Study: tariff reductions in the Doha Round will erode border protection for EU agricultural products
Agriculture is at the centre of the multilateral round of trade negotiations under the World Trade Organization (WTO), the so-called 'Doha Round'. The Global South wants both the United States and the European Union to decrease farm subsidies and abandon tariffs for agricultural products. The developing countries stand united in the G-20, but are confronted with an ongoing dispute between the EU and the US, which holds back progress (earlier post). Market access compared to export competition and domestic support is the most difficult of the three pillars to negotiate. The US is aggressively demanding for significant reductions in tariffs, but the EU is unable to do so because further tariff reductions will erode border protection for some of its important agricultural products.
MTT Agrifood Research Finland has completed an interesting study [*.pdf] to reveal the sensitive agricultural products in the EU due to further tariff reductions in the projected Doha Round. The EU agricultural products are examined by tariff lines at eight digit level. These products are butter, skim milk powder, beef meat, poultry meat, pig meat, white sugar, wheat, barley, and maize. The sensitivity of EU agricultural products to the fluctuation of exchange rates from USD 0.90 per Euro to USD 1.50 per Euro is analysed in conjunction with the different tariff reduction formulas according to the EU proposal, WTO draft proposal, and US proposal for tariff-cuts.
Out of the many proposals submitted to the WTO for the tariff reduction formula, the US proposal is the most extreme and the EU proposal is the most lenient with the G-20 proposal and the WTO draft proposal being in the middle. Naturally, the projected results show that the EU proposal will generate a lower number of sensitive products compared to the WTO draft proposal, and the US proposal will generate the highest number of sensitive products:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: agriculture :: trade :: tariffs :: subsidies :: Doha :: WTO ::
The results reveal that poultry meat has the lowest border protection among the examined EU agricultural products, followed by butter. Poultry meat is sensitive to the tariff reduction formula under the WTO draft proposal in almost all the exchange rate scenarios, except when the Euro is very weak (USD 0.90 per Euro). Likewise, butter is sensitive to the tariff reduction formula under the US proposal in almost all the exchange rate scenarios with the exception of a very weak Euro – USD 0.90 per Euro.
On the other hand, EU cereals such as wheat, barley, and maize are the most resilient to the erosion of border protection due to further reduction in tariffs in the projected Doha Round, followed by skim milk powder in the EU dairy sector. Border protection for cereals remains intact even after implementing the tariff reduction formulas from all the three proposals. In addition, border protection for cereals is not affected by a variety of exchange rate scenarios.
As the second most resilient product, skim milk powder is only sensitive to the tariff reduction formula under the US proposal and when the Euro is very strong – USD 1.50 per Euro. The results also demonstrate that EU agricultural products are very sensitive to the fluctuations of exchange rate. There are no sensitive agricultural products under any of the tariff reduction proposals if the Euro is very weak – USD 0.90 per Euro. On the contrary, a very strong Euro (USD 1.50 per Euro) will create the highest number of sensitive products in the projected Doha Round.
WTO members are entitled to select and designate an appropriate number of sensitive products. Proposals have extended from as little as one percent to as much as fifteen percent of tariff lines. The WTO draft proposal estimated that the number of sensitive products may be between four to eight percent of all agricultural tariff lines. Therefore, the EU may be eligible to designate between 88 to 176 tariff lines as sensitive products. This study has analysed only nine tariff lines out of the 2200 tariff lines for EU agricultural products. The examined EU agricultural products may represent other tariff lines in the same product category, but potential sensitive products at eight digit level have to be analysed individually in order to choose the correct and exact number of sensitive products for the EU.
References:
Ellen Huan-Niemi, "Market access under the World Trade Organisation: Identifying sensitive products in the EU" [*.pdf], MTT Working Papers 146, 23 pages - October 2007
Biopact: Latest Doha talks collapse again, agriculture remains stumbling block - June 21, 2007
Article continues
MTT Agrifood Research Finland has completed an interesting study [*.pdf] to reveal the sensitive agricultural products in the EU due to further tariff reductions in the projected Doha Round. The EU agricultural products are examined by tariff lines at eight digit level. These products are butter, skim milk powder, beef meat, poultry meat, pig meat, white sugar, wheat, barley, and maize. The sensitivity of EU agricultural products to the fluctuation of exchange rates from USD 0.90 per Euro to USD 1.50 per Euro is analysed in conjunction with the different tariff reduction formulas according to the EU proposal, WTO draft proposal, and US proposal for tariff-cuts.
Out of the many proposals submitted to the WTO for the tariff reduction formula, the US proposal is the most extreme and the EU proposal is the most lenient with the G-20 proposal and the WTO draft proposal being in the middle. Naturally, the projected results show that the EU proposal will generate a lower number of sensitive products compared to the WTO draft proposal, and the US proposal will generate the highest number of sensitive products:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: agriculture :: trade :: tariffs :: subsidies :: Doha :: WTO ::
The results reveal that poultry meat has the lowest border protection among the examined EU agricultural products, followed by butter. Poultry meat is sensitive to the tariff reduction formula under the WTO draft proposal in almost all the exchange rate scenarios, except when the Euro is very weak (USD 0.90 per Euro). Likewise, butter is sensitive to the tariff reduction formula under the US proposal in almost all the exchange rate scenarios with the exception of a very weak Euro – USD 0.90 per Euro.
On the other hand, EU cereals such as wheat, barley, and maize are the most resilient to the erosion of border protection due to further reduction in tariffs in the projected Doha Round, followed by skim milk powder in the EU dairy sector. Border protection for cereals remains intact even after implementing the tariff reduction formulas from all the three proposals. In addition, border protection for cereals is not affected by a variety of exchange rate scenarios.
As the second most resilient product, skim milk powder is only sensitive to the tariff reduction formula under the US proposal and when the Euro is very strong – USD 1.50 per Euro. The results also demonstrate that EU agricultural products are very sensitive to the fluctuations of exchange rate. There are no sensitive agricultural products under any of the tariff reduction proposals if the Euro is very weak – USD 0.90 per Euro. On the contrary, a very strong Euro (USD 1.50 per Euro) will create the highest number of sensitive products in the projected Doha Round.
WTO members are entitled to select and designate an appropriate number of sensitive products. Proposals have extended from as little as one percent to as much as fifteen percent of tariff lines. The WTO draft proposal estimated that the number of sensitive products may be between four to eight percent of all agricultural tariff lines. Therefore, the EU may be eligible to designate between 88 to 176 tariff lines as sensitive products. This study has analysed only nine tariff lines out of the 2200 tariff lines for EU agricultural products. The examined EU agricultural products may represent other tariff lines in the same product category, but potential sensitive products at eight digit level have to be analysed individually in order to choose the correct and exact number of sensitive products for the EU.
References:
Ellen Huan-Niemi, "Market access under the World Trade Organisation: Identifying sensitive products in the EU" [*.pdf], MTT Working Papers 146, 23 pages - October 2007
Biopact: Latest Doha talks collapse again, agriculture remains stumbling block - June 21, 2007
Article continues
Thursday, October 04, 2007
Scientists propose artificial trees to scrub CO2 out of the atmosphere - but the real thing could be smarter
Amongst the first series the following ideas have been suggested: emulating the cooling effects of a large volcanic eruption by filling the atmosphere with sulphur particles (dismissal here), making clouds more reflective by pumping fine salty water particles into them, and building a giant space mirror by launching billions of thin glass plates into space to reflect sunlight away from Earth (which would be absurdly costly).
Carbon capture ideas include the proposal to 'fertilize' the oceans with iron to induce algae blooms that capture CO2 (critique here), and building 'synthetic trees' that suck CO2 out of the atmosphere with the gas consequently stored deep under ground (earlier post).
Artificial trees
The latter idea is now becoming a reality. Frank Zeman at Columbia University believes CO2 could be efficiently extracted from the atmosphere using a relatively simple chemical process involving pumping air from the atmosphere through a chamber containing sodium hydroxide, which reacts with the CO2 to form sodium carbonate. This carbon-containing solution is then mixed with lime to precipitate powdered calcium carbonate – a naturally occurring form of which is limestone. Finally, the 'limestone' is heated in a kiln releasing pure CO2 for storage.
The 'artificial tree' concept is discussed in an article in the current online edition of Environmental Science & Technology. Zeman calculates that one carbon atom would need to be expended as fuel – to pump air and heat the process – in order to capture four carbon atoms from air.
Zeman has no commercial plans for his idea, but Klaus Lackner, a former colleague at Columbia who originally developed the concept, has meanwhile set up a private company called Global Research Technologies to explore the possibilities of making money out of it.
Real trees and carbon-negative energy
According to Jon Gibbins, an expert on energy technology at Imperial College in the UK, Zeman and Lackner's idea faces two major problems: (1) it could provide a justification for continuing to burn fossil fuels, and (2) it does not present a clean energy system as it merely removes carbon dioxide from the atmosphere. There is however a concept that performs the same function as Zeman's idea but delivers renewable, ultra-clean carbon-negative energy at the same time, which allows us to move away from fossil fuels. This concept, known as 'Bio-energy with Carbon Storage' (BECS) is based on real trees designed to capture and store more carbon, and on advanced bioconversion concepts:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: carbon dioxide :: carbon capture and storage :: bio-energy with carbon storage :: geo-engineering ::
Gibbins believes it makes more sense to use carbonaceous fuels to generate electricity, capture the CO2 at the power plant, and use the resulting electricity to power cars and trains.
If the fuels in question are renewable biomass - real trees - the electricity produced becomes carbon-negative. Such BECS systems perform the same function as Zeman's idea, but are more efficient and allow us to make a transition towards carbon-negative electricity for transport, away from fossil fuels.
Zeman claims that his process does not use any more energy than decarbonising emissions straight from power plants. But Gibbins points out that much of Zeman's process is run on electricity, while carbon capture at (biomass) power plants relies on waste heat, making the system potentially more efficient.
The BECS concept offers the possibility to couple biomass production and trade to a global transition to carbon-negative electricity. Unlike other renewables like wind or solar - which are carbon-neutral and merely prevent emissions from occuring in the future - BECS systems take emissions from the past out of the atmosphere and can take us back to lower CO2 levels far more quickly.
Scientists who developed BECS concepts within the context of 'Abrupt Climate Change' (ACC) scenarios, project that the systems can reduce atmospheric CO2 levels rapidly, safely and without the need for alternative and risky geo-engineering interventions. If implemented on a global scale, BECS can bring atmospheric CO2 back to pre-industrial levels by mid-century (earlier post and especially here).
The prospects for BECS systems are looking good. Recently the UNFCCC announced it would include carbon storage into the Clean Development Mechanism (CDM), but only in developing countries where more than 50% of all electricity is generated by coal. Many of these countries have a large potential to produce sustainable biomass close to geosequestration sites. Its inclusion into the CDM means the BECS concept will be eligible for carbon credits which would make it more feasible.
Moreover, recent advances in plant biology have seen scientists designing fast-growing trees with enhanced carbon capturing capacities. A hybrid larch tree with 30% greater carbon sink capacity was developed (previous post), as well as an eucalyptus with 15% increased carbon capturing capacity (more here). Such trees would be used as primary carbon capture 'machines', then transformed into bioenergy (bio-electricity or biofuels) and the carbon captured and geosequestered.
Finally, a major advantage of BECS is that it can be implemented in a decentralised way, increasing its safety (one of the major risks with geosequestration is the potential for CO2 leakage). Geosequestration sites can be selected far away from inhabited regions; there, biomass would be grown and converted into the carbon-negative biofuel, which would then be shipped to power stations there where electricity is needed. If the biomass is converted by using synthetic fuel production methods (gasification coupled to Fischer-Tropsch synthesis), the carbon-negative fuels later used in cities would be ultra-clean and emit virtually no harmfull emissions. Recently a project in this sense was started, initiating the transition to BECS. It is based on producing synthetic fuels from a mixture of coal and biomass, with CO2 emissions sequestered (earlier post). When the coal is left out, a full BECS-system emerges that results in ultra-clean, carbon-negative fuels that can be used for transport, or for the production of electricity.
Image: rendering of a synthetic tree used by the BBC in a documentary about geo-engineering options, which included a discussion of Lackner's idea. Credit: BBC.
References:
Frank Zeman, "Energy and Material Balance of CO2 Capture from Ambient Air", Environmental Science & Technology, ASAP Article, September 26, 2007, doi:10.1021/es070874m
Biopact: Capturing carbon with "synthetic trees" or with the real thing?- February 20, 2007
Biopact: A closer look at the revolutionary coal+biomass-to-liquids with carbon storage project - September 13, 2007
Biopact: Carbon-negative energy gets boost as UNFCCC includes CCS in CDM mechanism - September 19, 2007
Biopact: Japanese scientists develop hybrid larch trees with 30% greater carbon sink capacity - October 03, 2007
Biopact: Scientists develop low-lignin eucalyptus trees that store more CO2, provide more cellulose for biofuels - September 17, 2007
Biopact: Simulation shows geoengineering is very risky - June 05, 2007
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posted by Biopact team at 6:41 PM 2 comments links to this post