Chinese Minister of Commerce Bo Xilai and Minister of Agriculture Sun Zhengcai have jointly sent a letter to the World Trade Organization (WTO), making clear China's key positions on the organization's agriculture trade talks, the Chinese Permanent Mission to the WTO revealed on Monday.

"Effective cuts in trade-distorting domestic farm support by developed members must be achieved in real terms, " said the letter, which was signed on May 18 and addressed to WTO chief Pascal Lamy, General Council Chairman, Ambassador Muhamad Noor Yacob and Chairman of the Special Session of the Committee on Agriculture, Ambassador Crawford Falconer respectively.

Agriculture trade talks are a key part of the WTO's wider Doha Round multilateral trade negotiations, which have gone through five years but still inconclusive. The WTO's developed members, particularly the United States, have been under great pressure to offer further cuts in domestic farm support to move the talks forward.

"For many years, due to the huge amount of trade-distorting domestic support provided by the developed members, the world price for agricultural products has been artificially depressed, adversely affecting the livelihood of the farmers in the developing countries," the letter said.

"China has a rural population of 740 million, whose livelihood has been seriously affected by the import of products with huge amount of trade-distorting domestic support by developed members, particularly those which are heavily subsidized such as wheat, cotton, and soybeans," it added.

"We emphasize that no matter what the final figures would be, we have to ensure cuts in real terms. It should be set at a point which is lower than the current applied level of the developed members, and not at a point only to squeeze out part of the water, " it stressed.

In the letter, the two ministers praised Falconer for his important role in revitalizing the multilateral process of the Doha Round talks.

In a "challenge paper" circulated to WTO members earlier this month, Falconer presented his own proposals on agriculture negotiations in order to stimulate responses from WTO members so that a possible landing zone could be found.

Some of Falconer's thinking reflects the views of China as well as other developing members, such as "effective cuts in trade- distorting domestic support," and application of tiered formula proposed by the G20 related to tariff reductions for developed members, the letter said.

But the fundamental problem with the current paper is that the concerns of the developed members and those of developing members are not addressed in a balanced way. Specifically, emphasis on domestic support and market access are not balanced, and concerns of the developing members on the market access are not properly treated, according to the letter.

The two ministers said that Falconer's new concept whereby all developing members would undergo an overall minimum average cut in tariffs is not in line with principles already agreed by WTO members.

"As the tariff structure of the developing members is quite different from that of the developed, they should be entitled to have different thresholds as well as different proportionate cuts, " the letter said.

On special products (SPs), the letter said that Falconer's interpretation of the "flexible treatment" of SPs is misleading. "We are firm on this point that 'flexible treatment' should in no way exclude the entitlement of exemptions."

The letter also urged Falconer to reconsider his proposal on the number of SPs, as it "differs significantly from the positions of some members and have not fully addressed their concerns."

According to the two ministers, it may be difficult for WTO members to agree to Falconer's proposal that developing members should consider a Uruguay Round approach for an average tariff cut.

Besides, the proposed drop of special and differential treatment such as SPs and two-third approach for cuts would not only further complicates the issue, but also makes it impossible to effectively tackle the major concerns of the developing countries, the letter said.

The two ministers also stressed that specific concerns of Recently Acceded Members (RAMs) should be effectively addressed in the next paper which Falconer is expected to circulate soon.

"We strongly appeal to the Chair to spell out clearly in the text that RAMs are entitled to have less cut and exemptions for some of their SPs so that the concerns of the RAMs will be effectively addressed and those imbalances between the RAMs and other members reduced," the letter said.

Editor: Yan