The Cairns Group
2nd Cairns Group Ministerial Meeting Ottawa, Canada
Ministers and representatives of the members of the Cairns Group (Argentina, Australia, Brazil, Canada, Chile, Colombia, Hungary, Indonesia, Malaysia, New Zealand, Philippines, Thailand, Uruguay) met in Ottawa on 21-23 May 1987. Representatives from the USA, Japan and the European Communities were present as observers at the meeting.
The keynote speech was delivered by the Right Honourable Brian Mulroney, Prime Minister of Canada.
Ministers reviewed international developments affecting agriculture, in particular the launching of a new round of trade negotiations under the GATT and the outcome of the recent meeting of ministers of OECD countries, and discussed options for future action by the group.
Ministers welcomed the initiative of Canada in offering to host the meeting and noted that this was consistent with the strong support given by Canada to the group's activities since its inception and Canada's commitment to agricultural trade reform.
Ministers noted that the Cairns Group has achieved notable successes in the nine months since they first met in Cairns, Australia.
The group had played a crucial role at the GATT Ministerial Meeting at Punta del Este, Uruguay, in September 19869 in ensuring that for the first time agriculture would be placed at the centre of the stage and comprehensively dealt with in a round or multilateral trade negotiations.
This had been followed in January 1987 by success at the GATT in Geneva in achieving a workable negotiating structure which cleared the way for essential background work to be completed and proposals for agriculture trade reform to be lodged by end of 1987.
Ministers noted that group co-operation and the concerting of positions had been consolidated and enhanced following a meeting of Senior Officials in Bangkok, Thailand in February 1987.
Since that time there have been several productive meetings of embassy representatives in key capitals to discuss trade and agricultural policy developments in host countries. Additionally, a system of contact points in each Cairns member country has been established to allow for timely communication on matters of mutual concern.
Ministers welcomed the fact that close group co-operation had been particularly evident in the critical preparatory phase of negotiations in Geneva.
As agreed in Bangkok, the group has worked closely on isolating the basic problems in agricultural trade and their causes and in identifying basic principles which should underpin the negotiation of reforms in the GATT round. This collaboration was influential during discussions on agriculture in Geneva in February.
Ministers noted that there have been encouraging parallel developments in other international meetings.
They welcomed the proposals and analysis which were provided by Australia's Prime Minister at Davos, Switzerland, in January and by Canada's Minister for International Trade at the meeting hosted by the New Zealand Government at Lake Taupo in March. These initiatives have given considerable impetus to the trade reform debate.
Ministers welcomed the wide and growing acceptance of the urgent need for reform and in this context, welcomed the far-reaching outcome of the recent OECD Ministerial Council Meeting in Paris in which agriculture featured prominently. They noted that the OECD Communique contained an important set of principles on which agricultural reform in all countries could be based.
Ministers agreed that early action was needed to de-escalate global tensions in agriculture.
They welcomed the explicit recognition by OECD Ministers that excessive support policies are at the root of the distortions which plague agricultural trade. They saw this recognition as a major step in the development of political will, especially among key OECD countries, which is necessary if the rhetoric of agricultural reform is to be translated into concrete commitments to improve access and progressively phase-out all forms of subsidies which adversely affect trade.
Ministers welcomed in particular recognition by the OECD of the impact of agricultural trade distortions on developing countries. Action to remove measures distorting trade in commodities will make an important contribution to export prospects for commodity dependent developing countries. They noted the special importance of these measures for those facing onerous debt burdens.
Ministers noted, however, that existing political will, needs to be translated into actual reform in the Uruguay Round context. In this regard they welcomed agreement by OECD Ministers to pursue negotiations vigorously and the call for comprehensive negotiating proposals to be tabled promptly.
They also noted that attention had been drawn in Paris to the fact that the Punta del Este Declaration provides for agreements reached at an early stage to be implemented on a provisional or definitive basis by agreement prior to conclusion of the negotiations. They considered that suggestions of an "early harvest" or mid-term package in the GATT Round should include inter alia, both agriculture and tropical products. They recognised the particular importance of trade in tropical products for a large number of developing countries.
Finally, Ministers welcomed the commitment of OECD countries to refrain from initiating actions which would stimulate production of commodities in surplus, or isolate domestic markets further from international markets to act responsibly in disposing of surplus stocks and refrain from confrontational and destabilising trade practices.
Ministers agreed that it was vital that heads of governments of economic summit countries, at their meeting in Venice, Italy in June give agriculture high priority on their agenda in order to reinforce the OECD policy commitments and to provide impetus comprehensive negotiations on agriculture in the GATT Round. Ministers noted, however, that in spite of intense activity internationally on agriculture over the past year, the problems of low prices and surplus production had worsened. They therefore emphasised the importance of keeping up the political momentum for remedial action to be taken in the short to medium term while the GATT negotiations are in progress.
Ministers exhorted the European Community, the United States and Japan to live up to the spirit and the letter of the commitments which were embodied in the GATT Punta del Este Declaration and in the OECD Communique of 13 May.
While welcoming commitments to negotiate reform of agricultural trade, Ministers noted that there were nevertheless disturbing signs that further trade distorting measures were being contemplated in certain major trading countries.
For example, while there have been positive signs of price support restraint in the EC which are to be commended, Ministers expressed serious concern over proposals by the European Commission to introduce a consumer tax on vegetable and marine oils and fats. The Ministers were of the view that such a measure would be inconsistent with the commitment to a standstill which was adopted at Punta del Este. They affirmed that it would adversely affect the trade of several fair trading countries and would risk a serious and destabilising trade dispute.
In the United States, Ministers noted, the situation potentially is even more serious. Despite efforts by the administration designed to substantially cut net expenditure on agriculture, protectionist trade legislation currently before the congress could, if passed, damage innocent trading partners, breach USA GATT obligations and severely impact upon the international climate for reform.
Notable amongst these proposed measures is the extension of and increased funding for the export enhancement program which has already so adversely affected world grain prices.
Ministers called upon all countries to resist protectionist pressures and urged an early commitment to instituting a truce.
Against this background, ministers discussed how the Uruguay Round negotiations on agriculture should proceed.
They agreed that basic proposal for the negotiations should be tabled in Geneva before the end of the year and that officials should continue to work on developing proposals in a co-ordinated fashion for consideration by their respective ministers, and which could be submitted in Geneva by September.
In this context they welcomed the intention of the United States to table a proposal for the negotiations at the July meeting of the Uruguay Round Negotiating Group on Agriculture.
Ministers agreed that negotiations should proceed in Geneva at such a pace that, by the end of 1988, agreement is reached on an international program to reform and liberalise international trade in agriculture. In the interim, Ministers urged that all governments freeze and reduce subsidy programs that distort world trade, and that they should do so as soon as possible in order to improve the negotiating climate.
Ministers agreed that to be successful, the negotiations should include the following basic objectives:
- inclusion of all measures which adversely affect trade in agriculture
- a rapid and substantial reduction in those levels of support for agriculture which distort the international market place.
- establishment of new GATT rules or disciplines to ensure the liberalisation of agricultural trade.
- agreement on specific measures for the phase-down of market access barriers to trade in agriculture, and subsidisation and all other measures which have, a negative effect on world agricultural trade.
- agreement on principles to prevent disruption of world markets in the course of containment or reduction of structural surplus stocks.
Ministers re-affirmed that the principle of differential and more favourable treatment for developing countries as embodied in the GATT and related instruments as well as in the Punta del Este Ministerial Declaration applied to negotiations on agriculture.
Ministers agreed that the Venice Economic Summit provided a significant opportunity for the leading economic powers to commit themselves to reducing all subsidisation and other measures which have a negative effect on world agricultural trade and to advancing negotiations to liberalise agricultural trade in the
Ministers commended the Prime Minister of Canada, the Right Honourable Brian Mulroney, for playing a key role in having agriculture addressed as a major item of importance at the Tokyo Economic Summit in 1986.
Ministers hoped that Prime Minister Mulroney would be prepared to play a similar role at the Venice Economic Summit by conveying the importance attached by the group to a commitment by summit participants to address urgently the need for early agricultural reform.
Ministers congratulated the Government of Canada for its initiative in convening this meeting and expressed their gratitude for its hospitality.
The next ministerial meeting will be weld in argentina at a time to be agreed, in the light of developments.
23 may 1987
Argentina, Australia, Brazil, Canada, Chile, Colombia, Hungary, Indonesia, Malaysia, New Zealand, Philippines, Thailand, Uruguay