TWN Info Service on WTO and Trade Issues (Jun17/01)
2 June 2017
Third World Network
Permanent solution for PSH seems unlikely at MC11
Published in SUNS #8473 dated 1 June 2017
Geneva, 31 May (D. Ravi Kanth) - Major developed nations, and some of their
allies in the South are refusing to engage in substantive discussions on the
mandated permanent solution for public stockholding programmes for food
security, and a successful outcome is unlikely at the WTO's eleventh
ministerial meeting in Buenos Aires in December.
This comes out clearly in a "non-paper" reviewed by SUNS, which was
circulated on Monday (29 May) by Indonesia, which is leading the G-33 coalition
of more than 44 developing and least developed countries.
[The first operational paragraph of the Ministerial Decision on Public
Stockholding for Food Security Purposes (WT/L/913), adopted at the ninth
Ministerial Conference held in Bali, Indonesia, on 3-7 December 2013, states as
follows: "Members agree to put in place an interim mechanism as set out
below, and to negotiate on an agreement for a permanent solution, for the issue
of public stockholding for food security purposes for adoption by the 11th
[Subsequently, in November 2014, it was agreed at the General Council to have
an accelerated phase of negotiations, and to finalise a solution by end-2015.
But this did not materialise at the Nairobi Ministerial Conference. SUNS]
"It is a matter of concern that in the course of the dedicated sessions,
some Members are still questioning the justifiable objectives behind the need
for a permanent solution on Public Stockholding (PSH) for food security
purposes and have not engaged in substantive discussions by tabling their
[counter] proposals," Indonesia said.
"In our [the G-33 group's] understanding, this means that these Members
are questioning the Ministerial Decision which have been the bedrock of WTO as
an institution," Indonesia said.
Without naming the countries, Indonesia said "onerous" conditions
such as burdensome transparency notification provisions are being placed to
ensure that "developing members are unable to use the mechanism."
However, it is common knowledge that Australia, Canada, the European Union and
the United States among others have been adopting stonewalling/diversionary
tactics since the Nairobi meeting in December 2015 in frustrating the G-33
members by raising issues outside the proposals they had submitted, according
to trade envoys familiar with the development.
Indonesia drew attention to the five proposals they had submitted in the run-up
to the WTO's tenth ministerial conference in Nairobi, Kenya, in December 2015.
The G-33 group which includes Indonesia, China, India, the Philippines, Korea,
Kenya, Bolivia, Cuba, Venezuela, and Zimbabwe among others, had tabled concrete
proposals on how to arrive at the permanent solution.
In the Job document - Job/AG/54 - which was circulated a month before the
Nairobi ministerial meeting, the G-33 group spelled out the proposed permanent
It demanded an amendment to the Agreement on Agriculture (AoA) by inserting
"a new Annex 6" to include the following programmes for food security
The group suggested that the following programmes for public stockholding for
food security purposes must be included in the proposed Annex 6 to the WTO's
Agreement on Agriculture.
The programmes include:
(a) programmes for the acquisition of foodstuffs at administered prices by the
Government in developing country Members/Least Developed Country Members with
the objective of supporting low income or resource poor producers;
(b) programmes for the acquisition of foodstuffs at administered prices by the
Government in developing country Members/Least Developed Country Members and
its subsequent distribution at subsidised prices with the objective of meeting
food security requirements of urban and rural poor, and of maintaining adequate
availability of foodstuff and/or ensuring food price stability.
The G-33 maintained that the "operation of programmes" for PSH
"shall be transparent and constructed in accordance with officially
published objective criteria and guidelines."
The group stated unambiguously that the PSH programmes "shall not be
required to be accounted for in the Aggregate Measurement of Support [AMS or
amber box reduction measures]."
It clarified that the annex will suggest that "governmental stockholding
programmes for food security purposes in developing country Members whose
operation is transparent and conducted in accordance with officially published
objective criteria or guidelines shall be considered to be in conformity with
the provisions of this paragraph, including programmes under which stocks of
foodstuffs for food security purposes are acquired and released at administered
"The expenditure incurred under such programmes shall be accounted for in
accordance with Annex 6 of the AoA."
The latest Indonesian "non-paper" charged that time and again the
developed countries - the US, the EU, Canada, and Australia among others -
raised extraneous issues without discussing the G-33 proposals, according to
trade envoys familiar with the development.
The US, for example, submitted a paper to counter the permanent solution by
proposing elements "that go beyond the mandate."
The US paper had suggested the need to "review the efficacy and trade
effects of the existing public stockholding [programmes] for food security
purposes, to review the existing WTO rules and policies adopted by Members and
how these policies are constrained by those rules, and finally to establish
best practices and provide funding for capacity building to implement the
agreed best practices."
The G-33 protested these attempts by the US, which will take the negotiations
away from "finding" a permanent solution.
"General comments or utter rejections certainly will not help us to arrive
at a permanent solution as mandated by our Ministers," Indonesia, on
behalf of the G-33 members, said on 17 April 2015.
After two years of dedicated sessions for finding the permanent solution for
PSH as per the Nairobi mandate, there is little change on the ground because of
continued stonewalling/diversionary tactics adopted by "some
countries", Indonesia has suggested in the non-paper.
The non-paper underlined the renewed, longstanding calls of the G-33 members
for sustained "global trade reforms" to address "inequities and
imbalances in the Uruguay Round Agreement on Agriculture (AoA) so that all WTO
members would be governed by a multilateral trading system under the WTO which
is not only open, transparent, and market-oriented but also, more importantly,
development-oriented, fair, and provides a level playing field."
The G-33 group said "the quest for a permanent solution on public
stockholding programmes for food security goes beyond mere trade
"Such [PSH] programmes," according to the G-33 group, "are aimed
at meeting food security requirements of urban and rural poor, maintaining
adequate availability of foodstuff and ensuring food price stability."
"Whenever the discussions on permanent solution come up," the G-33
group said, they have been "hearing some Members express their concerns
such as those relating to exports from public stocks and a Member's public
stockholding programme adversely affecting the food security of other
However, the countries such as the US, Pakistan, and Australia, which often
raise these concerns about affecting the food security of other members, have
not circulated a "written proposal" or "elaborated" with
material evidence, said a G-33 trade envoy who asked not to be quoted.
In short, while attempts are made round the clock for an outcome on fisheries
subsidies which is being justified on "food security grounds" of the
United Nations Sustainable Development Goals, the actual physical food security
requirements for hundreds of millions of people living below the poverty line
in developing and the poorest countries as set out in the G-33 proposals are
being denied because of the stonewalling/diversionary tactics adopted by
"some members" at the WTO.
The permanent solution for PSH will remain as the acid test for the WTO's
eleventh ministerial meeting in Buenos Aires starting on 10 December.
"If the G-33 fails to secure an easy and effective permanent solution for
PSH at Buenos Aires, then it is safe to assume that developing countries will
never secure "developmental outcomes" at the WTO," said a trade
envoy who asked not to be quoted.