countries have actually used export subsidies. Most countries with permissible
export subsidies have used them very sparingly. During the 1995-2001 period for which WTO
notification data are available, the EU accounted for nearly 90% of all export subsidies used by ²⁶
WTO members.
Under the Framework, WTO members agreed to establish detailed modalities ensuring the
parallel elimination of all forms of export subsidies and disciplines on all export measures with
equivalent effect by a credible end date. The following will be eliminated by the end date to be
determined (TBD):

1. Export subsidies.

2. Export credits, export credit guarantees or insurance programs with repayment periods beyond

180 days.

3. Terms and conditions—e.g., interest payments, minimum interest rates, minimum premium
requirements, and any other subsidy elements—relating to export credits, export credit
guarantees or insurance programs with repayment periods of 180 days or less which are not in
accordance with disciplines TBD.
4. Trade distorting practices of exporting State Trading Enterprises (STEs) including elimination
of export subsidies they receive and government financing and underwriting of losses.

5. Provision of food aid not in conformity with disciplines TBD.

6. Developing countries will benefit from longer implementation periods TBD for eliminating all
forms of export subsidies.

1. Schedule for eliminating export subsidies.

²⁶^U^S^D^A^{, Ec}^onom^ic^R^e^s^e^a^r^c^h^Se^r^v^ic^e^,^WT^O^A^g^rⁱ^c^u^ltur^a^{l T}^r^a^d^e^P^o^li^cy^C^o^m^mⁱ^t^m^eⁿ^ts^D^a^ta^ba^s^e^,^W^T^{O Ex}^por^t^Su^bs^idy
^N^o^tif^ic^a^tions^{, “}^T^ota^l^e^x^{port s}^u^bsⁱ^d^ie^s^by^c^ountry^{, 19}^95-²⁰^01”^a^v^a^ila^ble^a^t^htt^p^://w^w^w^.e^rs^.us^d^a^.^g^o^v^/^d^b^/^W^to/
^Ex^por^tS^ubsⁱ^d^y^_da^ta^ba^s^e^{/ D}^e^f^a^ult.a^s^p?^ER^ST^a^b⁼²^.

2. Nature of “parallel treatment” of export credit programs.

3. Rules for exporting STEs.

4. New disciplines for food aid to prevent commercial displacement.

5. An assessment of whether and to what extend food aid should be provided in grant form.

6. A review of the role of international organizations in providing food aid.

Only 35 out of 149 members have notified use of trade-distorting domestic subsidies in their
country schedules. During the 1995-2001 period for which notification data are available, three
countries—the EU, the United States, and Japan—accounted for 91% of all domestic subsidies ²⁷
used by WTO members.
1. General Concepts
a. Doha Ministerial Declaration calls for substantial reductions in trade-distorting domestic
support.
b. Special and Differential Treatment (SDT) remains an integral component of domestic
support: developing countries to be given smaller cuts with a longer implementation
period and continued access to AA, Article 6.2—special exemptions for investment and
input subsidies.
c. There will be a strong element of harmonization in the reductions made by Developed
Members. A tiered, progressive formula TBD will be used for implementing all reductions.

2. Amber Box—Current bounds are detailed in country schedules.

a. Substantial reductions (TBD) from bound levels.
b. Limits (TBD) will be placed on supports for specific products in order to avoid shifting
support between different products.
3. De Minimis exemptions—The current bound for non-product-specific support is 5% of the
total value of agricultural production (TVP); for product-specific support it is 5% of the value
of production for each specific product (PVP). Developing countries are bound at 10% for both
measures.
a. Substantial reductions, TBD, that take into account SDT.

²⁷^Se^e^A^ppe^ndix^T^a^ble^{4 i}ⁿ^C^R^S^R^e^por^{t R}^L³⁰⁶¹^2,^A^g^rⁱ^c^u^lt^ur^eⁱⁿ^th^e^W^T^O^:^M^e^m^b^e^r^Spe^ndi^ng^on^D^o^m^e^s^tic^Sup^por^t^,
^by^R^a^nd^y^Sc^hne^pf^.

4. Blue Box—Currently unbound; includes only production limiting direct payments.

a. “Members recognize the role of the Blue Box in promoting agricultural reforms.”
b. To be bound at no more than 5% of TVP (or PVP for individual products) during an
historical period TBD.
c. Will be expanded to include direct payments that do not require production under certain
conditions (e.g., U.S. counter-cyclical payments (CCP)).
d. Criteria TBD will be added to ensure that blue box payments are less trade distorting than
AMS measures.

5. Overall Ceiling for Trade-Distorting Domestic Support—The sum of amber box, blue box,

and de minimis is currently unbound.
a. Substantial reductions (TBD) including an initial 20% cut enacted in the first year, with
further cuts to be negotiated.
b. If the sum of bound ceilings for amber box, de minimis, and blue box is still above the
Overall Ceiling, then additional cuts in at least one of them must be made to comply with
the Overall Ceiling commitment.
6. Green Box—Criteria will be reviewed and clarified to ensure that Green Box measures have
no, or at most minimal, trade-distorting effects on production.

1. Formula for reductions in bounds for Overall and Amber Box:

—Levels and number of tiers.
—Rate and formula for within-tier cuts encompassing greater harmonization.
—Levels for individual commodity limits within the amber box.

2. Blue box disciplines:

—Formula for establishing bound levels as a share of production value.
—Base period against which to measure bounds.

3. De Minimis disciplines:

—Formula for establishing bound levels as a share of production value.
—Base period against which to measure bounds.

All countries have market access barriers, whereas only some have export subsidies or Amber or
Blue Box domestic support. Therefore, the range of interest in market access reform is more
complex and is proving more difficult to achieve.

1. All members must improve market access substantially for all products.

2. The Framework gives no tariff reduction formula, but provides direction:

a. All members except LDCs must improve market access.
b. Tiered and progressive: larger within-tier cuts for higher tiers.
c. Reductions to be made from “bound” rate, not (generally lower) applied rate.
d. Special & Differential Treatment (SDT) for developing countries:
i. Smaller formula commitments in tariff reductions.
ii. Greater access to and treatment of sensitive products.
iii. A longer implementation period.
iv. Designation of a number of products as Special Products, eligible for more flexible
tariff treatment, based on criteria of food security, livelihood security, and rural
development need.
e. Sensitive Products:
i. Principle of substantial improvement in market access TBD.
ii. Appropriate number of permissible sensitive products TBD.

1. Harmonized tariff reduction scheme:

a. Levels and number of tariff tiers.
b. Rate and formula for within-tier tariff cuts.
c. Tariff caps, i.e., a bound maximum tariff rate.

2. Parameters governing Sensitive Products:

a. Limit on sensitive products (how many and what treatment?).

b. Tariff rate quota (TRQ) formula for linking quota to reduced tariff via:
(1) MFN-based tariff quota expansion required of all sensitive products;
(2) within and over-quota tariff reductions.
c. Improved administration of TRQs.
d. Reducing or eliminating tariff escalation associated with increasing stages of value-added
products.

3. Exact nature of SDT for developing countries:

a. Lesser commitments; longer implementation period; greater flexibility for sensitive
products
b. Special products (i.e., related to food or livelihood security, or rural development) given
additional flexibility.
c. Special Safeguard Mechanism (SSG)—to deal with surges in imports or falling prices—are
to be available for developing countries. Their status is TBD with respect to developed
countries.
d. Special treatment of agricultural product alternatives to illicit narcotic crops.
e. Erosion of trade preferences when the WTO agreement supercedes bilateral or regional
trade agreements.
4. Treatment of Least-Developed Countries (LDCs): should LDCs be given a “free” round with
no new market access commitments TBD?
5. Geographical Indications (GIs): will GIs be a part of any final agreement and, if so, how will
they be defined and implemented?

The economic and policy implications of trade liberalization are briefly reviewed at three levels:
analysis of global trade and income effects; existing U.S. policy context; and analysis of U.S.
domestic agricultural income and policy effects.
In estimating the economic benefits to the U.S. and world from a new round of trade
liberalization, two points must be kept in mind. First, based on the current proposals for
reforming the domestic and trade policy of WTO members, any agreement from the Doha Round
will institute only a “partial” liberalization, i.e., it will allow countries to maintain some policies
(whether domestic subsidies or border measures) that continue to distort agricultural trade.
Second, current proposals deal with setting limits on aggregate spending categories. If adopted,
each individual member country will ultimately decide how to implement their domestic policies
so as to achieve the aggregate spending limits agreed to under a new trade agreement.

According to the several recent economic analyses of the potential economic benefits from global ²⁸
trade liberalization, the following common conclusions emerge.
• Policies that distort agricultural trade account for roughly two-thirds of all
policies that distort trade in goods of any kind.
• Of policies that distort world agricultural trade, tariffs and tariff-rate quotas are
by far the most costly—accounting for 80% to 90% of the cost—with domestic
support and export subsidies comprising the remainder.
• A significant gap between bound and applied tariff rates for most products in
most countries suggests that substantial tariff cuts in bound rates (those affected
by Doha Round negotiations) will have to be realized before applied rates are
actually lowered.
• Similarly, a significant gap between bound and actual domestic spending levels
suggests that substantial cuts in bound domestic spending limits (those affected
by Doha Round negotiations) will have to be realized before actual spending
levels are lowered.
• Much of the eventual market access gains will be determined by the treatment of
sensitive products, i.e., their number and the extent to which they are exempted
from reform.
A 2005 World Bank study to measure the effects of a partial trade liberalization (using cuts to
tariff and subsidy bounds similar to those contained in the G-20 proposal, but with no special
treatment for “sensitive” or “special” products) found that such reform would produce annual ²⁹
welfare benefits to the world (in 2001 dollars) of $74.5 billion once fully implemented. This
compares with a potential annual benefit of $182 billion under full trade liberalization and
suggests both the potential economic importance of a successful Doha Round as well as the
extent of remaining policy reform needed to achieve full liberalization.
However, the World Bank study also found that if developed countries are allowed to select 2% of
their tariff lines (4% for developing countries) as sensitive products and provide them with
special TRQ protection that includes very high above-quota tariffs, then annual economic benefits ³⁰
from trade liberalization would fall to $17.7 billion. In other words, nearly 80% of the potential
economic gains would be eliminated. The same study also found that a substantial portion of the
potential economic benefits could be preserved, even with a 2% sensitive product threshold, if
above-quota tariffs are capped at 200%. Under this scenario the annual economic benefits from
trade liberalization are estimated at $44.3 billion.

²⁸^T^h^e^C^ong^r^e^s^sⁱ^ona^{l B}^u^dg^e^t^O^f^fⁱ^ce⁽^C^B^O⁾^e^x^am^ine^d^s^e^ve^r^a^{l e}^c^onom^ic^s^t^udie^s^of^g^l^oba^{l tr}^a^d^e^libe^r^a^l^iz^a^{tion c}^o^m^p^le^te^d
^durⁱⁿ^g^the²⁰^{01 t}^o²⁰⁰⁵^pe^rⁱ^o^d^aⁿ^{d ha}^v^e^s^u^m^m^a^r^ize^d^the^r^e^s^u^ltsⁱⁿ^its^r^e^por^t^,^T^h^e^Effe^c^t^s^of^Li^be^r^a^liz^{ing W}^o^r^l^d
^Agrⁱ^c^u^lt^ur^{al Tr}^ade^:^A^S^u^r^v^e^y^{, D}^e^c^.²⁰^05;^a^v^a^ila^ble^a^t^htt^p^://w^w^w^.cbo.g^o^v^/^f^t^pdoc^s^/^69x^x^/^doc⁶⁹^09/^12-^01-T^r^a^d^e^L^ib.pdf^.
²⁹^Ibid^{., p. 9.}
³⁰^I^b^id^{., p. 10.}

Current Doha reform proposals suggest that substantial changes would be needed in several
aspects of existing U.S. agricultural policies. These are briefly reviewed below.
The United States uses export subsidies and export credit guarantees to support some of its
commodity exports, and is a major donor of international food aid. As a result, changes in these
programs will have some impacts on U.S. commodity markets and trade policy.
Although the United States has the second-largest level of permissible export subsidies under
current WTO limits, it uses only a very small share of its allowable level. Milk and milk products
are the principal beneficiaries of U.S. export subsidies.
The United States is the world’s leading user of export credit guarantees.³¹ In FY2004, nearly
$3.7 billion worth of U.S. agricultural exports (out of a total of $62.4 billion) were facilitated with
agricultural export credit guarantees. Current Doha reform proposals would likely reduce the
effectiveness of traditional export credit guarantees at supporting U.S. commodity exports into
price-competitive markets. However, on-going U.S. changes in its export credit guarantee
program, made in response to a WTO dispute settlement ruling against certain features of the U.S. ³²
cotton program, are likely to bring them into compliance with Doha reform proposals, thereby
necessitating little if any further changes.
The United States is among the world’s leading food aid donors. In FY2004, nearly $2.2 billion
worth of U.S. agricultural exports (out of a total of $62.4 billion) were made under some form of
U.S. food aid program (including PL480, Food-For-Peace, and McGovern-Dole International
Food for Education and Child Nutrition Program). Since most of U.S. food aid is in the form of
commodity donations rather than cash, U.S. food aid donations will likely be reduced to the ³³
extent that reforms to food aid limit or restrict the donation of actual commodities.

³¹^For^m^o^r^e^inf^o^r^m^a^{tion, s}^e^e^C^R^S^R^e^por^{t R}^L³²²⁷^8,^Tr^e^ndsⁱⁿ^U^.^S.^Agrⁱ^c^u^lt^ur^al^Ex^por^t^C^r^e^d^{it G}^u^ar^aⁿ^te^e^Pr^ogr^am^s
^and^P.L^.⁴⁸⁰^{, Ti}^tle^I^,^F^Y¹⁹⁹²^-²⁰⁰²^{; a}ⁿ^{d USDA}^{, Fore}^ig^{n A}^g^ric^u^ltur^a^{l Se}^rv^ic^e^,^Ex^port^P^r^og^ra^m^s^a^t
^h^t^t^p^:^/^/^www^.^f^as.^u^sd^a.^go^v/^exp^o^r^t^p^r^o^gra^m^s.^asp^.
³²^For^m^o^r^e^inf^o^r^m^a^{tion, s}^e^e^C^R^S^R^e^por^{t R}^L³²⁰¹^4,^W^T^{O Disp}^ute^S^e^ttle^me^{nt: St}^atus^{of U.}^{S. C}^o^mpli^aⁿ^c^e^{in Pe}ⁿ^dⁱ^ng
^Ca^ses^{; an}^d^CRS^Rep^o^r^t^RS2²¹⁸⁷^,^Br^az^il^'^s^W^T^O^C^a^s^e^A^g^aⁱ^ns^{t t}^h^e^U^.^{S. C}^o^tto^{n Pr}^ogr^am^:^{A Br}^ie^{f O}^v^e^r^vⁱ^e^w^{, by}^R^a^ndy
^Sc^hne^pf^.
³³^For^m^o^r^e^inf^o^r^m^a^{tion, s}^e^e^C^R^S^R^e^por^{t R}^L³³⁵⁵^3,^A^g^rⁱ^c^u^lt^ur^al^Ex^por^t^an^{d F}^o^o^d^Ai^{d Pr}^o^g^r^a^m^s^.

The United States together with the EU and Japan account for nearly 90% of global agricultural ³⁴
domestic support subsidies. As a result, these three countries are most likely to bear the brunt of
the economic consequences associated with new disciplines on domestic support. Table 1
contains information on U.S. domestic support and various Doha Round reform proposals.
Under the U.S. proposal for reform of domestic support (Table 3), the U.S. amber box ceiling
would be lowered by 60% to approximately $7.6 billion. This compares with current amber box
spending in FY2005 of an estimated $12.7 billion and an amber box ceiling of $19.1 billion. As a
result, U.S. domestic support programs would require some redesign (with likely box shifting) to
be able to meet such a lower ceiling. Although there are many ways that such changes could be
achieved, a likely candidate would include shifting away from market-distorting programs such
as loan deficiency payments (LDP) or marketing loan gains (MLG) and towards greater use of
green box programs such as decoupled direct payments, conservations payments, or rural
infrastructure development.
Under the U.S. proposal for reform of domestic support (Table 4), the de minimis exemptions,
both non-product specific and product specific, would be bound at 2.5% of the value of relevant
production (i.e., either aggregate or commodity specific). For non-product specific de minimis,
this would result in a ceiling of about $5 billion, compared with estimated exemptions of $6.2
billion in FY2005. However, shifting the counter-cyclical payments (CCP) to the blue box (see
below) would bring spending under the de minimis exemptions back into line with their proposed ³⁵
commitments.
Under both the framework agreement and the U.S. proposal for reform of domestic support,
CCPs would be eligible for the blue box. The U.S. proposal also recommends establishing a blue
box ceiling of 2.5% of the total value of national agricultural production (TVP). For the United
States, 2.5% of TVP would be approximately $5 billion. The U.S. currently has no spending in ³⁶
the blue box, however, CCP outlays are estimated at $4.2 billion in FY2005.
There is substantial potential for U.S. agricultural exports to expand under an international system
of improved market access based on lower tariffs and increased quotas. In contrast, further

³⁴^For^m^o^r^e^inf^o^r^m^a^{tion, s}^e^e^C^R^S^R^e^por^{t R}^L³⁰⁶¹^2,^A^g^rⁱ^c^u^lt^ur^eⁱⁿ^t^h^e^W^T^O^:^M^e^m^b^e^r^Spe^ndⁱⁿ^{g o}ⁿ^D^o^m^e^s^tic^Su^pp^or^t^.
³⁵^T^h^e^CCP^prog^ra^m^w^a^s^fⁱ^{rst a}^u^thoriz^e^d^u^nde^{r t}^h^e²⁰⁰²^f^a^rm^{bill. U.S. n}^o^tif^ic^a^tion^{to t}^h^e^W^T^{O of}^it^{s dom}^e^s^tic
^s^p^e^ndi^ng^is^c^o^m^p^le^te^thr^o^ug^{h 2}⁰⁰¹^{. A}^s^a^r^e^s^u^{lt, the}^U^.^S.^ha^s^no^{t y}^e^t^not^if^ie^{d C}^C^P^s^p^eⁿ^ding^a^s^pe^r^t^aⁱⁿⁱ^ng^{to a}^s^p^e^cⁱ^fⁱ^c
^box^{. H}^o^w^e^v^e^r^,^its^de^sⁱ^gⁿ^a^nd^ope^r^a^{tion s}^u^g^g^e^s^t^tha^t^C^C^P^s^p^eⁿ^ding^w^{ould q}^u^a^lif^y^a^s^a^non-^pr^od^uc^{t s}^p^e^cⁱ^fⁱ^c^A^M^S
^outla^y^.
³⁶^Se^e^C^R^S^R^e^por^{t R}^S²¹⁹⁷^0,^T^h^e^U^.^{S. F}^a^r^m^Ec^o^nom^y^,^by^R^a^nd^y^Sc^hne^pf^.

reductions in tariff levels are unlikely to produce significant increases in imports for most U.S.
agricultural commodities since U.S. agricultural tariffs are already very low relative to most other
nations and relatively few commodities receive tariff-rate quota (TRQ) protection.
Dairy products, beef, and sugar are three of the major U.S. beneficiaries of TRQ protection. Each
of these products are likely to continue to receive protection as “sensitive” products under a new
DDA agreement (although no specific information concerning the identification of sensitive
products has yet been made by the United States or any other negotiating country). Expanded
quota levels would likely result in increased imports for each of these commodities.
The U.S. proposal does not provide any specificity regarding the administration of TRQs;
however, the G-20 proposal recommends that minimum access quotas be set at 6% of domestic
consumption for some undefined base period. Australia recommended a higher access quota level
of 8-10% of domestic consumption.
In response to a request by the Chairman of the Senate Agriculture Committee, Senator
Chambliss, the Food and Agricultural Policy Research Institute (FAPRI) analyzed the potential
impacts on U.S. agriculture of the U.S. proposal (see Tables 1-3 for details of the U.S. ³⁷
proposal). Under the U.S. proposal, the amber box (AMS) annual limit falls to $7.6 billion
(representing a 60% cut from the previous $19.1 billion limit). To achieve this lower spending ³⁸
limit, FAPRI had to make specific assumptions about U.S. farm policy reform (see Table 4). In
particular, loan rates for grain, oilseed, and cotton, and the dairy support price were reduced by
11%; sugar loan rates were reduced by 16% (to avoid excessive stock accumulation); and CCP
payments were redirected from the amber box to the redefined blue box. For all non-sensitive
products, tariff reductions are made in accordance with the tiers described in Table 2. In addition,
for each designated sensitive product TRQs were increased by 7.5% of the 1999-2001 level of
domestic consumption. Finally, export subsidies are eliminated by 2010.
In addition to the above program changes, two scenarios were evaluated: an “uncompensated”
scenario where all target prices were reduced by 7%; and a “compensated” scenario where instead
of lowering target prices, direct payment rates were increased by 7%. CCP payments equal the
target price minus the per unit direct payment rate minus the higher of the loan rate or the market
price. Thus, both of these scenarios have the effect of lowering CCP payments by 7%. The
difference is that in the “compensated” scenario government outlays are increased to offset the
lower CCP payment. Replacing non-product specific CCP payments with decoupled direct
payments represents shifting from the capped blue box to the unlimited green box. A summary of
the net effect of these changes is presented in Table 4 and are described briefly below.

³⁷^FA^P^R^I,^P^o^te^nt^{ial I}^m^pac^ts^{on U}^.^S^.^Agrⁱ^c^u^ltur^e^o^f^t^h^e^U^.^S.^O^c^tobe^r²⁰⁰^{5 W}^T^O^Pr^op^os^al^,^FA^P^R^I^-^U^M^C^R^e^por^t^#1^6-
⁰⁵^,^Dec.¹⁵^,²⁰⁰⁵^,^h^e^reaf^{ter re}^ferred^to^{as FA}^P^R^{I (2}⁰⁰⁵⁾^{; av}^ailab^l^e^{at h}^ttp^://w^ww^.^f^ap^ri.m^isso^u^r^i.ed^u^/^o^u^t^reach^/
^pub^lic^a^tio^ns^/²⁰⁰^5/^FA^P^R^I^_^U^M^C^_^R^e^por^t^_¹⁶^_^05.^pdf^{. T}^h^e^C^e^nte^r^f^o^r^A^g^rⁱ^c^u^ltur^a^{l a}ⁿ^{d R}^u^r^a^l^D^e^v^e^lopm^eⁿ^{t (}^C^A^R^D⁾
^c^ond^uc^te^{d s}^u^pp^or^ti^ng^aⁿ^a^l^y^s^is^of^the^e^f^f^e^c^t^s^{on g}^l^oba^{l m}^a^r^k^e^t^sⁱⁿ^U^.^{S. Pr}^op^os^al^for^W^T^O^A^g^rⁱ^c^u^lt^ur^a^l^N^e^goti^a^ti^ons^:^I^t^s
^I^m^pac^{t o}ⁿ^U^.^S.^an^{d W}^o^r^l^{d Agr}ⁱ^c^u^ltur^e^,^C^A^R^D^Wo^r^kⁱⁿ^{g P}^a^p^e^r⁰⁵^-^W^P⁴¹⁷^,^Dec.²⁰⁰⁵^{, h}^e^reaf^{ter referred}^to^{as CA}^RD
⁽²⁰^{05); a}^v^a^ila^ble^a^t^http^://w^ww^.^c^a^r^d.ia^sta^t^e^.^e^du/^pu^blic^a^tio^ns/^D^BS/P^D^FFile^s/^05w^p41^7.p^d^f^.
³⁸^T^h^{e p}^r^o^g^ram^ch^an^ge^{s were sel}^e^ct^ed^so^{as t}^o^rest^ri^ct^vi^o^l^atⁱ^oⁿ^o^f^W^T^{O l}ⁱ^mⁱ^t^s^t^o^l^e^{ss t}^h^an⁵^%^o^f^t^h^{e s}^t^o^c^h^a^stⁱ^c
^outc^o^m^e^s^f^r^o^m^{500 s}ⁱ^m^u^la^tions^r^uns^.^Se^e^FA^P^R^I⁽²⁰⁰⁵⁾^f^o^r^de^ta^ils^.

Annual net government outlays are reduced by 22.5% but net farm income is still up by $1.3
billion (2.4%) as increases in prices resulting from increased exports offsets at least some of the
reduction in payments. Rice producers experience a sharp jump (5.7%) in combined market
returns plus government payments. However, returns plus payments remain below baseline levels
for corn, soybeans, and cotton.
Annual net farm income is up by $3.4 billion (6.5%) as the increase in direct payments further
offsets reductions in CCPs and loan benefits. For rice, wheat, corn, and soybeans, average
estimated returns plus payments exceed the baseline levels. Of the five major program crops, only
for cotton do returns plus payments remain below baseline levels.
Crop and livestock receipts are up by about $2 billion and $4.2 billion, respectively. Livestock
receipts increase in response to higher prices for cattle, hogs, poultry, and milk, due to increased
U.S. meat and poultry exports. Higher crop receipts result from both increased feed demand and
exports. Key drivers behind the higher international commodity prices and higher U.S. exports ³⁹
include the following.
• Removal of export subsidies raises prices in the international wheat, barley, rice,
sugar, beef, and dairy markets.
• Expansion of TRQs, in general, increase trade in those protected commodities by
exposing highly protected markets to lower international prices.
• Tariff reductions, in general, raise the demand for traded products, while
reductions of domestic support reduce competition from more inefficient
producers.
• Expansion of rice TRQs in Japan and South Korea, in particular, push
international rice prices higher by 8% on average.
• Tariff reductions and the removal of the Special Safeguard Mechanism in Japan
raise both demand and prices for pork and beef.
In the FAPRI study, U.S. farm real estate values experience small, but significant changes. Under
the uncompensated scenario, average U.S. farm land values decline by 1.4% as the reduction in
government payments (-22.5%) more than offsets higher market returns. Factors other than net
market returns and payments affect land values, but changes in profitability play an important
role and (in the uncompensated scenario) translate into lower projected future revenue streams to
the land. Under the compensated scenario, farm real estate values increase by 1.7% as slightly
lower projected government payments (-1.8%) are more than offset by expected market returns
suggesting improved long-run returns to the land.

³⁹^For^m^o^r^e^de^ta^ils^s^e^e^C^A^R^D⁽²⁰⁰⁵⁾^.

Table 4. Summary of FAPRI Analysis of U.S. Proposal
^{Absolute Chan}^ges^{Percent Changes}
^Base-^a^Unco^mp-^b^Comp-^c^Unco^mp-^b^Comp-^c
^line^ensated^ensated^ensated^ensated
^{Policy chan}^ge:
^L^oan^rates^-11%^-11%
^{Sugar loan rates}^-16%^-16%
^{Milk support}^price^-11%^-11%
^{Target prices (TP)}^-7%^-7%
^{Direct payment}^0%^7%*TP^d
^rates
^{WTO In}^dicators^{$ billion}
^AMS^limit^19.1^7.6^7.6^-60%^-60%
^{Product-Specific}^9.4^4.7^4.7^-50%^-50%
^AMS
^{Blue box limit}^9.5^4.8^4.8^-50%^-50%
^CCPs^3.1^1.5^1.5^-50%^-50%
^{Net Govt O}^utlays^16.5^12.5^16.0^-24%^-3%
^Crop^{Returns +}^{$ per a}^cre
^{Govt payments}
^Corn⁴²⁴⁴¹⁸⁴³⁴^-1.3%^2.4%
^Soybeans²⁵⁴²⁴⁷²⁵⁷^-2.5%^1.5%
^Wheat¹⁷⁷¹⁷⁹¹⁸⁷^0.8%^5.1%
^Upland^Cotton⁵⁸²⁵⁴⁵⁵⁷¹^-6.3%^-1.8%
^Rice⁷⁶⁸⁸¹²⁸⁴¹^5.7%^9.5%
^{Farm Inc}^ome^{$ billion}
^Crop^Receipts^125.¹^127.¹^127.¹^1.6%^1.6%
^Livestock^Receipts^112.²^116.⁴^116.⁴^3.8%^3.7%
^Govt^payme^nts^16.7^12.9^16.4^-22.5%^-1.8%
^Production^Costs^237.⁷^239.¹^240.⁵^0.6%^1.2%
^{Net Farm I}^ncome^53.1^54.4^56.5^2.4%^6.5%
^Source:^{Abridged from Table}¹^{of FAPRI (2005). The}^{reported d}^{ata for all categories represe}^{nt av}^{erages for t}^he
^three-year^{period, 201}^2-2⁰¹^{4, where all program}^reforms^have^be^{en fully implemen}^ted.
^a.^{Baseline assumes t}^{he elimination of the Step}^{2 p}^{rogram for cotton,}^but^{no other}^program^reforms.
^b.^{The un}^compen^{sated scena}^{rio assumes}^{program re}^{forms comme}^ns^{urate with t}^{he U.S. proposal inclu}^{ding a}
^{7% c}^{ut in all target p}^{rices to achi}^{eve a reduction in CCP outlays.}
^c.^{The compen}^{sated scena}^{rio is similar to the uncom}^pensated^but^us^{es a 7% i}^{ncrease in}^pe^{r-unit direc}^t
^payment^{s, instead of a 7%}^{cut in}^t^{arget prices, to achieve a}^reducti^{on in CCP outlays.}
^d.^{Direct payment}^{rates a}^{re increas}^{ed by 7}^%^{of the}^target^{price for e}^{ach commodity.}

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by Ian F. Fergusson.
CRS Report RL33697, Potential Challenges to U.S. Farm Subsidies in the WTO, by Randy
Schnepf.
CRS Report RL33743, Trade Promotion Authority (TPA): Issues, Options, and Prospects for
Renewal, by J. F. Hornbeck and William H. Cooper.
CRS Report RS21905, Agriculture in the WTO Doha Round: The Framework Agreement and
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CRS Report RL33553, Agricultural Export and Food Aid Programs, by Charles E. Hanrahan.
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480, Title I, FY1992-2002, by Carol Canada.

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CRS Report RS20840, Agriculture in the WTO: Limits on Domestic Support, by Randy Schnepf.
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index.cfm? fa=view&id=18083&prog=zgp&proj =zted.
USDA, FAS, International Trade Policy Division, Online information on U.S. trade negotiations
and agreements, http://www.fas.usda.gov/itp/policy/tradepolicy.asp.
USDA, ERS, World Trade Organization Briefing Room, http://www.ers.usda.gov/briefing/WTO/.
WTO, Agriculture Negotiations: Backgrounder: The Issues and Where We Are Now,
http://www.wto.org/english/tratop_e/agric_e/negs_bkgrnd00_contents_e.htm.

^{Dates Key}^Events
¹⁹⁸^6-1⁹⁹⁴^{Uruguay Rou}^{nd of multilateral tr}^{ade negotiations.}
¹⁹⁹⁴^{Uruguay Rou}^{nd culminated in t}^h^e^{establishment}^{of the World Tra}^{de Organization}
^{(WTO). The Agreement on Agri}^{culture was}^{one of 2}⁹^{legal texts}^{underwriting t}^he
^{WTO and its administration of rules governing inte}^{rnational trade}^.
^{Nov. 9-13, 2}⁰⁰¹^Curre^{nt Doha Development Age}^{nda (DDA) or Doha Round of multilateral}
^{negotiations was initiated in Doh}^{a, Qatar.}
^{July 3}^{1, 20}⁰⁴^{WTO Doha Round negotiations produce a}ⁿ^{interim g}^{uideline doc}^{ument, th}^e
^{Framework Agreement}^{, to so}^li^{dify existing commitments a}^{nd to guide negotiations of}
^{details for final agricultural agree}^ment.
^{Jan. 1, 2}⁰⁰⁵^Curre^{nt Doha Round of m}^ultilate^{ral negotiations was scheduled to end, but}^several
²⁰⁰^{3 a}^{nd 2}⁰⁰⁴^{deadlines were mi}^{ssed. As a result, DDA negotiatio}^{ns contin}^{ue with}
^{no formal schedule, b}^{ut s}^{ubject t}^o^{several looming deadl}^ines.
^Summer²⁰⁰⁵^{USDA initiates farm bill l}^{istening sessions around t}^{he cou}^ntry.
^{Oct. 10-1}^{4, 2}⁰⁰⁵^{Series of position papers}^{released by major negotiations participa}^{nts including t}^he
^U.S.^{, EU, G-10, and G-}^20.
^{Oct. 27, 2}⁰⁰⁵^{EU released u}^{pdated proposal in}^response^{to concer}^{ns about}^{the i}^nadequac^{y of its}
^{first proposal’s market ac}^{cess off}^erings.
^{Dec. 13-18,}²⁰⁰⁵^{WTO Hong Kong Ministerial.}
^{July 2}^{4, 20}⁰⁶^{Indefinite Susp}^{ension of Doha De}^{velopment Agenda}^{Negotiations.}
^{July 1, 2}⁰⁰⁷^{U.S. trade promotion authority expires.}
^{Sept. 30, 2}⁰⁰⁷²⁰⁰^{2 fa}^rm^{bill expires.}
^Source:^{Compiled by CRS from}^{various sources.}

^{Group Members}
^{Big Two}^{U.S. and EU.}
^{Big Three}^U.S.^{, EU, and Japan.}
^{New Quad}^U.S.^{, EU, India, and Brazil}^.
^C-4^{The group of}^{4 Af}^{rican cotton-p}^r^{oducing countries—Benin, Bu}^rkin^{a Faso, Chad, and Mali—}
^{that have}^{proposed a}^{sectoral Doha Round initiative for cotton.}
^FIPS^{Five Interested Parties: U.S., EU,}^Brazil^{, India, and Australia.}
^{FIPS Plus}^{FIPS plus Argentina, Canada, Switz., Japan, China, and Malaysia.}
^G-5^Group^{of Five: U.S.}^{, EU, Japan, In}^{dia, and Brazi}^l.
^G-6^{G-5 plu}^{s Aust}^ralia.
^G-7^{A group of}^{7 nations—U.S., Japan}^{, Canada, Britain, France, Germa}^{ny, and Italy—whose}
^{finance minister}^{s and/or Heads}^{of State meet to discuss political and economic}
^{developments.}
^G-8^{G-7 plu}^{s Russia.}
^(G-8)+5^{G-8 plu}^{s 5}^{countries—Brazil, India, Mexico, China, and South Afric}^{a—with major}
^{emerging economies.}
^G-10^Group^{of 1}⁰^{developed, net impo}^{rting count}^{ries that s}^u^b^{sidize do}^{mestic agriculture:}
^{Bulgaria, Iceland, Israel, Japan, South Korea, Liechte}^{nstein, Ma}^{uritius, Norway, Switzerland,}
^{and Chinese Taipei.}
^G-20^Group^{of some 2}^{0+ major developing countries w}^{hose mem}^bers^{vary b}^{ut esse}^ntially
^{includes Argentina, Bolivia, Braz}^il^,^{Chile, China, Col}^{ombia, Costa R}^{ica, Cuba, Ecuador, Egy}^pt,
^{El Salvador, Guatemala, India, Mexico, Nigeria, Pakistan, Paraguay,}^{Peru, Philippines, South}
^{Africa, Thailand, and Venezuela.}
^G-33^Group^{of 3}³^{(now ex}^{panded to 4}^{2) developing countries oth}^erwis^{e called the “friends of}
^{special products” incl}^{uding China}^{, Turkey, Indonesia, India, Pakistan, plus some Af}^rican,
^{Caribbean, South A}^{merican, and}^{Asian countries.}
^G-90^Group^{of Least-Developed Coun}^{tries (LDCs).}
^Cairns^Membe^{rs are ge}^{nerally free-ma}^rk^{et oriented and su}^{pportive of inc}^{reased trade}
^Group^liberalizat^{ion. Members include A}^{rgentina, Aust}^{ralia, Bo}^livia^{, Brazi}^l,^{Canada, Chile, Co}^lombia,
^{Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa,}
^{Thailand, and Uruguay.}
^LDCs^{The WTO recognizes as least-developed countries (LDCs) those}^{countries w}^{hich ha}^ve
^{been designated as}^suc^h^{by the}^U^{nited Nations. There are}^cur^rentl^{y 50}^{LDCs on th}^{e U.N.}
^{list, 32 of which to date ha}^{ve bec}^{ome WTO members. A com}^{plete listing is available at}
^{http://www.wto.org/}^english/^thewto_e/^{whatis_e/tif_e/org7_e.htm.}
^Note:^{For more information, se}^{e the WTO trade}^{negotiations background re}^port,^{WTO Agricultur}^{e Negotiations:}
^{The Issues, and}^{Where We Are N}^o^w^{, “Key to Groups,” Dec. 1, 2}⁰⁰^{4, pp. 8}^3-8^{4; available at http://w}^ww.wto.org/
^{english/tratop_e/agric_e/ agnegs_bkgrnd_e.doc.}

^1.^The^{Agreement on Agr}^icu^lt^u^r^e^(AA)
^{Text of agricultural}^{policy reform commitments agreed to}^{under t}^{he Urug}^{uay Rou}^{nd (19}^86-1⁹⁹⁴⁾^{of WTO multilateral trade}
^{negotiations.}

^2.^The^{Three Pi}^ll^ars^{of agricultural policy}^reform
^a.^{Export co}^mpetition
^{i. Export su}^bsidies
^{ii. Export credit}
ⁱⁱⁱ^{. Fo}^{od Aid}
^{iv. State Trading Enterprises}
^b.^{Domestic Support}
^i.^{Aggregate Measure of Sup}^{port (AMS)}^{: sum}^{mary mea}^sure^{of a country’s total level of trade-distorting domestic subsidies.}
^ii.^{Amber box}^{: non-exem}^{pt trad}^{e-distorting subsidies; individual}^{members’ am}^ber^box^{bounds a}^r^e^{listed in their country}
^schedules.
ⁱⁱⁱ^.^{Blue box}^{: production-l}^imited^{subsidies; un}^bound.
^iv.^{De M}^{inimis-non-prod}^{uct s}^pecific^{: bound}^<5%^{of total production. value.}
^v.^{De Minimis-product specifi}^c^{: bound <}^{5% of}^{specific p}^{rod. value.}
^vi.^{Green Box}^{: minima}^{lly dist}^{orting subsidies; u}^nbou^nd.
^c.^{Market Access}
^{i. Bound and Applied Tariffs}
^ii.^{Sensitive Products Treatment}
ⁱⁱⁱ^{. Tariff Rate Quotas (TRQs) ad}^ministration
^{iv. Special Safeguard Mechanisms}^(SSMs)

^3.^Special^{and Diffe}^ren^ti^{al T}^r^e^atmen^{t (SDT)}^{for developing}^countries
^{a. Smaller commitments and longer implementation p}^eriods
^{b. Other}^{flexibilities and privileges}

^4.^Least-Dev^elop^{ing Coun}^tri^es
^{a. Free Round: no new commitm}^ents

^5.^{WTO Framewo}^{rk Agreemen}^t^{(referred to as}^{the “Framework”)}
^{a. The Framework provided agre}^{ement on a ge}^{neral f}^{ramework fo}^{r reform withi}^{n each}^{of the t}^hree^{main “pillars” of agricultural}
^{trade with details to be worked out in su}^bseq^uent^{negotiations.}
^{b. The Framework touc}^{hed on se}^{veral “non-pillar” issues: including}^{cotton sub}^{sidies and geographica}^{l indicati}^ons.
^Source:^{For detailed definiti}^{ons see “CRS Reports” listed in “Information Sources”, above.}

^C^h^arle^s^{E. Han}^r^ah^aⁿ ^Ra^nd^y^Sc^hⁿ^e^p^f
^Senⁱ^o^r^Sp^{ecialist i}ⁿ^Ag^rⁱ^cu^ltu^r^a^{l P}^o^licy^Sp^{ecialist i}ⁿ^A^g^rⁱ^c^u^lt^u^r^{al P}^o^lic^y
^ch^an^ra^h^a^n@^crs^.^l^o^c.g^o^v^,^7-⁷²³⁵^rs^chn^e^pf@^c^rs^.l^oc.g^ov^{, 7-}⁴²⁷⁷