Mr John Fahey, Minister for Finance, Australia, (Chairman): Ladies and Gentlemen thank you for your attendance. The Cairns Group met this morning and present at the top table are the majority of representatives of this group, We have also had a meeting with the US Secretary for Agriculture and the US Trade Representative on Agriculture; both of those meetings have been constructive. We meet on the eve of a World Trade Organisation Ministerial Conference that in so many ways is significant and historic. All of us are conscious, since September 11, of the need to progress in all areas in order to give a clear message though this ministerial meeting, of confidence about the future. We recognize that if we can get a new round underway, it will be of significant benefit to each of the constituent members of the WTO and to the world generally at a time when the world economy is seen to be slowing. Our particular message from the Cairns Group is simple. We see that after some 50 years since the General agreement on Tariff and Trade was created, there is still a great need to end discrimination against agriculture; to have agriculture fully integrated into the multilateral trade system; to bring about an end to export subsidies in agriculture; to open up market access to agriculture; to see substantial improvements in market access; and to see a substantial reduction in domestic support for agriculture. We see that agricultural reform is fundamental to the interests, not just of this group, but to so many WTO members from developing countries. Achieving agricultural reform, which has so far eluded previous meetings, will be of significance to all, but particularly to those developing countries. We have released a communiqué, which you now have. That explains fully the position of the Cairns Group. I now invite your questions, which my Cairns Group colleagues and I will be in a good position to answer.
Q: In the past, the agricultural sector has been deal breaking in the GATT talks. Do you think it is going to be one this time?
Chairman: The Cairns Group was united this morning in the views that I have expressed in my summary and the views that are now contained in the communiqué. We feel that the current ministerial declaration lacks ambition, it does not go far enough in the context of trade liberalization. There is a very united and strong determination of the Cairns Group to achieve a better outcome than the wording of the current declaration suggests and we will do our utmost as a group over the days ahead to bring about that outcome.
Q: What group is ….inaudible….
Chairman: We all acknowledge that agriculture is not the only thing on the agenda. And we are all conscious, individually and collectively, of the need for a new round. We believe that the time for agriculture has come and feel quite strongly about this. Whilst I do not want to forecast what might be the outcome by Tuesday, we will be putting our views on agriculture and the need for reform very strongly.
Q: Would it be sufficient for the Cairns Group if the EU were to reduce agricultural support subsidies instead of just phasing them out?
Mr Jim Sutton, Minister of Agriculture and Minister for Trade Negotiations, New Zealand: Our response would be that it would not be good enough. Agriculture has been the poor relation of all industry sectors for at least two generations under the WTO and the GATT. We have some catch up to do. It would be no more acceptable to us that the EU simply wound back slightly its export subsidies than it would to be to the EU if we all started manufacturing motor vehicles and dumping them at heavily subsidized prices in the EU markets.
Q: If it comes down to it, would you sacrifice the round if you don’t get the deal on agriculture?
Chair: I am reluctant to go into this area and I do so deliberately. It is wrong to forecast prior to commencement of the formal meeting, so I am not going to forecast and I suspect I speak for all my colleagues about what the outcome might be. I can only stress again that we are united. I repeat the New Zealand minister’s view that catch-up in agriculture is needed. Everybody at this table believes that and we will do our utmost to bring about liberalization in the agricultural sector, which is in our interest and in the interest of so many emerging nations. I do not want to take it to the point of what that means come Tuesday, as that would not be constructive.
Q. On the internal subsidies, Punta Del Este asked for benchmarks and timetables. What sort of vision does the Cairns Group have about these benchmarks and timetables?
Mr Lyle Vanclief, Minister for Agriculture and Agri-Food and Minister Co-ordinating Rural Affairs, Canada: Just a couple of comments on some of the other questions as well. I think we need to recognize the question of whether agriculture is a deal-breaker or not. At the Quebec Uruguay Round, everyone hoped that the Uruguay Round would settle before it did. In 1989 in Montreal, there was an expectation the Uruguay Round would settle. There was not an agreement on the approach to agriculture and what people wanted at that time. The Uruguay Round did not end – it did not end until 1993 - until there was some agreement as far as text on agriculture was concerned. And I think that view is still a very strong view here, including among the Cairns Group as well. It is extremely important and we are not going to sacrifice our views on what we want to see happen on agricultural trade just for the sake of having a launch. What we are saying is that to get that, we need a broad launch.
On the specific question of on benchmarks and timelines, as you know, the agricultural negotiations have been going on now for well over a year. So, the timeline is that we want to see the continuing discussions and negotiations on agriculture to end quickly. Will we end up with a specific timeline? What we want to be very clear on is that we do not want this to be totally open ended, so that it is spun out and spun out and we don’t get anywhere. As far as the benchmarks are concerned, at this stage, we may all have individual specific things we would like to get out of this round. But the purpose of the meeting is to get a round launched so we can get at those issues that are on the table for us to achieve.
Q: A question for the Latin American Ministers, how does the Cairns position in agriculture parallel with what you might be negotiating with the United States in a FTAA. Is there a similar dynamic happening on this issue?
Mr Horacio Chighizola, Deputy Foreign Minister, Argentina: These are different negotiations. One is a regional negotiation. This one is a broad multilateral negotiation. Here we are discussing the global scope and all the countries are putting on the table all measures that would be distorting agricultural trade. In the case of bilateral or regional negotiations, you usually go further than what you can reach at the multilateral level. So here, we and the world are discussing how we can move to put agricultural in a similar situation to that of the rest of the goods. In this sense, all Latin American Cairns Group members are strongly behind trying to achieve this commitment. After that, the FTAA could be progressed further for additional, usually WTO plus, decisions at a regional level.
Q: The EU says it is willing to reduce export subsidies, but not eliminate them, but the US is also claiming that it has to be done under the precondition that in these talks there have to also be talks about other forms of export support measures such as state monopolies or food aid programs, etc. What is your view on that?
Chairman: The Cairns Group believes that there has to be a clear distinction between the agricultural imperatives that we have outlined to you today and the non-trade issues. You have referred to a number of the non-trade issues. We believe there is a tendency to confuse and many ways distract from what agricultural needs in the interest of our members and those emerging countries.
Prof Dr Luis Maria Ramirez Boettner, Ambassador and Permanent Representative to the WTO, Paraguay: We believe that agriculture should have three pillars: the subsidies should be eliminated totally; all the distorting domestic support because there is some support which is reasonable but there are others which are distorting free trade and the third is the access to markets. We believe that there are some trade concerns that should be taken into account. But they are not in the same level as the three pillars that we look for the liberalization of the agricultural sector. So we understand that there are other issues that are important, but for us, and specifically for Paraguay, agriculture is not just fundamental, it is vital. So we believe that the three pillars should be accepted in the negotiations that we are going to begin here in Doha. We are optimistic because we have been looking for this for over 15 years and I believe it is time that agriculture be the subject of free trade.
Q: In regard to export subsidies, Pascal Lamy says that the EU can’t agree to anything language that preaches a foregone conclusion of what the negotiations are going to achieve. He said that the purpose of this meeting is simply the launch of negotiations, not to conclude them and that any language that suggests eliminating or phasing out export subsidies is inappropriate. How do you answer that and why is it so important to the Cairns Group that there is some language that says phase out or eliminate export subsidies?
Chairman: The Cairns Group does not agreement with the approach of “lets get a round going and see what happens”. We believe the basis extremely important that we must set our objectives at the very beginning and I can only repeat what my colleague from Paraguay has just elaborated to you that those three pillars are essential to where we believe we must end up with agriculture. It is not simply a case of starting and hoping that you achieve some outcomes through the negotiation process. I would further add that two years have been lost since Seattle and there is a feeling that we must move sooner rather than later. So, we stick strongly to the view that the current text is not strong enough. It certainly lacks the ambition. It does not have those principles that we regard as essential incorporated within it. We believe to start there would simply give a message that would not bring the result we want.
New Zealand: Pascal Lamy is one of the world’s most skilful negotiators. We have all watched as we have seen first the GATT and then the WTO negotiate on agendas which did not prescribe our (inaudible)…and the result of that has been that manufactured industrial goods applied tariff rates have reduced from around 50% to less than 4% over the lifetime of the GATT and the WTO. The applied average tariff rate applied to agricultural goods is still in excess of 40% - that is the difficulty. As agricultural economies, we are not being given the opportunities to specialize in those things we are good at: the opportunities that the industrialized nations take for granted for their principal products. It is time for some catch up…not for clever words of diplomacy but for real commitment to providing justice to the people that we at this table represent.
Q: Does anyone recall what the language looked like at the end of the Seattle negotiations in regard to export subsidies? Did you have stronger language at that point than you have now in the document?
Canada: I think we want to forget….
New Zealand: It was incomprehensible language….
Chairman: I think lets not go back there.
Paraguay: I want to remind that export subsidies are prohibited on all other goods, so what we are trying to achieve is what all other goods already have. This is not unusual,. It is simply a reasonable leveling of the field.
Q: I don’t see where you make the difference between trade disturbing subsidies and non-trade disturbing subsidies? As I see it, you have some understanding of what these concerns are. What about the environmental issues in trade, especially in agriculture ……inaudible
New Zealand: We recognize that there are non-trade concerns that are legitimate objects of public policy and every country represented in the Cairns Group will have policies that are designed to protect the rural environment, to preserve environmental values, to strengthen and support rural communities, but those subsidies do not involve production-distorting or market- distorting subsidies for farm production. It is perfectly possible to have policies that directly address those non-trade concerns but which do not distort and damage the market for farm products. All we are asking for is a commitment from the industrialized nations that if they wish to have their fence posts all painted white or their hedge rows are trimmed, subsidize the painting of fence posts or the trimming of hedgerows, but don’t subsidize the production of extra farm commodities that can’t be sold profitably in the hope that some of that money will end up being spent on paint!
Q: Do you regard the US as an ally or part of the problem?
Chairman: The group this morning was reassured by a number of comments and statements that were made by Secretary Veneman and Ambassador Johnson. There is little doubt that those assurances received previously from the US on the concerns that we have on agriculture, were present again this morning. Notwithstanding that, we acknowledge that there are some complex issues at stake here and it’s not for me or for my colleagues to give to you where the US is going. But we were reassured by their frankness and their broad support, which was expressed at the meeting this morning.
We will leave it there and thank you very much.