Info Service on WTO and Trade Issues (Mar17/19)
23 March 2017
Third World Network
must cover all DCs, not country-specific
Published in SUNS #8426 dated 21 March 2017
Geneva, 20 Mar (D. Ravi Kanth) - The G33 farm coalition led by Indonesia
has called for a permanent solution for public stockholding programs
to address the concerns of all developing countries, instead of any
one country-specific solution, at the World Trade Organization's eleventh
ministerial meeting (MC11) in Buenos Aires later this year, trade
envoys told SUNS.
As attempts to arrive at a permanent solution are intensified, several
members of the G33 seem concerned that a country-specific solution
is being talked about behind the scenes by some powerful deal brokers
at the WTO on the lines of what was done on export subsidies at the
tenth ministerial meeting in Nairobi, said several trade envoys who
asked not to be quoted.
India, which is a leading member of the G33 farm coalition, has demanded
that the permanent solution must cover the food security programs
implemented by all developing countries in a covered agreement that
would provide legal certainty as was the case with the Trade Facilitation
During a meeting convened by the WTO Director-General Roberto Azevedo
with trade envoys from 27 countries on Friday (17 March), Indonesia
delivered an unambiguous message on behalf of the G33 coalition that
the permanent solution for Public Stockholding for Food Security Purpose
(PSH) "shall take into account elements contained in our proposal
dated 17 July 2014, as they provide Members with a reasonable way
in addressing the food security issue faced by not only G33 members,
but also other developing countries."
In the Job/AG/27 document issued on 17 July 2014, the G33 proposed
amendments to Annex 2 of the Agreement on Agriculture (AoA) on the
basis of three elements.
(i) To add new sub-paragraph (h) to the existing Paragraph 2 of Annex
2 of the Agreement on Agriculture with a view to include certain policies
and services designed to promote rural development and poverty alleviation
adopted in developing countries;
(ii) To modify the existing footnote 5 of Annex 2 of the Agreement
on Agriculture so as to provide that acquisition of stocks of foodstuffs
by developing country Members with objective of supporting low-income
or resource-poor producers shall not be required to be accounted for
in the AMS [calculation of amber box measures];
(iii) To modify the existing footnote 5 and 6 of Annex 2 of the Agreement
on Agriculture with a view to reinforce and supplement the proposed
modification to footnote 5 and also strengthen the existing footnote
5 and 6 further so as also to cover the programs designed to lowering
prices to more reasonable levels [as compared to the 1986-88 reference
period prices for AMS calculation].
Indonesia also said "the existing provisions on public stockholding
for food security purpose under the current WTO rules will not be
able to address the real need of developing members to effectively
support their low- income or resource-poor farmers, nor to fight hunger
and rural poverty."
More important, the AoA does not provide "adequate policy space"
for developing countries to implement their justifiable food security
This is more so in the context of "higher inflation and increasing
wages in developing countries that have been building up over the
years - which are eroding and inundating the flexibility," Indonesia
Therefore, the envisaged permanent solution "must work for all
developing countries who are facing food security challenges but are
constrained by the current inequitable Uruguay Round disciplines,"
In his introductory remarks at the meeting, Azevedo said that the
permanent solution is neither an Indian issue, nor an issue of the
G33 farm coalition, said a trade envoy present at the meeting.
He acknowledged that it is a "collective members' issue"
and therefore, every member has to work hard to find the permanent
solution given the short time before the eleventh ministerial meeting.
Azevedo also suggested that the permanent solution must be found between
the G33 proposal and the interim solution agreed by the trade ministers
at the WTO's ninth ministerial meeting in Bali.
But the moot issue is whether he can convince Brazil, the United States,
Canada, the European Union, Paraguay, Pakistan, Thailand, and Australia
among others who repeatedly have stonewalled attempts to engage in
a serious conversation based on the G33 proposal on grounds that it
would undermine the AoA agreement.
At a time when major developed countries shifted all their amber box
subsidy payments to the green box which now provides US$150 billion
subsidies for the food stamps program in the US, it has become easy
to frustrate the G33's efforts in finding a credible permanent solution,
said a former trade envoy from an industrialized country.
In response to Azevedo's remarks on Friday, Canada, Pakistan, Paraguay,
the European Union, and Thailand among others stuck to their inflexible
positions all over again.
Canada, for example, said that the G33 proposal for the permanent
solution for PSH offers a "carte blanche" - implying unrestricted
policy space to developing countries.
Further, market price support programs underlying the PSH cannot be
included in the green box and such a scheme is a red line and not
politically viable, Canada said, according to trade envoys present
at the meeting.
Canada suggested rhetorically that if the Indian Food Corporation
procures wheat at prices double the market prices, it would have an
impact on the international market.
Therefore, the permanent solution must take into consideration the
systemic/export impact of the permanent solution on the Agreement
on Agriculture, Canada maintained.
Canada also said the permanent solution for PSH could have potential
impact on import displacement. It sought to know why no developing
country had notified the market purchase programs.
Therefore, Canada vehemently argued at the meeting, the interim solution
for PSH which was agreed at Bali offered a fine balance between food
security and potential distortions, suggesting that members need to
go back to the original proposal.
Pakistan said that it doesn't deny the importance of food security.
However, food security cannot be equated with stockholding programs,
Pakistan said, suggesting that members need transparency about their
public stockholding programs.
Further, the permanent solution must include adequate safeguards to
ensure that it doesn't contribute to unsustainable production and
gains for middle men, it argued.
Paraguay said the permanent solution must not lead to trade-distorting
The European Union said there are two sides to the issue of permanent
solution for PSH. The EU said the carte blanche approach for including
market price support programs in the green box would not work.
The EU suggested that it is possible to work on the basis of a permanent
solution based on the interim solution.
The other side is if members want a much broader solution of changing
the rules then it can be possible only in the context of broader negotiations
of domestic support, the EU maintained.
Norway said the interim solution is a good basis and it has to be
implemented in toto while Japan asked the G33 proponents to provide
data and information about their current programs.
The US said it does not have political guidance yet but argued that
the proposed permanent solution must not take things backwards, implying
that more flexibilities cannot be added to the existing interim solution.
India maintained that the G33 had already offered the options for
finalizing the permanent solution.
It maintained that there has to be legal certainty to the permanent
solution as and when it is finalized before the eleventh ministerial
In short, the G-33 members face a Herculean battle in the next nine
months for ensuring an outcome that would provide a credible and legally-sound
permanent solution for PSH for all developing countries at the Buenos
Aires meeting later this year, trade envoys said.