Thank you, Chair, for convening this session.
With the Ministerial meeting now less than three weeks away, the next revision of the draft modalities text will be critical in setting the parameters for discussion. In those areas where convergence has not yet been reached, the Cairns Group looks forward to a text that lays out the options for Ministers in as clear and simple a manner as possible.
In the domestic support pillar, any revisions to the Green Box must strengthen the text and not weaken it - this type of support must remain genuinely non trade distorting. More generally, it is essential that there be effective cuts to trade distorting support entitlements and strong product-specific disciplines. And, as we have previously emphasised, the mandate for cotton must be fulfilled.
On export subsidies, we remain firmly of the view that substantial reductions by the mid-point of the implementation period should be achieved through joint reductions in volume and value commitments. The disciplines on food aid must eliminate displacement of commercial trade by surplus disposal in the guise of aid. Within export competition, we have been concerned by the direction of some discussion on export credits. While recognising the need for S&D provisions that provide targeted solutions to the needs of specific recipients, open-ended flexibilities on repayment terms in paragraph 5 would indirectly allow providers to escape the strict 180 day rule in the July framework.
Within market access, discussions in recent weeks should allow some useful improvements to the text, with gaps and outstanding issues further narrowed. New architecture should not, however, prejudice negotiating positions. For instance, we retain our firm position that in-quota rates in developed countries must be reduced to zero. Any new formulation in the text should not prejudice this important commercial outcome – which is a question of ambition to be decided by Ministers. We also need a clear approach that avoids complex formulas and inconsistencies in the treatment between sensitive and non-sensitive lines or between existing and Doha Round quotas. Import mark-ups applied by some Members should be subject to this same treatment. Similarly, Cairns Group members firmly maintain their position that there should be no new tariff quota creation. This issue must be addressed separately and not bundled up with provisions on in-quota duties. The text also needs to insert an effective tariff cap, not one that is undermined by overly generous buy-outs or exceptions.
Cairns Group members also underline the importance of eliminating the SSG in developed countries on day one of the implementation period, securing real improvements in tariff quota administration, and fully meeting the mandate on tropical and alternative products. We welcome reports that real progress has been made in small group discussions on this issue. The Cairns Group is also concerned to ensure that the results of discussions on preference erosion do not threaten to undermine liberalisation of tropical products or erode outcomes on Sensitive Products.
On Sensitive Products, the ongoing release of data and verification exercise must be finalised. It is important that both exporters and importers fully engage in the data verification process, including by addressing technical errors that may arise. Members need complete and transparent data in order to fully assess the options in the text. Paragraph 8(a) of Annex C makes clear the need for Members to have sufficient opportunity to assess the data before modalities are adopted, and we urge those Members intending to designate Sensitive Products to observe this principle. Further delays in the provision of this data jeopardize the prospects for a successful outcome at the end of this month.
The Cairns Group continues to focus its efforts on securing a modalities package that fulfils the mandate of substantial reform in all three pillars, and will continue to do all it can to help set the stage for a successful Ministerial meeting.