A Forum-Dialogue with Philippine Officials on WTO and ASEAN Matters
June 13, 2007, 1:00-6:00 PM
SEAMEO INNOTECH Center, Commonwealth Avenue, University of the Philippines, Diliman, Quezon City
Background of the Forum
Soc as the moderator of the afternoon’s forum-dialogue welcomed the participants to the event. This was then followed with a round of introductions from participating organizations such as local NGOs, AFA members, and regional organizations (RWAN, AsiaDHRRA, CODE-NGO, KAMMPIL, IDEALS, Inc., 11.11.11., AFA members, FFTC, Focus, Tambuyog Development Center, SEAFISH-J, etc.). Ka Rene Cerilla formally gave an opening remark and Khun Paew provided the forum’s objective and what to expect from the panelist.
Soc gave a run down of the speakers/resource persons: (1) Jerome Bunyi who spoke on the updates on the WTO Negotations/SSM/SP; (2) Jason Anasarias who gave an update on the ASEAN Charter; anad (3) Frances TC. Lo on the EU-ASEAN FTA.
Structure and Design of the Forum
I. Introductory Activities
Registration
Opening Prayer
Welcome Remarks: Rene Cerilla, President, PAKISAMA
Introduction of Participants
II. Objectives of the Forum-Dialogue: Khun Prawit Pancharoen, Chairperson, Sor Kor Por, Thailand
III. Update on SP/SSM: Jerome Bunyi, WTO Affairs, Policy Research Service of the Department of Agriculture
IV. Update on ASEAN Charter, Jason Anasarias, Assistant Director, ASEAN Affairs, Department of Foreign Affairs, Philippines
V. Update on EU-ASEAN FTA, Frances TC. Lo, 11.11.11 Pilipinas
VI. Open Forum
VII. Conclusions and Way Forward: Esther Penunia, Secretary General, AFA
VIII. Closing Remarks: Seo, Jung-Eui, Chairperson, AFA
IX. Solidarity Night
Summary of Issues
? Understanding the Trade Negotiations (whether multilateral/regional or bilateral)
o Technical Work and the Language of Negotiations (e.g. computing tariff formulas, finding causality between import surges and decline of prices for agriculture produce)
o Power Politics: who has the stronger and more influential voices in the WTO negotiations, bilateral trade negotiations and even the ASEAN Charter process?
o Negotiating Positions of (Groupings of) Developing Countries vs. Developed Countries: what industry to trade off and how to leverage?
o Special Products and Special Safeguard Mechanisms as important issues but sailing on rough seas
? Multilateral vs. Bilateral Trade Agreements/Arrangements?
o Does the mushrooming of bilateral free trade arrangements focusing on market access spell death for multilateralism? Is it a question of lesser evil?
o The need for alternatives or new framework(s) of international agri-trade agreements based on social equity, gender equality, and fair trade.
o EU model vs. ASEAN model or people’s alternative regionalisms (proposals from civil society)
? Transparency, Accountability and Access to Information
o How is the process going (e.g. WTO Negotiations, the ASEAN Charter process, EU-ASEAN FTA negotiations) if we do not have access to relevant documents and no space for engagements?
o Accountability of negotiators to their constituencies especially to the basic sectors (who are they negotiating for?)
o Real or token consultations? Who gets involved and how to engage in the process (representation)?
? Role of Rising Powers in Asia (e.g. China, Vietnam, India) in the negotiations and how to deal with them as CSOs
? Role and Participation of CSOs and Rural Movements
o How to pressure our own governments?
o Capacity-building and information dissemination
o Question of strategies
Concrete Action Points
? On the WTO negotiations, vigilance and watchfulness on the developments of the talks. Pressure the big players of G33 such as Indonesia and the Philippines
? On the ASEAN Charter process, urge the HLTF members at the national level to conduct consultations (e.g. VNFU in Vietnam) and share the draft with each other. Push for another regional/national consultation after the draft is released.
? On the EU-ASEAN FTA, push for transparency and participation of CSOs in the negotiations to release the text and conduct consultations. Work with national and regional governments and conduct of studies to analyze the possible impacts of an EU-ASEAN FTA to small farmers in the region. VNFU as a key contact in disseminating the “negotiations architecture”.
Update on WTO Doha Round of Talks: Agriculture Special Products & SSM
Jerome Bunyi, WTO Affairs, Policy Research Service of the Department of Agriculture
Jerome gave a comprehensive update and a rather technical presentation on the status of the WTO negotiations, positions of key players, and particularly the situation on the SSM and SPs. He began with a refresher of what the negotiations on agriculture is all about, i.e. removing barriers to free trade. In particular, the three pillars that hinder trade which are the subject of the trade negotiations: (a) market access, (b) domestic support through government providing subsidies to its own farmers to make them productive, competitive and ensure them income, and (c) export competition which is a form of government assistance in the form of money or resources given to the export sector to make their product competitive.
He then outlined the mandate of the Doha Development Round—to have substantial improvement in market access, increased exports and imports of agricultural products; to substantially reduce the support of government (domestic subsidies); and to substantially reduce towards eliminating export support (export competition). After Doha, these modalities have to be transformed into formulas that can provide flexibility, etc. to developing countries. It was supposed to be discussed and finalized in Cancun in 2003 but the talks were stalled. However, in
Hong Kong, they came up with key ministerial decisions:
• elimination of all forms of export subsidies in 2013
• reduction in trade distorting domestic support through a 3-band formula with higher cuts in higher bands
• retention of 10% de minimis or subsidies to developing countries (e.g. PhP 800 billion pesos total agricultural value, 10% of that is the maximum subsidies)
• substantial improvement in market access through a 4-band formula
• self designation of special products (SPs) guided by indicators of food and livelihood security and rural development
• recourse to price and volume-based triggers Special Safeguard Measures (SSM)
However, a year ago, the negotiations were suspended. It was a fight among 3 member countries—EU, US and G33 (Group of 33), in view of the US reluctance to reform its domestic agricultural policy while pushing for an ambitious commitment on agriculture, i.e. reduced import tariffs as low as possible. G33, which is a grouping of developing countries that proposed SP/SSM, opposed the US proposal. Jerome mentioned that the Philippines is a member of G33 and that the group of developing nations is on the defensive side—not opening domestic markets to protect its farmers. The EU is also on the defensive and will not accept the US’ ambitious market access without changes in its domestic agricultural policy.
With this scenario, he talked about Pascal Lamy’s, the WTO director general, response—
“all the way”, i.e. the multilateral process hibernated but he used various approaches to ensure that there will be new opportunities to reopen the negotiations and accommodate each other’s positions. For example, from July to December, Lamy had bilateral and multilateral talks with countries and blocs such as APEC, ASEAN, EU, US to come up with an acceptable solution. Last March, Lamy was present at the G33 meeting in Jakarta.
He then tackled the “soft re-start” of the talks in January 2007 during the Davos Ministerial when all members acknowledge that there was a need to sit down and talk again. The countries recognized the costs of failure/collapse were too high. And the intensive bilateral talks among the majors (EU-US) had added momentum, and that there is a possible ‘landing zone’ or common ground for a breakthrough in the negotiations.
Jerome outlined the current positions/state of play of the major players in the WTO talks:
a. The US is posturing now.
While not abandoning ambitious market access interests, the US seems to recognize that a better offer had to be forwarded in agriculture. And while not yet ready to discuss global numbers, the US has shown openness in discussing disciplines on domestic support. But the US seeks specific commitments on products of export interest to them. Bush is also seeking the extension of the Trade Promotion Authority (TPA) with a boost from a breakthrough in the WTO negotiations that would convince US Congress that there is enough package for them. The TPA has to be extended to give mandate to the negotiator, if not, he will not be respected by any negotiators on the table. The US Farm Bill is also underway, which has a bearing on the negotiations or at least affects how the US trade rep negotiates. But US farmers are happy with the 2002 Farm Bill that provides huge subsidies
b. The EU is waiting.
The EU is in a hurry to conclude the negotiations before the Portuguese Presidency starts in July because he is more defensive and protective of agriculture than the outgoing German president. But the EU will only move if the “triangle of issues” (agriculture market access, domestic support and Non-agriculture Market Access [NAMA]) are addressed. The EU agreed to eliminate export subsidies in the Hong Kong ministerial. And on market access, they are now willing to reach near the G20 proposal of 54 percent average cut. However, such offer is dependent on the US’ offer on domestic support and results in NAMA.
c. Developing countries are puzzled.
Exporting countries are willing to clinch a breakthrough but are cautiously engaging, meaning they doubt the US’ ability to table an acceptable offer sans clear signals on the TPA extension.
In other words, they are using this trade policy authority function to extend their leverage in the negotiations. On the other hand, the EU urges its members to help the US government in obtaining the TPA extension by suggesting that developing countries should find ways to give at least nominal market access with respect to Special Products. The Special Products are highly contentious issues: particularly the US claims that these special products would inhibit the increase of trade; the EU, however, is asking for a softer stand on special products, i.e. do not stop trade but give the EU a window to enter developing countries’ markets, more than what they have now. Some developing countries think it is better to clinch a breakthrough with the US before the expiration of its TPA and before any new US Farm Bill adjusts to the results of the negotiations (i.e. dangerous to clinch a deal without TPA extended). But other developing countries are reluctant to give into the US’ demand to drastically reduce tariff.
After this, Jerome proceeded with a discussion on the ‘landing zones’ or common grounds for a possible breakthrough of the talks, mainly on domestic support and market access:
• On Domestic Support: (a) possible acceptance of a USD 15 billion cap for US’ overall level of trade distorting support (still above the USD 12 billion demanded by G20); (b) G20 insists reductions must also be accompanied by effective disciplines on the nature of such support programs to prevent box shifting (i.e. red to be disguised as green subsidies, for e.g. direct export subsidies disguised as food aid); (c) US trading partner also insist on product-specific caps, which is a deal-breaker for many exporters.
• On Market Access: (a) regular tariff reduction formula: Close to variant of G20’s 54 percent overall average cut for developed countries; and 2/3 proportionality cut for developing countries; (b) sensitive products— a flexibility demanded by the developed countries, i.e. mechanism in which you can elect a product but you have to compensate though minimum access volume/quota: around 4-6 percent of tariff lines; to be allowed 30 percent deviation for the regular cut and 50-60 percent deviation for more sensitive; to be compensated by TRQ/ MAV; and (c) special products— a flexibility demanded by developing countries: positions widely divergent from 5 tariff lines (US) to 20 percent of tariff lines (G33).
Further, Jerome spent some time tackling the Special Products issue including the controversies surrounding it and the divergence of positions among and between developing and developed countries. One is on the possibility of linking SP coverage with those of Sensitive Products of the developed, with the application of 2/3 proportionality rule for developing countries. Second, the G33 insists on ‘self designation’ guided by indicators of food security, rural development needs as mandated in the Hong Kong ministerial. Third, exporters, particularly the US, want to know beforehand which products are to be designated as SP even before an agreement on indicators is reached. Fourth, other countries could agree to indicators as guide to designation of SPs but insist on stringent indicators and ensure that heavily traded goods would be covered. Fifth, the positions on how to treat SPs differ depending on who does the talking. According to Jerome, the G33 insists that SP should be exempted from tariff cuts while exporters particularly the US demands otherwise (but earlier the G33 softened its stance, indicated that it could accept the 5-10 percent cut on some of SP). The US, on the one hand, has flagged the application of TRQ (minimum access commitments) albeit more flexible than those sensitives of the developed countries. And the EU, on the other, has referred to possible nominal market access for SP. Finally, on the issue of SPs, Jerome outlined the ensuing battle (table):
PROPONENT
NUMBER /COVERAGE INDICATORS
TREATMENT
G33
At least 20% of tariff line
Illustrative positive indicators
50% of SP = 0 cut
25% of SP = 5% cut
25% of SP = 10% cut
Thailand
Malaysia
No mention
Negative Indicators
50% DC exports (developing countries)
50% imports from DC
Positive indicators
• Minimum tariff cut
• TRQ expansion for some;
• Tariff cap;
• Transitional
US
5 tariff lines
• Produced domestically or substitutes
• Not a net imported product
• Not a net exported product • Minimum tariff cut
• All subject to TRQ;
• 0 in-quota duty
Jerome then briefly discussed the WTO Committee on Agriculture Chair’s ‘challenge’ paper that was issued on April 30, 2007. It was relevant according to him as it contains a discussion on the SPs coverage, indicator and treatment. The chair is leaning towards the position of the exporters and is trying to dilute the position of the G33. The coverage discounts the acceptability of G33’s “at least 20 percent” tariff line coverage and the “center of gravity” is linking SP with Sensitive Products through direct application of the 2/3 proportionality principle for developing countries (e.g. 5-8 percent Sensitives : 8-13% SP). The paper specifies that indicators must be based on empirical observation and reasonably capable of verification. And finally on the treatment, the ‘more flexible treatment’ for SP does not mean “exemption from tariff cuts”.
Before ending his presentation, he devoted time to discuss the status of the Special Safeguard Mechanism (SSM). SSM aims to address imports surges and price declines. But he mentioned that the talks are on this topic are barely moving. On the coverage, the negotiators have not yet discussed if all SSG products are entitled to SSM, and corollary to this, would all agricultural products be entitled to SSM. Exporters are vocal in demanding that SPs should not have recourse to SSM. On the treatment of SSM, the discussion should zero in on whether the current SSG should be retained, how to operationalize quantity-based SSM and price-based SSM. Exporting countries, particularly the US demand that SSM can only be invoked unless both the price and volume-based triggers are breached (causality between increased import volumes and price declines). He explained that this causality is difficult to compute, especially for volume-based imports. He gave the example of ASEAN FTA, in which the tariff is lower than the WTO tariff. The issue is how to compute on the volume of imports and additional duties caused by ASEAN FTA or the WTO. The COA Chair issued another ‘Challenge’ paper last May 25 2007, this time focusing on SSM. He believes that “Special” (in Special Products) does not mean ‘unconstrained entitlements’ in the use of SSM measure. And that normal trade should not to be disrupted while genuinely responding flexibly to ‘special’ situations.
Finally, Jerome left the participants with a couple scenarios to expect on the WTO talks—new targets or more delays. One is that the negotiations will end in 2007 as there is some intensification of technical deliberations in Geneva since April 2007. By the end of July, negotiators will clinch a “breakthrough” and final agreement for all areas by fist semester of 2008. However, he gave some warnings that these scenarios are still speculative and that all must be ready for anything.
Update on the ASEAN Charter
Jason Anasarias, Assistant Director, Office of ASEAN Affairs, Department of Foreign Affairs
Assistant Director Jason Anasarias provided an overview of ASEAN Charter— its history, purpose, mechanisms for engagement by civil society groups, its sectoral bodies, and vision for the region’s agriculture sector, a comparison between EU and ASEAN, with a focus on the two bloc’s agricultural policies, and updates on the current status of the Charter .
Background. In 2003, the Bali Concord II created the three pillars of the “ASEAN Community”, i.e. socio-cultural, economic and security. The treatise targeted 2020 for the establishment of an ASEAN Community. In 2004, the Vientiane Action Plan (VAP) identified the formulation of an ASEAN Charter as a program area to help shape ASEAN norms. A year later, an Eminent Persons Group was formed to craft the first ever ASEAN Charter. This year, the High Level Task Force (HLTF) is created to draft the ASEAN Charter, with the aim to accelerate the establishment of ASEAN community to 2015.
The ASEAN Charter was envisioned to be bold, visionary, simple but direct, short but comprehensive, and people-oriented. It will develop the protocols, guidelines and procedures that will guide ASEAN as a regional bloc as well as develop its regional identity, cohesiveness, solidarity and harmony. It will likewise promote the three pillars of ASEAN cooperation. He also mentioned that the Charter is a landmark document that should stand the test of time.
Developments in drafting the ASEAN Charter. The Philippines is the outgoing chair this July 2007 and will hand it to Singapore. During the Philippine’s chairmanship, the HLTF mandated to come up with a Charter draft, met six times and conducted consultations with ASEAN parliamentarians and civil society groups/organizations (CSOs) in Manila last March 2006. It also met with officials of ASEAN’s economic and socio-cultural communities The HLTF has identified 12 chapters to serve as framework which include purposes and principles, legal personality, membership, organs, immunities and privileges, decision making, settlement of disputes, budget and finance, administration and procedures, identity and symbols, external relations, and general and final provisions. In terms of time frame/schedule this year, the HTLF will seek the advise of ASEAN Foreign Ministers on the preliminary draft in July 2007 and the approval of the Charter by Leaders in November 2007.
Role of CSOs. CSO’s engagement with ASEAN calls for sustainable development (e.g. preservation of member countries’ natural resources; responsible mining); social progress (MDG; right to development; caring and sharing community); equitable economic development (e.g. fair regional integration characterized by social responsibility of enterprises, respect for the rights of both formal and informal workers, social protection of the disadvantaged; and economic integration process that is inclusive and participatory); protection and promotion of human rights (i.e. creation of human rights commission; civil society to monitor compliance of members states with human rights standards); people-centered ASEAN, i.e. consultative processes based on participation by various stakeholders; peaceful settlement of disputes (rules based arbitration and dispute settlement system; conflict prevention and conflict resolution); unity in diversity or respect for each other’s culture, religion, ethnicity; and narrowing the development gap (e.g. capacity building; creation of social fund)
For the Department of Foreign Affairs, CSOs roles are in engagement with HLTF members, development of linkages with like-minded CSOs in the region, engagement with ASEAN sectoral bodies in policy/program/project formulation, assistance in the promotion of ASEAN awareness, continued advocacy on the attainment of the millennium development goals (MDGs), and advocacy in five levels of cooperation such as confidence building (exploring common interests), harmonization (achieve compatible national approaches by member countries), special assistance (capacity building), joint efforts (developing regional approaches and regional institutions), and regional integration (regional institutions acting in unison to further the ASEAN cause of community building).
However, out of the projects of ASEAN, only 80 percent are at first stage level, i.e. confidence building. There is the problem of budget and disconnect between the leader’s rhetoric and actual practice.
ASEAN Sectoral Bodies. Asst. Director Anasarias proceeded with explaining the different sectoral bodies of ASEAN.
Comparing EU and ASEAN. First, the EU considers itself as a supra-national body while ASEAN is an intergovernmental organization. Second, the EU has legislative framework with a functioning European Parliament while ASEAN has none. Third, the EU is a rules-based organisation with binding treaties and laws. ASEAN still is in the process of crafting its Charter and derives decisions based on consensus-making. And finally, transfer of sovereignty and an empowered European Commission exist in the EU while the ASEAN Secretariat has no political power or strength. Institutions in the EU are solid and strong while in comparison, the ASEAN Secretariat needs to be strengthened. (see the table below)
EU ASEAN
• Supra-national body
• Clear legislative framework
• Creation of solid institutions
• Legal treaties and transfer of sovereignty
• Formal criteria for membership • Inter-governmental organisation with no legislative framework
• Cooperation based on consensus
• No legal charter and no transfer of sovereignty
• No membership criteria aside from geographic location
Asst. Dir. Anasarias also compared EU’s Common Agricultural Policy (CAP) with ASEAN’s Agricultural Policies. CAP began operating in 1962. France insisted on a system of agricultural subsidies as the trade off for agreeing to free trade in industrial goods. CAP is a system of EU’s agricultural subsidies and programmes for its member countries. Representing 44 percent of EU budget (EUR 55B) for 2007, CAP aims to increase productivity, ensure fair living standards for the agricultural community, stabilize markets, ensure availability of food, and provide food at reasonable prices in the European Union (Treaty of Rome, Article 39).
ASEAN’s agricultural policies, on the other hand, promote full economic integration of agro-based products, wood-based products and fisheries sector by 2010, harmonization of food safety, produce quality and standardization of trade certification as top priority, and ASEAN cooperation in food, agriculture and forestry that is guided by the ASEAN Ministers on Agriculture and Forestry (AMAF) and supported by the Senior Officials Meeting (SOM). The overall objective of ASEAN cooperation is to enhance the international competitiveness of ASEAN’s food, agriculture and forestry products and strengthen the food security arrangement in the region. Below are ASEAN’s programs on agriculture:
? ASEAN General Guidelines on the Preparation and Handling of Halal Food
? ASEAN Network on Plant Health Cooperation Network
? ASEAN Endemic Pest List and harmonization of Maximum Residue Limits (MRLs) of pesticides
? Animal Health and Production Information System for ASEAN (AHPISA)
? Mechanism on the Establishment of an ASEAN Animal Health Trust Fund
? ASEAN Network of Fisheries Post-Harvest Technology Centre
? ASEAN Farmers Week
? Memorandum of Understanding (MOU) on ASEAN Cooperation in Agriculture and Forest Products Promotion Scheme (2004-2009)
He mentioned that the work on the draft registration and compilation of Halal food additives used in manufacturing food in ASEAN member countries and Halal accreditation for establishments are in progress. ASEAN also intends to harmonize and coordinate regional capacity-building in plant health. And the regional bloc adopted another 86 Harmonized MRLs for 8 pesticides which add to the existing 369 MRLs already endorsed by previous AMAF Meetings for 28 pesticides.
Programs with Dialogue Partners on Agriculture. ASEAN has 7 major dialogue partners on agriculture. Joint projects and programs range from human resources development, investment, science and technology, health and agricultural cooperation. Here is a summary of the on-going programs and projects between ASEAN and its dialogue partners:
Countries Projects/Programs
Australia Program Stream under the ASEAN-Australia Development Cooperation Program:
? Program activities fall into 9 areas: Skills, e-Commerce, Fruit and Vegetables, Seafood Safety, Standards, Customs, Animal Health, Plant Health and Food Safety.
? The status as of December 2005:
Completed: 18 Projects
On-going: 29 Projects
Canada ? ASEAN Institute of Forest Management, Phase I and II;
? ASEAN Forest Tree Seed Centre and ASEAN-Canada Fisheries Post Harvest Technology Project, Phase I and II;
? Canada and Singapore trained 52 participants from ASEAN together with China in bio-safety and bio-containment as part of regional strategy to respond to outbreaks of emerging diseases.
Japan
There are about 36 development cooperation projects (funded under the Special Cooperation Fund and Future Oriented Cooperation Projects Fund) that includes: human resources development, investment, science & technology, health and agricultural cooperation.
New Zealand
? Sanitary and Phytosanitary (SPS) Capacity Building Program for ASEAN (A$ 4 million, three year capacity building program);
? South East Asia Program to Combat Foot and Mouth Disease (A$ 70,000 contribution to combat Foot and Mouth Disease);
? Food Safety/Standards Project- development of food safety/quality standards for SMEs in CLMV (USD850, 000 over the next 3 years)
US
? Strengthening ASEAN Trade and Customs Controls for Endangered Species;
? USD 9 million funding assistance for ASEAN under the ASEAN-US Cooperation Plan since 1994;
? Advance the work of the ASEAN Working Group on Environmentally Sustainable Cities under the ACP.
China
MOU between the Ministry of agriculture of the PROC and ASEAN Secretariat on Agricultural Cooperation (November 2, 2002.
EU
ASEAN Center for Biodiversity (located in UP Los Baños) formerly the ASEAN Regional Centre for Biodiversity Conservation (ARCBC)
Vientiane Action Plan’s (VAP) Provisions on Agriculture. Asst. Dir. Anasarias, then, outlined VAP’s provisions on agriculture which include a four-fold strategy to achieve international competitiveness of ASEAN’s food, agriculture and forestry products and strengthen the food security arrangement in the region.
First is to develop and existing and new technologies. This includes conducting collaborative research to develop new/improved technologies in food, agriculture and forestry production, post-harvest and processing activities and sharing of research results and available technology, conducting research and development (R&D) in critical areas to reduce the cost of inputs for food, agriculture and forestry production, and strengthening programmes in food, agriculture and agro-forestry technology transfer, training and extension to increase productivity.
Second is to enhance the marketability of ASEAN food, agriculture and forestry products/commodities through the development, harmonization and adoption of quality standards and regulations for food, agriculture and forestry products, and promotion of trade, investment and services incidental to agriculture and forestry to increase trade in agro-based and wood-based products in ASEAN and ASEAN Trade in these products with the rest of the world.
Third is to enhance private sector involvement through networking and strategic alliances with the private sector to promote investment and joint venture opportunities in ASEAN.
Finally, to enhance ASEAN cooperation and joint approaches in international and regional issues. This means strengthening ASEAN’s cooperation and joint approaches in addressing issues and problems affecting trade in the region’s food, agriculture and forestry products including environment and labour issues, and closer cooperation and negotiates, through relevant ASEAN bodies, with trading partners on market access for ASEAN products.
The speaker also shared the ASEAN Blueprint for Food, Agriculture and Forestry
In his closing, Asst. Dir. Anasarias reiterated three main points from his presentation. One, that the ASEAN Charter is one of the means to achieve the building of an ASEAN Community. Two, that ASEAN is an inter-governmental organisation and not supra national body unlike the European Union. And finally, CSOs engagement with ASEAN’s sectoral bodies should be sustained and continued.
Update on the EU-ASEAN FTA
Frances TC. Lo, 11.11.11
Frances TC. Lo started with a discussion of the EU’s aggressiveness in pursuing bilateral agreements with the regional blocs. ASEAN is not spared. Asia is again targeted as an emerging regional trading partner. And with China being seen as a threat, they want to ensure that they will carve out a space in the region. Her presentation zeroed in on the status of the EU-ASEAN FTA as there are no text yet, what is happening and where to intervene.
Trade outside the WTO is happening. She stated that the talks at the WTO are stalled, and not moving as fast or as quickly as the developed countries wanted. So developed countries like the EU are pursuing free trade arrangements with regional blocs and other Asian countries such as India and Korea. The EU also wants to fast-track agreements of WTO plus deals, i.e. those agreements, which could not pass the WTO negotiations (e.g. new issues). Asia is the third biggest trading partner of the EU and they want to establish their presence in the region (as the US already is very much present in Asia).
She then proceeded with discussing the two impact studies commissioned by EU Trade Commissioner Peter Mandelson. The European Commission instructed to conduct sustainability impact assessments of free trade agreements and two studies have come out: quantitative and qualitative studies of the possible impact of EU-ASEAN FTA. The quantitative study is a technical study of the sectors which are most vulnerable and strongest for the EU to exploit and vice versa (i.e. EU’s sectors for ASEAN). What came out of that study according to Frances is that the EU wants to enter the services sector of ASEAN and wants full liberalization of this sector. ASEAN will lose on its wood, car, textile and garments industry. ASEAN will be “forced” to focus on agriculture and fisheries at the expense of industry. The EU will enter through their companies via tourism, FDI, etc. The study states that the EU’s entry in the services sector can increase employment in ASEAN. However, this does not hold true for the agriculture sector as there is surplus labor in the ASEAN countries.
The ASEAN Charter seems to be the guiding framework that member countries want to use in negotiating with the EU. Meaning, ASEAN wants to negotiate as a bloc of 10 member countries sitting as one but there is no agreement yet on how this will be done. The EU, for instance, is not dealing with Burma as long as the military junta is there. Then there is the least developed countries in the Mekong region. ASEAN wants to expedite regional integration process to fully negotiate with trading blocs. And the deadline in concluding the EU-ASEAN FTA has been moved to 2010. But in the impact studies, there is no mention how risks will be mitigated. According to Frances, looking at how the EU has entered FTAs with other countries like Africa, Mexico, ACP/Carribean, it will most likely mimic the Mexican FTA, i.e. same standing as equal partners unlike the ACP which was given flexibility to adjust. This is problematic as ASEAN countries are in different levels of development.
The last part of her presentation focused on where the negotiations stand. The negotiation was formally launched on May 4, 2007 during the ASEAN Economic Ministers Meeting in Brunei and
Vietnam was assigned to come up with a “negotiations architecture”. This July, the technical working groups would be formed. And in September, the modalities will be discussed. In November of this year, there should be an approval of agreements. Vietnam is proposing to fast track the negotiations in two-years time. According to Frances, this is an ambitious goal since the ASEAN is not sure how to negotiate as one bloc. She alluded to the Mercosur, ACP and Mexican FTA that took about 10 years of negotiations. As of the moment, there are 5 countries that signified their interest to negotiate with the EU, namely the Philippines, Indonesia, Vietnam, Thailand, and Malaysia. She ended her update with stating that the EU might enter into bilateral agreements despite having an FTA with the regional bloc (similar to Japan-ASEAN FTA but Japan has an FTA/EPA with Thailand, Malaysia and the Philippines).
There was a 15-minute break before the open forum.
Open Forum
On the likelihood of a WTO Ministerial Conference this year, transparency of the ASEAN Charter and EU-ASEAN FTA, and managing the tension of ASEAN negotiating as a bloc despite having no charter
Ted Jacinto of the Tambuyog Development Center asked the following questions:
(Addressed to Jerome) What is the likelihood that the ministerial conference like that in Hong Kong will occur this 2007? Based on the state of play, and when points of agreements are arrived at, the resolutions would have to be ratified in a ministerial conference.
(To Frances and Jason): How is the process of drafting the ASEAN Charter and the EU-ASEAN FTA going, in terms of transparency, especially if we do not have access to these documents?
(To all the resource persons): I notice something that in the presentation of the EU-ASEAN FTA, ASEAN wants to negotiate as a single political entity. This is a logical option so it can have more leverage if ASEAN is considered as equal partners by the EU. This contrasts to the presentation of Jason, which compares that the EU is rules-based and that the ASEAN right now is not. How can this tension be managed? If ASEAN could not manage this, they would likely be at the losing end.
Jerome: The likelihood of a WTO ministerial depends on the technical negotiations. There is already some information floating that there might be some ministerial conference in Geneva this July to clinch a breakthrough on market access and domestic support. What compounds the scenario/ adding difficulty is how to crop up with indicators on identifying SPs. Based on a recent discussion, even the G33 is having difficulties on determining the right indicators on what are the right products. There is no convergence on these issues and it is not an easy job to just wait what will happen re: SPs within this month. But negotiations are like this, for example, the Uruguay Round lasted 10 years instead of 6 years. There are some instances that are similar to what we experiencing now, i.e. clinching breakthrough. Negotiations are getting mired in details– how to quantify the threshold. Politics also play an important role: if the technical people would not reach an agreement, the battle will be shifted to the capital of the developed and developing countries, beyond the trade secretaries. And it depends on whether they will agree on anything before end June when the Trade Promotion Authority of the US expires. It would take time to agree on a lot of things. What I am expecting now is that the real colors of G33 members will be revealed, i.e. will all the members fight for the SSM and SP through and through as each country knows their bottom lines. The question is would G33 break up or bind together.
To answer the question, there would probably be a ministerial conference in July to clinch the breakthrough in market access and domestic support. If they reach this, the modalities agreement would end this year. But the process of verification and operationalization would take at least 6 more months– first semester of 2008. But I personally doubt this.
Jason: On transparency, the first level of consultation with CSOs is inclusive and open (regional and national consultation on the Charter). However, the drafting of the Charter is very secretive (usual process/rotten part of ASEAN—confidentiality). We’re not sure if the first draft will be circulated to the public and this depends greatly on the governments, i.e. if there is high demand and pressure to be more transparent, then the ASEAN governments might circulate it. There was also no agreement to convene a CSO consultation and it is difficult to convince the members. But the Philippine initiative is to push for a consultation if ASEAN wants to be people-centered.
Frances: If we go by the process of how the ASEAN Charter is being drafted, we’re not sure whether the tension will be resolved. Nobody knows really. EU can’t pass a resolution without consulting its civil society, business sector, and government. And this is the route they took when they negotiated with ASEAN. We’re waiting for the EU Commission’s mandate/document which will guide EU’s negotiation. On the negotiation part, it depends on how Burma will move and respond so it would not be sidetracked. A soft proposal came from the ASEAN secretariat—to accommodate Burma and the LDCs but to make Burma not to sign the agreement or that it opted not to sign. This makes “ASEAN minus Burma” still consensus-based and sticking to the ASEAN way, i.e. Burma is a deal breaker. But looking at the expressed statement and body language, Burma is excited to negotiate with the EU.
On the transparency question, it appears that it depends on the national governments. The national government’s position is not to be divulged because it will hamper the Philippine government’s position and they will only discuss on a need to know basis. Even the Bureau of Trade and Industrial Relations Promotion does not know the entire negotiating position of the Philippine government. As practiced, the negotiations will be delegated to different agencies- NEDA on services, DA on agriculture (like in the WTO), etc. Different agencies will lobby for their sectors. That means getting allies from all the agencies to disclose information.
On the lack of statistics on agriculture, what interests the negotiators are upholding, and what economic benefits the small farmers can reap from the WTO agreements
In-woo of FFTC asked Jerome the following questions:
• Why is there no national statistics on agriculture?
• In the negotiations process, whose interests are they protecting?
• What economic benefits would the farmers have? If they have no farmland, they do not have any private interest in this. How does government persuade or include the farmers’ organizations to be included in the process?
Jerome: On agriculture statistics, we have the Bureau of Agriculture Statistics and we regularly publish statistics but not the same level of sophistication as the developed countries. We, however, have no statistics on the number of farmers, and on what crops they are planting. The published statistics are aggregates. Being a technical person, it is difficult to measure how many farmers will be impacted by the negotiations. Agriculture is a very dynamic and complex sector. That’s why the developed countries provide a lot of subsidies. In short, you are right, we don’t have very detailed statistics that we have published and that needs to be addressed.
The Department of Agriculture considers the interests of landless farmers, seasonal workers and small farmers in the positioning of government in the negotiations. For example, the Task Force on the WTO Agreement on Agriculture (TFWAAR) is a private-led consultative body with NGOs as members. They are also engaged in doing technical work and not only consultation with the sector. Each member organization has the responsibility to disseminate the information to their members down at the municipal level. Part of our policy is to also conduct regional consultations to get the farmers’ positions.
On the ASEAN Charter and access to information
Marlene/AsiaDHRRA: We commend the positive stance that the Philippine team had taken, headed by Fidel V. Ramos. This encouraged CSO participation and inspired Vietnam and Indonesia to look more outward and recognize the inputs of CSOs. With Amb. Manalo chairing the HLTF, we were able to partake in the consultation on the draft. While we are thankful of the regional consultation, we are concerned about how we can access the running draft, especially with the level of secrecy in the drafting process. The CSOs have been proactively engaging the process even without funds and it is a bit disappointing to hear, despite the many calls and demands for access to information during the March dialogue in Jakarta, what Jason has stated about the drafting process. Ong Keng Yong responded positively to our request for access to information and participation in the consultation. Our demand is, at least for the NGOs who were part of the process, to get a copy of the draft. And one of the concrete proposals that came out of Jakarta dialogue last March is for CSOs to have a more permanent mechanism or consultative status with ASEAN. The secretariat is encouraging to push for its inclusion in the Charter.
Jason: Judging by what transpired in the process, FVR did not circulate the draft until the very end. The main reason for that is that all negotiations would have to be kept in the dark for the process not to be shot down.
Marlene: In the Nation, there was an article that explains what transpired in the meeting in Siem Reap: the drafting committee is rejecting the progressive provisions, which seems to be absent in the draft. If that is an indication of what the draft would look like in July, we hope that the progressive bloc can still have an input.
Jason: I can neither confirm nor deny the news report. With regards to the negotiations, the Philippines is pushing for the inclusion of human rights. But we’re being pragmatic in the approach; the text has to be acceptable to all (quid pro quo). And I don’t know which provisions have been deleted and included.
On the state of play of G33 and on Vietnam’s role in drafting the negotiating architecture of the EU-ASEAN FTA
Jeck, RWAN: I would like to ask Jerome about the state of play of the G33 countries. RWAN is a member of the G33 CSOs. It is of special interest to us. We’re sorting out a counter buffer to the G33. The pressure points for NGOs are to help each other out so that food security and right to livelihood can be ensured. The tariffs are already low and in the Philippines, what is important for the farmers are the SSM and SP, how would you include them when import floods, would you include ASEAN countries?
(To Frances): Vietnam is assigned to draft the negotiating architecture, why? Does it want to maximize its newly acceded membership to the WTO?
Jerome: I do not know the state of play of G33. I could somehow speculate on the basis of what happened in the G33 meeting in Indonesia: Pakistan is to watch out for as it has a different approach on what SP ought to be and it is a major exporter in South Asia. During the G33 meeting in Indonesia, Pakistan espoused a different perspective—the product that is exported should not be identified as SPs. With the current negotiations, it seems that there are more moves to lessen the indicators for more flexibility. And ultimately exporters would not want to elect a product as SP; it would be self-designated. It appears that there are real difficulties on real verifiable data for every indicator. Then there is politics at play. The dynamics is that the national interest of the Philippines is not dependent on India but what would happen if India turns around with its positions as a hardliner? To me, the important thing is to safeguard our national interest—bottom line of the Philippines – and advance our national interests.
On SSM and SP, in terms of priorities, SSM is not taken up because so many issues are on the table. SSM according to the COA Chair is restrictive and would bog down other issues when tabled. With SSM as a mechanism to arrest import surges and artificial price deflation, US and exporting countries do not want this tabled and this is being advanced by the COA Chair. What is important now is that the negotiations are back in Geneva— more transparent though there are still green room negotiations on SSM/SP. Fortunately, Korea and Indonesia are part of it.
Jason: We don’t really know why Vietnam is drafting the negotiations architecture. Probably, Vietnam volunteered and it was given the responsibility to do that.
On the process of consultation re: ASEAN Charter
Yvoan/VNFU: Glad that ASEAN is drafting a charter and very interested to be part of it. What is the consultation mechanism/process of drafting the ASEAN charter?
Jason: It depends on who’s sitting in the HLTF and the civil society in that country. In the Philippines, we have a vibrant and dynamic civil society but this is not the cause with others. Vietnam, for instance, put this consultation in a roadmap—1 or 2 consultations with civil society. The roadmap already included one consultation with CSOs and regional bodies handling the 3 pillars. No consensus yet on whether this will be continued in November as this will have to be agreed by the HLTF. My suggestion is to be more proactive in your advocacy and have an open line with the HLTF member in your country.
On the status of Japan FTAs with ASEAN countries
Sambito/API: Japan has a plan to open an FTA zone with six countries—Philippines, Indonesia, Thailand, Malaysia, etc. What’s the status of these agreements?
Frances: On the Japan-Philippine Economic Partnership Agreements (JPEPA), the current state is that it still up in the air, i.e. JPEPA has not been ratified in the Senate (Philippine process). The controversial provision that is found in JPEPA is the importation of the toxic waste, which is the subject of advocacy of the CSOs contributing to the delay of the signing in the Senate. Malaysia and Thailand are signed and there are side agreements on what products would be traded.
On ASEAN Farmers’ Week
Marlene/AsiaDHRRA: A direct comment on Jason’s presentation on the ASEAN Farmer’s Week. AFA would like to have a more meaningful celebration of the week. Ong Keng Yong is not happy about how it is celebrated as a gala night during the AMAF meeting. AsiaDHRRA and AFA are working on a proposal to have a more symbolic celebration by creating a platform for consultation and concrete cooperation with farmers in the region. On the issue of agrarian reform, we brought this to the secretariat two years ago. ASEAN can respond to it but in an indirect manner as it is a threatening/political issue. Who from the national agencies/DFA can AFA talk to re: this issue?
Jason: The proposal on AFW would be a welcome. We would support this and be coursed through the sectoral body. Agrarian reform is a national sovereignty issue, which would be on a low priority. Unless the ASEAN countries would surrender some national role re: this issue, then it can only issue motherhood statements on agrarian reform.
Synthesis
Esther provided the synthesis of the forum-dialogue:
On the WTO talks:
• The Doha Development Round negotiations is being fast tracked and revived. And a July ministerial is probable.
• The US is bent on having a final modalities before the expiration of the Trade Promotions Authority in end June.
• SP and SSM are sailing on rough seas. The G33 is not sure if they would still remain as a bloc and it depends on the leadership of India and Indonesia.
• The US and EU are in an FTA mode: while the multilateral talks are stalled, the focus of FTAs are on market access and sidelining issues on subsidies.
ASEAN Charter:
• The ASEAN Charter is pushing to beat its original target dates: a draft in July in time for the ministers meeting and for the November ministerial in Singapore.
• The HLTF members are primarily doing the work and not committed to disseminating the draft texts– bent on keeping CSOs in the dark
• There is an on-going discussion about a roadmap which includes CSO consultations although no final decision has been made.
EU-ASEAN FTA
• The negotiation has been launched in May 2007 but there is still no text to comment on.
• Vietnam is the ‘negotiations architecture’
• Vietnam would like to fast track the negotiations to two-years: November 2007, approval of the agreements and in 2-years time, the substance and content of the FTA.
Esther also outlined some concrete action points presented by the panelists and participants:
WTO Talks:
• Vigilance and watchfulness on the developments of the talks especially with the possible July ministerial/text and whether it responds to our demands and protect the interests of small farmers
• Pressure the big players of G33, Indonesia and Philippines, not to turn around their positions
ASEAN Charter:
• The drafting phase is on-going until July 31 so there is still time to provide our phrases.
• Push for another regional/national consultation after the first draft is released.
• Urge HLTF members at the national level to conduct consultations like what Vietnam/VNFU will do. And share the contents of the draft with each other.
EU-ASEAN FTA:
• Push for transparency and participation of CSOs in the negotiations to release the text and conduct consultations. Be involved at the start of the process.
• Work with national and regional governments in conduct of studies to analyze the possible impacts of an EU-ASEAN FTA to small farmers in the region
• With Vietnam at the helm of the negotiations, VNFU can help disseminate the information about the developments on EU-ASEAN FTA.
Finally, Esther stressed that with this kind of negotiations, transparency, participation and representation are key demands of CSOs and the small farmers.
Closing
Sambito/API thanked the resource persons for their time and inputs. AFA gave tokens of appreciation to the speakers (Jerome Bunyi- gift from VNFU; Jason: from SorKorPor; and Frances: FNN).
The form-dialogue was followed by a night of solidarity and celebration of Asian farmers’ culture and tradition. The participants and speakers were all invited to partake in this celebration.
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