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TWN Info Service on WTO and Trade Issues (Jan17/03)
23 January 2017
Third World Network


LDCs push for concrete outcomes at MC11 on agri domestic support
Published in SUNS #8385 dated 23 January 2017


Geneva, 20 Jan (D. Ravi Kanth) -- Despite the uncertainty and unpredictability induced by the new Trump administration's unilateral demands in global trade, the least-developed countries have raised the antennae for concrete outcomes for reducing trade-distorting domestic support at the World Trade Organization's eleventh ministerial meeting in Buenos Aires later this year.

The LDCs in particular are pushing for concrete outcomes in cotton and other products of interest to them, according to a proposal perused by SUNS.

The negotiations over the next ten months, the LDCs maintained, "must produce a substantial decrease in trade- distorting domestic support and a reduction of existing asymmetries in permitted domestic support measures, with a focus on the products of particular interest for LDC exports."

In a restricted proposal circulated on 13 January, the LDCs maintained that agriculture contributes "directly to export revenue, to the means of livelihood in rural areas, to poverty reduction and to food security."

Given the heavy dependence on agriculture populated with small-scale farms and semi-substance farmers, most of the LDCs remained net food importers despite a large under-utilized potential in agriculture, Benin, on behalf of the LDCs, argued.

Citing paragraph 31 of the Nairobi Ministerial Declaration that reaffirmed "the commitment of all WTO members to advance the negotiations on the remaining Doha issues, including domestic support in agriculture, and cotton in particular," the LDCs underscored the need for credible and concrete outcomes for "a substantial decrease in trade-distorting domestic support and a reduction of existing asymmetries in permitted domestic support measures, with a focus on the products of particular interest for LDC exports."

The LDCs demanded the following disciplines:

(i) a binding overall limit applicable to the sum of all trade-distorting domestic support measures, including AMS commitments, blue box measures and permitted de minimis levels;

(ii) total elimination of domestic support by product, beyond de minimis levels, in order to avoid excessive concentration of domestic support on products of particular export interest to the LDCs;

(iii) progressive decrease in permitted domestic support measures, appropriately based on the aggregate commitments defined above;

(iv) clarification of the green box criteria and disciplines to ensure that measures in that category have no, or at most minimal, trade-distorting effects;

(v) special and differential treatment that takes full account of the development and food security needs of developing countries, and exemption of the LDCs from any reduction commitments.

On cotton, which is a burning issue that remains unaddressed since 2003 because of the intransigent positions adopted by the US, the LDCs demanded "a significant reduction, with a view to total elimination, of all types of domestic support that have distorting effects on the cotton market."

Against this backdrop, the LDCs want that negotiations over the next ten months must aim for "a first set of outcomes".

The outcomes include:

(a) an overall limit on the sum of all trade-distorting domestic support measures, including commitments on AMS (aggregate measurement of support), blue box measures, and permitted de minimis levels both for developed countries and the developing countries;

(b) an overall limit on product-specific AMS, particularly as regards products of specific interest to the LDCs;

(c) an overall limit on the sum of all trade-distorting domestic support measures for cotton.

The LDCs proposed one or several methods to fix an overall limit on the sum of trade-distorting domestic support measures for cotton.

The methods comprise: (1) a fixed numerical limit on domestic support specific to cotton; (2) a limit defined as a percentage of the value of production of cotton; (3) a limit on trade-distorting cotton support measures defined as a maximum percentage of all product-specific support; and (4) a limit on transfers to cotton producers expressed as a percentage of gross agricultural revenue from cotton.

Further, the LDCs called for a "timetable for the implementation of the decisions taken at the eleventh ministerial meeting."

The LDC proposal with elements and parameters, according to Benin, "represent a first stage in the reform process and towards adopting a minimum package that would ensure a significant outcome for MC11 on domestic agriculture support measures with a strong development impact."

More importantly, the outcomes on domestic support at the WTO's eleventh ministerial meeting in Buenos Aires must "form the basis for further negotiations" for correcting and preventing "distortions in agriculture and establish a fair and market-oriented agriculture trading system, as provided for in Article 20 of the Agreement on Agriculture."

The LDC proposal, though mentioning the importance of advancing negotiations on the remaining Doha issues, remained conspicuously silent on the work done in the Doha Development Agenda negotiations, particularly the revised draft modalities of 2008 on agriculture.

In an attempt to secure support from the Cairns Group of farm exporting countries, the LDCs seem to have raised demands that would impinge on countries such as India, Indonesia, China, and other developing countries that have serious livelihood and food security concerns.

For example, the demand for cutting down de minimis support by developing countries which was exempted in the Rev. 4 text of the 2008 modalities could endanger the interests of poor farmers in many developing countries that have conditions worse than what are being witnessed in LDCs.

Further, the LDCs, while justified in demanding the biggest users of AMS and counter-cyclical payments in blue box such as the US to cut their subsidies, might face fierce opposition from Washington.

The new nominee for US agriculture secretary, Sonny Perdue, a former Georgia governor, is a champion of the grain and fertilizer business.

According to democracynow. org, Perdue had received huge subsidies for chemical corporations and factory farming.

In short, the LDCs face a (rogue) elephant which has already announced its intentions to run amok in the global trading system, according to several analysts. Ironically, it wants to remove the "asymmetries" that denied it the benefits in the global trade since 1945. +

 


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