Info Service on WTO and Trade Issues (Dec15/20)
23 December 2015
Third World Network
Nairobi green signal for continued US trade-distorting agri-exports
Published in SUNS #8161 dated 22 December 2015
Nairobi/New Delhi, 21 Dec (D. Ravi Kanth) - The Nairobi "deliverable"
on export competition on Saturday (December 19) provided a major victory
for the United States, which secured the green signal to continue
with its current trade-distorting agri-export programs with export
credits, and food aid.
The US, Brazil and the EU also ensured that India did not get the
language it proposed on the accelerated work program for the special
safeguard mechanism (SSM) and permanent solution for public stockholding
programs for food security.
The so-called G-5 meeting involving the United States, the European
Union, China, India, and Brazil witnessed several battles on outcomes
concerning export competition, SSM, and public stockholding programs
for food security.
"Our work to secure a global (accord) on export subsidies will
help level the playing field for American farmers and ranchers,"
the US Trade Representative Ambassador Michael Froman claimed after
the meeting. "The WTO's actions in this area will put an end
to some of the most trade distorting subsidies in existence and demonstrates
what is possible when the multilateral trading system comes to solve
a problem," he said, suggesting that members should pursue new
The language on export subsidies says, "developed members shall
immediately eliminate their remaining scheduled export subsidy entitlements
as of the date of adoption of this Decision" but with several
caveats including that it "shall not cover processed products,
dairy products, and swine meat of a developed member" until 2020.
Switzerland, Canada and Norway have four years to continue with export
subsidies for processed products and dairy products even though they
sought seven years, said a source familiar with the G-5 meeting.
India did not secure what it wanted on export subsidies but managed
to retain Article 9.4 of the Agreement on Agriculture. The developing
countries will have to end their export subsidies by 2023 as compared
to 2028 in the facilitator's first draft issued on December 17.
But in a footnote on export subsidies in the final decision, India
is forced to agree to eliminating "its export subsidies by the
end of 2022 for products or groups of products for which it has notified
export subsidies in one of its three latest export subsidy notifications
examined by the Committee on Agriculture before the date of adoption
of this Decision."
On export credits, the US managed to secure maximum repayment period
for 18 months with a standstill provision for the existing programs.
The 2005 Hong Kong Ministerial Declaration and the 2008 revised draft
modalities suggested a repayment period of only 180 days or six months.
The US also secured flexible disciplines on self-financing in the
terms and conditions for export credits. The developing countries
are offered four years, by 2020, to phase-out their current repayment
terms for export credits and subsequently, continue with a maximum
repayment period of 18 months.
The agreement on food aid is specifically beneficial for the US as
it contains only limited disciplines without covering the monetization
of non-emergency food aid, said an official familiar with the meeting.
The European Union which sought stronger binding disciplines on food
aid in accordance with the 2008 revised draft modalities agreed to
the outcome without much opposition, a European official said.
The disciplines on agricultural exporting state-trading enterprises
contain best endeavour provisions "to ensure that the use of
export monopoly powers by agricultural exporting state trading enterprises
is exercised in a manner that minimizes trade distorting effects and
does not result in displacing or impeding the exports of another Member."
On special safeguard mechanism and the public stockholding programs
for food security, India managed to get an accelerated work program
with indefinite timeframe. Though India, China, and Turkey asked for
concluding the decisions on these two issues by end-2017, there is
no time frame in the final decision issued at the Nairobi ministerial
The decision on SSM mentions the Hong Kong Ministerial Decision but
not the 2008 revised draft modalities of the Doha negotiations. The
US effectively ensured that there is no mention of DDA decisions in
SSM, said a source familiar with the meeting.