TWN Info Service on WTO and Trade Issues (Jul17/11)
17 July 2017
Third World Network
South nations for ending AMS, cuts in "green box" in agriculture
Published in SUNS #8503 dated 17 July 2017
Geneva, 14 Jul (D. Ravi Kanth) -- Major developing countries on Wednesday (12
July) called for the elimination of Aggregate Measurement of Support (AMS) as
well as significant reduction commitments of minimally trade-distorting green
box programs in the developed countries in the ongoing Doha agriculture
negotiations at the World Trade Organization, trade envoys told SUNS.
China, India, Egypt, and other developing countries also emphatically rejected
calls for curtailing their de minimis support and the flexibilities accorded to
them in Article 6.2 of the WTO's Agreement on Agriculture (AoA).
The United States, the European Union, Australia, and Brazil among others are
calling for cutting down de minimis support as well as doing away with Article
6.2 of the AoA that accords special flexibilities to developing countries for
agriculture and rural development.
The developing countries opposed attempts to impose an overall trade-distorting
domestic support (OTDS) as a percentage of overall production.
Significantly, major farm producing countries such as Australia, New Zealand,
and Argentina among others also called for sharp reduction commitments in blue
box and green box measures as provided by the US, the EU, and several other
industrialized countries because of their continued trade-distorting effects.
At a meeting of trade envoys from select countries convened by the chair for
the Doha agriculture negotiations, Ambassador Stephen Karau of Kenya, the
differences on proposals for reducing trade-distorting domestic support came
into the open between major developing countries such as China, India, Egypt,
and the Dominican Republic on the one side, and the US, the EU, Australia,
Brazil, and other farm exporting countries on the other, according to trade
envoys present at the meeting.
Ahead of the meeting on 12 July, the chair posed two questions to the invited
members for eliciting their views.
Ambassador Karau sought to know whether the existing Agreement on Agriculture,
which was negotiated in the Uruguay Round, can be retained for limiting the
overall trade-distorting support, and second, how to calculate the limit on the
overall trade-distorting domestic support (OTDS).
Australia, which took the floor first during the meeting, said the OTDS should
be nominally fixed instead of calculating as a percentage of the overall
Australia called for sharp reduction commitments in the AMS, including
product-specific subsidies, de minimis support, and blue box direct payments
under production-limiting programs. Australia also called for tackling the
green box programs involving government service programs in the Annex 2 of the
The European Union insisted that the AoA should be left untouched at this
juncture given the paucity of time for the eleventh ministerial meeting in
Buenos Aires in December. The EU, however, said members can construct an
additional layer of fixing OTDS to the AoA. It argued that the OTDS can be
capped as a percentage of the value of overall production.
Significantly, Brazil, the EU's new partner-in-arms in the current agriculture
negotiations, supported fixing an overall OTDS in percentage terms of the
overall value of product.
In the past, Brazil was responsible for creating the coalition of G20
developing countries before the WTO's fifth ministerial meeting in Cancun
(2003) to fight the US-EU accord to sidestep their own subsidy programs and
commitments to cut them, but focus on opening up developing country markets
through the reduction commitments in domestic support.
Now, Brazil has joined hands with its erstwhile foe to circulate a
controversial proposal that will curtail the flexibilities accorded to
developing countries, said a trade envoy who is familiar with the Brazilian
The EU-Brazil proposal is yet to be circulated officially to members but it
will meet the same fate as the US-EU proposal in August 2003, the envoy said.
The EU opposed any changes in the blue box and green box support programs as
suggested by Australia, New Zealand, and Argentina among others.
Brazil supported the EU's proposal for fixing the OTDS as a percentage of the
value of total production. Brazil and Colombia also called for fixing the OTDS
in relation to the value of overall production.
Brazil's shifting stands in the Doha agriculture negotiations remains a source
of mystery because in the past, Brazil said the revised draft modalities of
2008 are the ultimate basis for any reform of the Doha agriculture
The former Brazilian trade envoy Ambassador Roberto Azevedo, before becoming
the WTO's director-general, said in 2011: "The December 2008 draft
modalities are the basis for negotiations and represent the end-game 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
After becoming the director-general in September 2013, Azevedo changed his tune
and said "if any of you insist that those (2008 draft modalities texts)
are cast in stone and unalterable, then you have made a choice; a choice that
irreparably condemn our efforts to a failure."
In 2015, Brazil joined hands with the EU to propose disciplines in the export
competition pillar in which the two sheltered the US from undertaking any
commitments in export credits and food aid.
Against this, the joint proposal by Brazil and the EU on domestic support which
will be circulated in a day or two will fail to garner support, the envoy
During the discussion on Wednesday, China said the biggest item of trade-distorting
domestic support is AMS that requires it to be eliminated altogether. China
said the AoA based on the Uruguay Round negotiations is replete with
Therefore, it cannot continue with the AMS and without the elimination of AMS
the AoA will continue to perpetuate the historical inequities in global farm
trade. China said the AoA has to be reformed by eliminating the AMS.
More important, China said it will not accept any attempt to reduce the de
minimis in the AoA. China also severely questioned fixing the OTDS without
addressing the inequities.
India said it will fiercely oppose any attempt to touch Article 6.2 emphasising
it is a red line. India also called for elimination of AMS. It said the time
has come for reforming the green box support programs that are provided by the
US and the EU.
New Zealand and Argentina among others supported Australia's proposal for
fixing OTDS at a nominal figure instead of limiting it in percentage terms of
the overall value of production.
New Zealand said it prefers an elimination of AMS while suggesting that the
existing AoA could be continued.
Argentina raised sharp concern over the continued increase in all forms of
trade-distorting support, including blue box measures as well as green box support
Egypt said that the major trade-distorting programs are AMS and green box
support programs. It opposed attempts to reform Article 6.2 of AoA involving
special and differential treatment flexibilities for developing countries.
Egypt pointed out that the industrialized countries continue to use
unconstrained support for the green box while suggesting that the developing
countries must not have any flexibilities.
The G10 farm defensive countries such as Norway, Switzerland, and Japan
suggested that they would like to continue with the existing AoA along with
their amber box support programs. Norway opposed attempts to fix OTDS based on
a percentage of the value of overall production.
The United States said that it is not prepared to negotiate in darkness
suggesting that some major developing countries have not even tabled their
notifications. The US said all members must undertake commitments in all forms
of trade-distorting support.
In conclusion, the major developed countries along with Brazil are reversing
the progress made in the Doha agriculture negotiations, particularly the 2008
revised draft modalities, just to ensure that China and India are forced to
undertake commitments to reduce their de minimis and curtail Article 6.2
flexibilities, said trade envoys who asked not to be quoted.
Trade observers noted that in the Uruguay Round culminating in the Marrakesh
Treaty and its annexed agreements, developing countries undertook a range of
new commitments on trade in goods, trade in services and in intellectual
property protection, thus paying an advance price in return for commitments of
the EU, US and other industrialised countries to reverse course on global
agriculture trade, and over time reduce and eliminate their various subsidy
programs (domestic support, border protection and export support).
Their current stance means going back on their commitments on reform of their
agriculture sectors. +