Doha Round

The Issue:

The Doha Round of global trade negotiations, halted in June 2007 after the members of the World Trade Organization (WTO) failed to break a stalemate over agriculture (See AAFA Press Release). While WTO members and officials have made positive statements as to their willingness to overcome difficulties and the importance of concluding the round, little substantive work seems to have been done to bridge underlying differences. Developed countries are shielding their agricultural sectors too much while developing countries are less interested in opening up their industrial goods markets. As with all Doha Round collapses, it is unclear if this is indeed the final collapse or not. It certainly means that the current effort – to see if a deal can be built around agreement between EU, US, India and Brazil – has come to a halt.

Once they are brought to a successful conclusion, the talks could lead to lower tariff and non-tariff barriers worldwide to U.S.-made and U.S.-branded apparel, footwear and textiles. In contrast, some groups, as part of the talks, have advocated new safeguards on textiles and clothing to restrain China, India, and other large producers in a post-quota environment.

AAFA on the Issue:

AAFA supports the successful completion of the Doha round as long as it substantially reduces and/or eliminates tariff and non-tariff barriers in key markets worldwide. AAFA remains opposed to efforts that would use these talks to create new trade barriers or safeguards, particularly with respect to textiles and clothing.

The Latest News:

12.17.07

AAFA joined 40 other major agricultural, manufacturing and services organizations and companies in sending a letter December 12 to the Bush administration expressing their opposition to the first draft of the Rules text released at the end of November as part of the ongoing Doha Round of World Trade Organization (WTO) negotiations. The letter urges the Bush administration to seek the necessary and required clarifications and improvements in the Rules text that will benefit US farmers, US manufacturers, US service providers, US workers, US consumers and the US economy.

07.30.07

Facing a possible presidential veto and calling into question the US commitment to a successful conclusion of the ongoing Doha Round of global trade negotiations, the US House of Representatives on July 27 approved legislation (HR 2419) authorizing a new five year farm bill on a largely partisan vote of 231 to 191. The bill, which has a price tag of almost $286 billion, would preserve the existing system of subsidies for commercial farmers and add billions of dollars for conservation, nutrition and new agricultural sectors. Despite a rash of World Trade Organization (WTO) cases challenging the legality of the US cotton program, the bill would extend and expand the current cotton subsidies, including the so-called "cotton fee" charged to US importers of cotton apparel. Further, the sheer size of the subsidies included in the legislation further jeopardizes global trade talks already stalled, in large part by the United States' refusal to reduce its agricultural subsidies.

07.23.07
In a last ditch attempt to save the faltering Doha Round of global trade talks, the World Trade Organization (WTO) on July 17 issued draft negotiating texts on the crucial non-agricultural market access (NAMA) and agriculture aspects of the trade negotiations. The draft texts attempt to forge a compromise between the competing interests of the 150 WTO member countries, particularly among the so-called G-4 countries -- the United States, the European Union (EU), Brazil and India.

Under the proposed NAMA text, which includes apparel and footwear, all non-agricultural tariffs on imports entering the United States and other developed countries would be reduced to a maximum of 8 or 9 percent over a period of five years while developing country tariff rates would be reduced to a maximum of 19-23 percent over a period of nine years. Regrettably, the draft text would allow developing countries to either exempt five percent of their imports outright from the tariff reductions or subject 10 percent of their imports to smaller tariff cuts. Least-developed countries are exempted from the tariff reductions altogether. Least-developed countries, however, would still receive duty-free, quota-free access to the United States and other developed country markets for 97 percent of their products. Finally, in order to alleviate so-called "preference-erosion" for US and European trade preference countries (like Africa and the Caribbean), US and European tariffs on imports of certain products (almost all apparel products) would be reduced over a seven-year period, instead of five years.