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THIRD WORLD ECONOMICS

Prospects for Doha agri accords at MC11 bleak

The Buenos Aires Ministerial Conference seems likely to yield an inconsequential outcome in the key area of agriculture.

by D. Ravi Kanth

GENEVA: The African Group of countries, particularly the Cotton-4 – Benin, Burkina Faso, Chad and Mali – are going to be left high and dry at the WTO’s eleventh Ministerial Conference (MC11) in December without any outcomes on their main demands for reducing developed countries’ domestic support in agriculture, sources told the South-North Development Monitor (SUNS).

Indeed, the prospects for any outcome on the outstanding Doha agriculture issues – reduction commitments in domestic support, special safeguard mechanism for developing countries, and tariff simplification in market access – are close to zero at the Buenos Aires meeting.

Meanwhile, attempts are largely focused on finalizing a cosmetic deal on the permanent solution for public stockholding programmes (PSH) for food security and enhanced transparency provisions for export restrictions on developing countries, sources said.

During intense consultations held by the chairperson of the Doha agriculture negotiations, Ambassador Stephen Ndungu Karau of Kenya, with select countries in the second half of June, it has become clear that there will not be any deal on domestic support, tariff simplification and other outstanding issues in the Doha agriculture dossier, sources said.

Part of the reason for lack of progress on domestic support is the ongoing work in the US on its new farm bill.

The US has already indicated that it will not address domestic support issues based on the Doha Work Programme.

The European Union and Brazil, which opposed each other fiercely in 2003 during the Doha agriculture negotiations over domestic support reduction commitments, are now working together, cobbling a proposal that would take on board the US demands, including shifting the burden of subsidy reduction commitments onto developing countries, sources said.

During his consultations, the chair of the Doha agriculture negotiations discussed the permanent solution for PSH, the special safeguard mechanism for developing countries, domestic support, market access and export restrictions. The chair will discuss cotton, particularly a proposal by the Cotton-4 for cutting domestic support in cotton, on 30 June.

Effectively, the chair has decided what issues it will address, instead of tackling all the outstanding Doha agriculture issues, said a source who asked not to be quoted.

Differences over PSH solution

On the proposed permanent solution for PSH which is being advanced by Indonesia on behalf of the G33 grouping of developing countries, major industrialized and several developing countries expressed their willingness to finalize an outcome by December after sorting out issues concerning safeguards for preventing the leakage of stocks into the international market, according to trade envoys who attended the meeting.

Despite the G33’s demand for considering the creation of a new annex in the WTO Agriculture Agreement to exempt market price support programmes from any AMS (Aggregate Measurement of Support) reduction commitments, the opponents said they will work towards a permanent solution but will not accept any demands for including PSH in the Green Box or creation of a special annex to include market price support for PSH.

The US, which has all along raised several hurdles to the permanent solution, urged the G33 proponents to suggest how they would address the concerns raised on the slippage of stocks procured for PSH into the international market.

The US, according to one trade envoy, said that it is not bound by the Nairobi Ministerial decision to finalize the permanent solution.

However, the US and India have held consultations on the specific elements of the permanent solution.

The EU insisted that the permanent solution for PSH, including for new programmes to be covered under the permanent solution, will only be discussed in relation to the reduction commitments in domestic support programmes, a stand that was opposed by leading G33 members.

Australia and other Cairns Group members expressed sharp concerns about leakage of stocks procured for PSH into the international market, suggesting that the G33 must come up with concrete proposals to address this.

The G33 is currently preparing a proposal on how it intends to address issues concerning the issue of transparency and leakage of stocks.

On the issue of special safeguard mechanism for developing countries as demanded by the G33, the leading opponents such as the Cairns Group led by Australia and major developed countries remained silent during the meeting. In short, barring five or six countries that pressed for a special safeguard mechanism for developing countries, no other member intervened during the meeting, sources said.

As regards export restrictions, there was wide support for an outcome at Buenos Aires, including from Argentina, which had opposed export restrictions in the past because of its export taxes.

A proposal by Singapore called for “clearer understanding on advance notification through stronger transparency provisions” so as to ensure greater predictability.

The US along with several other industrialized countries support commitments on export restrictions.

But three countries – South Africa, China and India – expressed sharp scepticism about undertaking transparency and notification requirements on grounds that these will impose onerous commitments on developing countries.

On domestic support reduction commitments, a priority area for South Africa and the African Group, the US said it will not discuss the issue in the dark, implying that countries must submit their latest notifications without further delay.

The US also insisted that all members must take commitments to reduce their domestic support, while many developing countries said they will abide by the revised draft Doha agriculture modalities text of 2008.

South Africa said the developing countries are not required to undertake commitments in domestic support as per the Doha Work Programme.

India opposed attempts to do away with special and differential flexibilities in Article 6.2 of the Agriculture Agreement.

There is not going to be any outcome on domestic support at Buenos Aires except a general statement to continue with further work because of the ongoing consultations on the new US farm bill, an authoritative source told SUNS.

The EU and Brazil, which are working jointly to introduce a proposal on domestic support, have not been able to finalize it because of concern from several EU members on the proposed reduction commitments.

Several members of the G10 group of agriculture defensive countries have also remained sceptical on domestic support.

The EU and the G10 countries are also opposed to tariff simplification at this juncture. New Zealand also suggested that it would be difficult to address tariff simplification at this point because of high prices.

In short, the stage is set for inconsequential outcomes on agriculture at the Buenos Aires meeting while silently burying the huge volume of work done in the Doha agriculture negotiations, including the revised draft modalities of 2008.

The revised draft modalities, which were blocked by the US because of the underlying commitments in agriculture, provided clear landing zones in a balanced and equitable framework. Roberto Azevedo, when he was Brazilian ambassador to the WTO before becoming the WTO’s Director-General, had said in 2011:

“The December 2008 draft modalities are the basis for negotiations and represent the endgame in terms of the landing zones of ambition. Any marginal adjustments in the level of ambition of those texts may be assessed only in the context of the overall balance of trade-offs, bearing in mind that agriculture is the engine of the [Doha] Round.

“The draft modalities embody a delicate balance achieved after ten years of negotiations. This equilibrium cannot be ignored or upset, or we will need readjustments of the entire package with horizontal repercussions. Such adjustments cannot entail additional unilateral concessions from developing countries.”

Against this backdrop, it is a telling commentary on the state of play at the WTO that the African Group of countries are given a raw deal as none of their issues in agriculture are being addressed, sources said. (SUNS8491)                      

Third World Economics, Issue No. 641, 16-31 May 2017, pp6-7


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