What developing countries want from the talks is a more open process for the agriculture negotiations, including more developing country representation. They also want a deal that includes special and differential treatment that takes their development needs into account. Such treatment would include less stringent obligations than that of the industrialized countries, as well as special measures to help them protect vulnerable segments of their agricultural sectors. Because developing countries have much larger portions of their populations engaged in farming than rich industrialized countries, these special treatment measures are seen as vital for the protection of the livelihoods of hundreds of millions of small subsistence farmers, many of whom are already living in extreme poverty.

Developing countries have made some progress in voicing their concerns. The G-20 has become a major force in the agriculture talks, and India and Brazil are now included in an elite group of six countries—now known as the G-6, comprised of the United States, the European Union, India, Brazil, Japan, and Australia—amongst whom agreement is seen as vital for breaking the deadlock. This is a major change from the previous round when the United States and the European Union effectively imposed their bilateral deal on the rest of the WTO membership. But while developing countries have been more prominent in the Doha agriculture talks in recent years, securing an actual agreement on the issues of concern to them has been extremely difficult.

Mapping the Fault Lines

With the shift in negotiating power evident, it has become increasingly difficult for the United States and the European Union to bully their way through the agriculture talks. Both have tried this strategy in recent months, but the divisions have only deepened. When the talks finally collapsed, the fault lines had become clear and the gaps were significant enough to prevent a deal from materializing.

Focused on improving market access for agricultural products, the United States has insisted on deep cuts in agricultural tariffs for all countries. It is not enthusiastic about any sort of special treatment with respect to tariff cuts, which it largely sees as creating loopholes that would erode any potential market access gains. At the same time, however, the United States is only willing to make modest cuts to its domestic farm subsidies. Its proposal on domestic support would allow the country to spend US$22.4 billion per year in farm subsidies, an amount that is actually higher than what it currently spends. The United States is also insisting on including a new Peace Clause in the deal that would allow it more time to adjust its policies. Following the expiration of the previous Peace Clause, Brazil successfully challenged the United States on its domestic cotton subsidies, which were deemed by the WTO dispute panel to be trade distorting. The United States would prefer to avoid any further litigation along these lines in the future.

The European Union made it abundantly clear at the 2005 WTO Ministerial Meeting in Hong Kong that it will not entertain deep cuts to agricultural tariffs, and it has only made weak proposals on this front. Moreover, it has called for up to eight percent of all countries’ tariff lines to be designated as sensitive, which would allow countries to exempt them from the full tariff cuts. While it is not willing to reduce tariffs to a significant degree, the European Union insists that the United States make much deeper cuts to its domestic farm support, with an absolute maximum amount of allowable support of US$15 billion, but preferably much less than that amount.

Developing countries are seeking cuts to agricultural tariffs somewhere between the US and EU proposals, but they are insisting upon a less stringent schedule of tariff reductions for developing countries. They are also asking for up to 20 percent of tariff lines for developing countries to be designated as “special products”—those that are important for livelihood security—which would be exempted from tariff cuts.

Developing countries are also demanding a special safeguard mechanism which would protect them from surges of cheap imports of agricultural products that harm local production incentives, as well as asking for drastic cuts to domestic support in the United States in particular, to a level of no more than US$12 billion annually.

With the major players sticking close to these positions over the past year, it is not surprising that the talks fell apart. The only proposal all parties have agreed to is the need to eliminate export subsidies, which are widely seen to be highly trade distorting. As for the rest of the issues, little progress has been made.

Implications of the Current Impasse

The major players immediately began to point fingers of blame following the collapse of the talks. The European Union contends that the United States forced the talks to fail by refusing to agree to adequate cuts to its domestic subsidies. The United States defended its position, saying that the European Union and the developing countries had not gone far enough with respect to improving market access.

Developing countries expressed disappointment with the unwillingness of the United States to further reduce its domestic subsidies unless developing countries drop their demands for special treatment with respect to tariffs. They see this as an attempt to force developing countries to pay for US cuts to domestic support by opening their markets to US products. This, for them, is not promoting development, but rather spells disaster for millions of the world’s poorest farmers. They are also disappointed with the EU position which would lock many developing country exports out of European markets.

For developing countries, the point remains that the United States and the European Union still protect their agricultural sectors to such a significant degree that they distort global markets. Because developing countries cannot afford to provide subsidy support for their own agricultural sectors, tariffs and special safeguard measures are the only tools that they have to protect themselves from cheap, subsidized imports from industrial countries. Without these tools, developing country farm sectors will be at risk, and the livelihoods of their farmers will be destroyed.