./. WORLD TRADE  
ORGANIZATION   
TN/AG/GEN/9 
7 May 2004 
 (04-2059) 
 Original:   English 
  
 
COMMUNICATION FROM THE G-20
1 
  
 The following communication, dated 7 May 2004, is being circulated at the request of the 
Delegation of Brazil. 
 
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"THE BLENDED FORMULA" 
 
A Fundamentally Flawed Approach to  Agricultural Market Access  
 
The US and the EC put forward "the Blended formula" for tariff reductions in the Joint Text 
presented on 13 August 2003, which was carried forwar d to the Derbez Text.  "The Blended formula" 
encompasses, on a self-declaratory basis, a propor tion of tariff lines subject to the Uruguay Round 
tariff reduction formula;  a proportion of tariff lines s ubject to the "Swiss" formula and a proportion of 
tariff lines to be made duty-free. 
Following failure to agree on a framework te xt in Cancun, the G-20 undertook an overall 
assessment of "the Blended formula".  The conclu sion was that its structural flaws would prevent 
proper delivery on the Doha mandate for market access.   It is a meticulously structured approach to 
accommodate the interests of the proponents and detrim ental to the interests of the majority of the 
Membership. 
Criticism of "the Blended formula" falls into two main categories: 
 
I.  "The Blended formula" fails to deliver "substantial improvements in market access", 
especially for products protected by tariff peaks . 
  The tariff structures of developed countries are characterized by clusters of very high tariffs 
(tariff peaks) while the majority remain at  fairly low levels or even duty-free.  
 "The Blended formula" enables Members to define, on a self-declaratory  basis, the 
tariff lines to be subjected to the Uruguay Round formula.  Coupled with the average reduction element of the Uruguay Round formula, this would most  likely lead to a situation in which those tariff 
lines of higher commercial interest to many Me mbers would be subject only to minimal cuts - 
creating an unacceptably large  self-declaratory opt-out mechanism . 
 Given their typical tariff structures, th e role of the Swiss- and the duty-free 
components of "the Blended formula" in mo st developed countries is merely symbolic. 
 The likelihood of increased market access fo r the tariff lines subject to Tariff-Rate 
Quotas (TRQs) also remains uncertain. 
                                                      
1 Argentina, Bolivia, Brazil, Chile, China, Cuba, Eg ypt, India, Indonesia, Mexico, Nigeria, Pakistan, 
Paraguay, Philippines, South Africa, Thailand, Tanzania, Venezuela, Zimbabwe. TN/AG/GEN/9 
Page 2  
 
 II.  Inequitable results arise from the application of "the Blended formula" on the different 
tariff structures of developed and developing countries.  
 The use of the Swiss formula for a specific  range of tariff lines in homogeneous tariff 
structures (i.e., with little tariff dispersion) as found mainly in developing countries will lead to higher 
tariff reductions by those countries.  Simulations undertaken using various plausible assumptions with 
regards to the Swiss formula rev ealed that Members entitled to "sp ecial and differential treatment" 
will be required to make proportio nally higher average tariff reducti ons than developed Members. 
 Unlike in developed countries, where the role of the Swiss- and duty-free components 
of "the Blended formula" is symbolic, for deve loping countries with homogeneous tariff structures, 
those components would entail very substantial ta riff reduction commitments.  Consequently their 
rural development, food security and/or liv elihood security needs would be overlooked. 
 In addition, "the Blended formula" does not provide for the special concerns 
expressed by newly acceded countries and many ot her developing countries, including LDCs. 
 The S&D provisions currently under discu ssion will not compensate for these flaws 
of "the Blended formula". 
 
III.  Conclusion 
 
 The structural flaws of "the Blended form ula" would prevent proper delivery on the Doha 
mandate for market access.  There is  a shared feeling that "the Blended formula" is biased in favour of 
the tariff structures of its proponents, enabling them to maintain the protectionist status quo , since the 
highest tariffs would be subject to the lowest tariff  reduction.  In view of the difference between the 
tariff structures of developed a nd developing countries, "the Bl ended formula" would impose an 
overly onerous burden of tariff reduction on developing countries.  At the same time, it would enable 
developed countries to protect their tariff peaks on products of export interest to several Members, 
while the application of the Swiss- and duty-free components on their cluster of already low tariffs 
would result in minimal tariff reductions. 
 
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