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The Cairns Group

25th Ministerial Meeting, Cancun, Mexico

Communique. Cancun: A Moment of Choice

Agriculture is the central issue facing Ministers at Cancun, Cairns Group Ministers stressed when they met in Cancun prior to the commencement of the WTO Mid-Term Review. Building momentum on agriculture will determine whether Ministers will be in a position to give political guidance and show leadership across the entire agenda of negotiating issues.

Our mandate calls for a programme of 'fundamental reform' of agriculture. At Doha some two years ago all Ministers agreed to "...substantial improvements in market access; reduction, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade distorting domestic support".

The plain meaning of those agreed words is now the central political issue facing us in Cancun. This meeting must impart positive momentum. Cancun is not the end of the negotiations; but it must be a step forward.

Political guidance is essential. Our guiding principles will be: the level of ambition must be consistent with the agreed mandate; there must be a development dimension to each of the three 'pillars' of domestic support, market access and export subsidies; 'balance' in this negotiation can only be found on a global basis, taking account of all areas of the Doha Development Agenda.

Some fragile points of convergence already exist. We are seeking to build up the modalities on agriculture step by step. Certain proposals of great weight now envisage starting with "frameworks" for modalities. And there are some elements in common in these proposals, including, of course, in the text submitted by the Chairman of the General Council on his own authority.

We stand ready to engage in a constructive and flexible way to develop a consensus around those common elements. However, the framework that Ministers endorse at Cancun must be balanced and point in the direction of the result that we consider would be consistent with the plain meaning of the Doha mandate.

This means there will be no consensus in Cancun unless Ministers direct the Doha Round to deliver :

  • A date for eliminating all forms of export subsidy on all products. We are ready to discuss faster elimination of export subsidies on products of current particular interest to developing countries. However, the suggestion that there is a distinction that can be drawn long term between products of interest to developing countries and other products is incoherent. All forms of export subsidies must be eliminated progressively through a reform programme to be defined in this Round, not some future multilateral negotiation.
  • Substantial reductions in trade distorting support. These cuts have to be measured against spending by the major subsidising countries: fictional cuts on the basis of reinstrumentation will not suffice. In some sectors, such as cotton, the level of current trade distorting support has reached unacceptable proportions in terms of its impact on poor people not only in the Cairns Group but in some of the most vulnerable developing countries.
  • Substantial improvements in access for our exporters for all products. We are ready to contemplate flexibility on how such 'substantial improvements' can be delivered. We commend our earlier proposals, as well as more recent ideas on market access contained in proposals from a wide range of developing countries, for the urgent consideration of our negotiating partners.
  • Operational mechanisms with respect to key elements of Special and Differential Treatment. There is an agreed long-term objective of a fair and market oriented trading system but we have to cushion developing country farmers on the margin of existence from the impact of the transition. In this regard we recognise the development needs of developing countries including food security and rural development.

Ministers at Cancun must give political direction on the level of ambition, even if the crucial step of agreeing on final numbers for the main commitments may need to be negotiated after Cancun. We Cairns Group Ministers will take as our starting point the high level of ambition envisaged by the Doha Declaration. We are, of course, prepared to consider extended timetables for progressive liberalisation so as to facilitate consensus.

Ministers at Cancun must also agree on a date for establishing modalities so that the negotiations can conclude by 1 January 2005 in line with the Doha mandate.

With respect to developing countries, far greater attention is now required on their special difficulties in the agriculture area. Certain recent proposals have ignored developing countries' needs in this area. Allegations that Cairns and other key developing countries expect to make no contribution to the reform process are unwarranted. Cairns Group and certain recent developing country proposals all envisage tariff reductions - but reductions lower than those applicable to developed countries and spread over longer implementation periods. The implementation of any such commitments needs to be done in such a way that it is interlinked with, and takes account of, substantial reductions in trade-distorting domestic support and the phasing out of export subsidies. This will reduce the impact of subsidised imports in developing country and world markets and have a very positive impact on facilitating adjustment and creating better opportunities for farmers in countries that do not resort to trade distorting subsidies.

Developing country agricultural policies do not lie at the heart of the current severe distortions in world agriculture markets. The weight of the adjustment must be borne by those primarily responsible for those distortions. We can see that developing countries, not just Cairns developing countries, are prepared to make a contribution to this process, even on market access. However, in the Cairns Group alone some 300 million people, most of them in rural areas, live on less than $2 a day. Their capacity to absorb adjustment shocks to their domestic market, when they live on the margin of existence, should be obvious to all. Their need for improved opportunities to export should be equally obvious.

The international community faces a moment of choice at Cancun. It is a choice of great importance to the international trading system. Decisions at this meeting have to recognise that agriculture is central to delivering the 'development dimension' of the Doha Development Agenda.

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