WORLD TRADE ORGANISATION

The Doha Development Round

The Doha Development Round of the World Trade Organisation negotiations aims to lower trade barriers around the world, permitting free trade between countries of varying prosperity. EFMA supports a Round which will deliver an improved level playing field. This is especially important in terms of mutually beneficial market access; stronger trade defence instruments; and improved business operation conditions in major and emerging markets. 

 

WTO Accessions

As WTO membership involves a negotiated entry, the negotiation process can promote market economy reforms and faster acceleration into the liberal world economy.  Whenever this can be achieved, EFMA supports WTO membership.

 

Accession of the People’s Republic of China

The key issue for producer/exporters to China was market access for fertilizers.  For the EU industry exporting to China, NPK fertilizers was the most important negotiation issue.  This importance was reflected in the final EU-China bi-lateral deal.

 

Accession of the Russian Federation

The key issue is the non-market pricing of natural gas by the Russian monopoly supplier of gas according to government statute to local Russian manufacturing industry.  As between 40 to 80% of nitrogen fertilizer manufacturing cost is natural gas, this Russian state policy effectively provides a considerable financial support to local Russian nitrogen fertilizer manufacturers. 

In May 2004, the EU and Russia made a bi-lateral agreement within the context of the WTO Accession agreement.  By this agreement, the Russian government agreed to price gas to local manufacturing industry whereby account would be taken in the pricing of total costs, a “normal” profit and an account for future investments. This is commonly known as the “cost plus profit plus investment” deal.

At the start up of the negotiations and in the course of the negotiations, EFMA as an indivual organisation, and EFMA with its allies in industry sectors in Europe and in fertilizer associations in the OECD supplied a number of contributions including a reference position paper.

 

Other Accessions

Other accessions to the WTO could include Ukraine and Algeria over the medium-term as well as Iran, Libya and Iraq in the long-term. EFMA’s policy is that the “cost plus profit plus investment” agreement made with Russia should be the model upon which other accessions should be agreed.