The WTO’s July framework paper is the result of months of deliberation between developed and developing country members of the WTO after the failed ministerial meeting in Cancun last year.

“The framework paper basically commits the Philippines to undertake tariff cuts on all agricultural imports. It runs counter to the Department of Agriculture’s repeated announcement last year that the government will not agree to any further market access concessions in the WTO negotiations,” lamented PPI executive director Romeo Royandoyan.

“Under the proposed agreement, we will have no choice but to further open our agricultural markets. Unfortunately, our local farmers cannot afford further tariff concessions. In fact, many of them are asking our government to increase their tariff protection,” he added.

Royandoyan argued that the framework paper also failed to sufficiently address the developing countries’ call for the dismantling of the developed nations’ huge and elaborate subsidy system. “The provisions on domestic support are a clear accommodation of the US and EU’s interest to maintain a big chunk of their trade-distorting domestic support.

The US got what it wanted. It was able to expand the blue box in order to accommodate its subsidies that can no longer be absorbed as part of its aggregate measure of support (AMS),” explained Royandoyan.

The framework agreement expanded the definition of the blue box to include direct payments that do not require production. Previously, the blue box was limited to direct payments under production limiting programs, preventing the US from maximizing this domestic support facility.

Most of the US support is concentrated in the amber box, which grew from US$6.24 billion in 1995 to US$14.4 billion in 2001. As such, the US needs the expansion of the blue box in order to accommodate reductions in its amber box.

PPI also scored the framework paper for its ambiguous provisions on domestic support reduction. “The proposed agreement on agriculture did not set very clear targets on domestic support reduction. Indeed apart from the 20 percent reduction on the first year, developing countries have no assurance that the remaining trade-distorting support will be decreased substantially in the succeeding years,” said Royandoyan.

The US and the EU’s total trade distorting domestic support reached US$21 billion and US$66.4 billion respectively in 2001.

The proposed agreement also allows blue box payments of up to 5 percent of a country’s total agricultural production, effectively creating a new deminimis. For the US, for instance, using 2001 data, this would mean an additional US$5 billion in allowable subsidies.