Info Service on WTO and Trade Issues (Sept17/09)
19 September 2017
Third World Network
Argentina's "authoritarian" MC11 agenda views rile South
Published in SUNS #8533 dated 18 September 2017
Geneva, 15 Sep (D. Ravi Kanth) - Argentina, which is hosting the World
Trade Organization's eleventh ministerial meeting in Buenos Aires
from 10 December, has warned members to drop proposals for MC11, such
as the elimination of most trade-distorting domestic subsidies - the
Aggregate Measurement of Support (AMS) - proposed by China and India,
on grounds that it will lead to the breakdown of the conference, sources
"Argentina, which is the chair for WTO's eleventh ministerial
conference, is behaving in an authoritarian manner by telling countries
to remove their proposals so as to ensure a successful ministerial
meeting," said a source, who asked not to be quoted.
"For some time now, Argentina is setting markers as to what is
feasible and what must be removed," the source maintained.
Further, Argentina does not seem eager to finalize the permanent solution
for public stockholding programs for food security, as mandated by
the tenth ministerial conference of December 2015, on grounds that
it could pose problems at the ministerial meeting for successful resolution,
the source said.
Argentina's comments on proposals tabled by members came into the
open on Wednesday (13 September) at the informal open-ended meeting
of the Doha agriculture negotiating body.
A large majority of developing countries - the African Group, the
ACP (Africa, Caribbean, and Pacific) Group, South Africa, Zimbabwe,
the Philippines, and Venezuela - supported the joint proposal from
China and India for eliminating AMS, the most trade-distorting domestic
subsidy in the industrialized countries, as a prerequisite for commencing
the stalled reform in the domestic agricultural subsidies.
In their joint proposal - Job/Ag/102, China and India argued that
"in the Uruguay Round AMS entitlements were made available in
the Agreement on Agriculture to developed Members and some developing
"Developed Members have more than 90% of global AMS entitlements
amounting to nearly US$160 bn," the two largest developing countries
"As a result developed Members have access to huge amount of
AMS beyond their de minimis," while "most developing Members
have access only to de minimis resulting in a major asymmetry in the
rules on agricultural trade," China and India pointed out.
Further, "most of the developing Members cannot provide product-specific
Amber Box support exceeding 10% of the value of production of the
agricultural product concerned," they maintained.
The asymmetries are further accentuated because the "developed
countries and some developing countries are not even constrained by
the 10% limit," and "theoretically speaking, the product-specific
support on any product can be as high as the AMS limit."
In short, the developed countries - the United States, the European
Union, Japan, Canada, Norway, and Switzerland among others - are provided
"significant flexibilities" for supporting their trade-distorting
subsidy programs for farm products.
The flexibilities include:
i. providing significantly high amount of subsidies compared to the
value of production of the products concerned;
ii. concentrating the subsidies in a few products; and
iii. shifting the products in which the subsidies are concentrated.
China and India showed concrete examples of the AMS entitlements and
the concentration of subsidies for specific products.
The two countries argued that "another distortion arises from
the fact that Members with AMS limits have the flexibility to concentrate
the subsidies in just a few products."
Against this backdrop, China and India said "in order to achieve
the long outstanding reforms in agriculture subsidies the AMS entitlements
of developed Members must be eliminated as a pre-requisite for consideration
of other reforms in domestic support negotiations."
"Only in this way will it help reduce some of the inequities
built into the WTO rules in favour of the developed Members,"
the two Asian countries pointed out.
Egypt on behalf of the African Group, Botswana on behalf of the ACP
group, South Africa and Zimbabwe supported the joint proposal from
China and India saying it offers a proper direction for reforming
domestic farm subsidies.
China maintained that the agriculture negotiations must remain consistent
with the Doha Work Program, including the 2008 revised draft modalities
that were constructed on the basis of the development dimension.
China said the joint proposal with India showed how the developed
countries enjoyed "exorbitant privilege" for continuing
their trade-distorting domestic subsidies while curtailing minimum
flexibilities for developing countries, said a person who took part
in the meeting.
India maintained that the current Agriculture Agreement, premised
on the Uruguay Round deal, is "imbalanced" and replete with
India suggested the subsidies provided in developing countries seem
like a drop in the ocean as compared to the AMS and other trade-distorting
subsidies granted by the developed countries.
In sharp opposition, the EU and Brazil said the joint proposal from
China and India will maintain inequality between members as some developing
countries would have AMS and others would not.
"Such a narrow focus on just one accounting mechanism of trade-distorting
support represents a highly inaccurate picture of the realities of
agricultural subsidies in major countries."
[It may be recalled that in August 2003, as a counter to a US-EU bilateral
deal (on the eve of the Cancun ministerial) not to raise or focus
on each other's subsidies but focus on developing country markets,
Brazil had reached out to China and India, and created the G20 group
of developing countries on 20 August 2003, for bringing developmental
reform in global farm trade.
[The EU is on record at the Uruguay Round TNC at that time for hitting
out on Brazil and others at their move countering the US-EU deal.
Now, Brazil has jettisoned the G-20 to join hands with the EU against
them. See SUNS #5401 of 21 August 2003, "Agriculture: Key developing
countries formulate modalities approach", and #5402 of 22 August
2003, "Agriculture: G-17 get broad developing country support,
attacked by EC". SUNS]
Argentina went well beyond the EU and other critics of the China-India
joint proposal by suggesting that the joint proposal from the two
developing countries is a recipe for disaster at Buenos Aires.
It said the joint proposal does not merit any attention, and urged
members not to make such proposals at this juncture, said a participant
who asked not to be quoted.
The unusual statement from Argentina caused a flutter at the meeting,
raising the hackles of developing countries, because the MC11 host
has started fixing the markers for the ministerial meeting, the participant
The United States, which does not want any reform of the AMS and other
trade-distorting domestic subsidies at this juncture because of its
ongoing preparation for the new farm bill, said there are far too
The US expressed skepticism that members can find a solution to issues
that remain unresolved for many years.
The US urged members to use the eleventh ministerial conference for
"reflection" and not enter into any substantive outcomes.
Even on the issue of cotton subsidies, the industrialized countries
remain evasive and reluctant to address the subsidies "ambitiously,
expeditiously, and specifically," the participant said.
The EU and Brazil as well as Australia, New Zealand, and Canada from
the Cairns Group - drove home a strong message for an outcome/agreement
on domestic support at Buenos Aires.
They called for an outcome on Overall Trade Distorting Domestic Support
(OTDS) in domestic support at the Buenos Aires meeting.
Australia said that it would be presenting a revised proposal with
two or three options for a nominal ceiling for domestic support.
The EU and Brazil also made a case for an outcome based on their proposal
of a floating limit for OTDS, expressed as a percentage of the Value
Australia, Canada, New Zealand and Paraguay, however, called for a
fixed limit on OTDS in nominal terms.
The chair for the Doha agriculture talks, Ambassador Stephen Karau
of Kenya, said in his state of the play report that "a key question
is whether this limit should be fixed or floating" and "what
type of support such a limit should apply to."
Australia said that it is working on a proposal to bridge positions
on these two issues during the meeting.
Members remained divided on market access: the Philippines said any
future work program must advance the unresolved issues in the Doha
market access pillar while Paraguay and Peru suggested a work program
without any linkage to the Doha Work Program.
Russia called for the elimination of special safeguards but several
members - the EU, Korea, and the Philippines among others - said it
is impractical to address the issue at this juncture.
On export restrictions, many members supported a proposal from Singapore
for enhanced transparency notifications.
India, however, maintained that Singapore's proposal will impose burdensome
requirements on developing countries.
In sum, the upcoming eleventh ministerial meeting in Buenos Aires
has started presenting ominous signs, with the host country suggesting
what should be decided during the four-day meeting, sources said.