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Meagre harvest on agriculture and food security issues The Ministerial Conference yielded little in the way of concrete farm trade reform outcomes, with longstanding concerns of developing countries still awaiting resolution. Ranja Sengupta AGRICULTURE has always been a critical component of any WTO Ministerial and MC12 was no exception. Critical issues such as the permanent solution on public stockholding (PSH), the special safeguard mechanism (SSM), and issues related to ensuring fair markets for cotton have been long pending. The importance of addressing agriculture-related issues was compounded by the cumulative food crisis triggered by the pandemic and followed by the Russia-Ukraine war in the Black Sea region. The explosive inflation in food prices, further reinforced by the price hikes in fuel and fertilisers, has created massive challenges for meeting food security, ensuring nutrition and eradicating hunger worldwide. For developing countries, in particular net food-importing developing countries (NFIDCs) and least developed countries (LDCs), this problem is particularly acute as many of them are net importers without adequate capacity to produce enough to meet domestic demand, and a volatile and explosive global market has also eroded their already fragile financial capacity to fund such imports. The proposed Decision on Agriculture MC12 saw three major initiatives gain traction in the area of agriculture and food security. The first was a Decision on Agriculture (tabled as WTO document JOB/AG/232) comprising a work programme covering a number of issues that have been discussed or raised in the WTO Committee on Agriculture. Of these, the PSH issue has a clear mandate and a strong deadline of 2017 that was already unmet. The SSM and cotton issues also have strong mandates. In addition, the Cairns Group of agriculture exporter countries had tabled a proposal for disciplining domestic agricultural support, a longtime demand of developing countries, but without recognising special and differential treatment (S&DT) for developing countries in their use of the Development Box (Article 6.2 of the WTO Agreement on Agriculture (AoA)) or the de minimis provisions (Article 6.4 of the AoA). Issues of newer origin such as disciplines on export restrictions and transparency, along with that of market access, were also included. Interestingly, in spite of several constructive proposals submitted on the permanent solution on PSH in 2021 by the African Group (JOB/AG/204) and the G33 (JOB/AG/214), and then a combined proposal submitted on 31 May 2022 by the African, Caribbean and Pacific (ACP) Group, the African Group and the G33 (JOB/AG/229), the much-delayed outcome was outright refused even in MC12. In addition, there were attempts to bring in similar deadlines and mandates to ‘agree and adopt by MC13’ outcomes across all the issues being negotiated. This would have meant developing countries would have had to make commitments to agree and adopt expected adverse outcomes on issues such as market access, export restrictions and transparency if they wanted to secure outcomes for PSH, SSM and cotton. Due to disagreements among Member States, this Decision on Agriculture was finally not adopted. While for PSH, SSM and cotton, it would have been useful to get strong timelines for outcomes, the mandates to negotiate and reach outcomes still hold. For PSH, even in the absence of new clear modalities, the earlier mandate given by the Bali Decision of 2013 and the modalities of the Nairobi Decision of 2015 will continue to hold and the mandate of negotiating a permanent solution continues to exist until the permanent solution is found, irrespective of the MC11 deadline. Paragraph 1 of the Bali Decision (WT/MIN(13)/38 – WT/L/913) of 2013 says: ‘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 Ministerial Conference.’ The Nairobi Ministerial Decision (WT/MIN(15)/44 – WT/L/979) of 2015 says that Members ‘shall engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes. In order to achieve such permanent solution, the negotiations on this subject shall be held in the Committee on Agriculture in Special Session (“CoA SS”), in dedicated sessions and in an accelerated time-frame, distinct from the agriculture negotiations under the Doha Development Agenda (“DDA”)’. Therefore, an outcome must be reached at the earliest. The outcomes on SSM and cotton must also be pursued to be delivered by MC13, and domestic support discussions must integrate effective and appropriate S&DT. Further, these outcomes must be delivered without being linked to other issues. The Food Insecurity Declaration The second agriculture-related initiative at MC12 resulted in the adoption of a ‘Ministerial Declaration on the Emergency Response to Food Insecurity’ (WT/MIN(22)/28 – WT/L/1139). The Declaration comprises soft law and directives on issues that aim to enable Member States to deal with critical food crisis situations. It however fails to provide any immediate new tools to developing countries, NFIDCs and LDCs to deal with issues related to food crises, more of which are expected to emerge in the future. The language consists largely of reaffirmations of existing commitments, such as those already agreed in the AoA, the Marrakesh Decision of 1994 on NFIDCs (paragraph 8) or the Nairobi Decision on Export Competition (paragraph 7) with special reference to international food aid. Language on increasing production and productivity, much needed for developing countries, NFIDCs and LDCs, faced strong resistance and found some mention only after persistent demands by the latter. This is notwithstanding the fact that increasing production would immensely boost efforts to stabilise a highly volatile and concentrated global market by diversifying and supplementing food supplies, and can strengthen the fight against food crises in the future. Boosting production and productivity is not inimical to the interests of a strong global trade regime but is so to the interests of global trade monopolies. In contrast, paragraph 4 on export restrictions and paragraph 5 on emergency trade have been the key targets of developed countries and represent their major area of commercial interest in this Declaration. It is clear that one of the key reasons behind developed countries’ push for the removal of export restrictions in developing countries is to access their raw materials, as also evident in the push to remove export taxes under bilateral free trade agreements. While paragraph 4 purports to be a reaffirmation of existing commitments, along with the flexibilities, to use export restrictions according to relevant WTO provisions, this paragraph in fact urges Members not to use export restrictions. This is also an attempt to accelerate the currently ongoing push for negotiations on this issue under the Committee on Agriculture and to reach an outcome at the earliest. The use of export restrictions is a complex issue. While there are adverse impacts on importing countries especially NFIDCs and LDCs if export restrictions are imposed, the domestic food security needs of the exporting country also have to be recognised, especially if it is a developing country, NFIDC or LDC. This is recognised by Article XI.2(a) of the General Agreement on Tariffs and Trade (GATT) and Article 12 (in particular 12.2) of the AoA. Paragraph 5 of the Declaration is also problematic as it advances language earlier adopted by the G7 major developed countries to ‘ensure that any emergency measures introduced to address food security concerns shall minimise trade distortions as far as possible; be temporary, targeted, transparent, and proportionate’. Together, paragraphs 4 and 5 attempt to limit export restrictions and other emergency measures, without any S&DT including for NFIDCs and LDCs, which are then in principle required to restrict their existing flexibilities. It is important to note that Article XI.2(a) of GATT provides exemption for ‘export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party’. Therefore countries already need to pass tests related to length of the period of application, as well as shortage and essential nature of the product. Paragraph 5 provides additional tests currently not required by WTO rules for all Members including NFIDCs and LDCs. At a minimum, Paragraph 5 is a commitment that will make it politically more difficult for LDCs and developing countries to impose emergency measures to address food security. These restrictions in paragraph 5 may lead to a subsequent agreement that affects the interpretation of and thus restrict existing flexibilities such as GATT Article XI.2(a). Even ‘soft rules’ related to export restrictions or emergency trade measures under paragraphs 4 and 5 should not prejudice future negotiations in the Committee on Agriculture and erode policy space provided by the current WTO agreements. Another issue to watch out for is the push for language related to ‘sustainability’ of agriculture and food systems. While such language comes from Sustainable Development Goal (SDG) 2, it can be used to push specific interpretations of such systems that are then used to bring in disciplines on environmental issues without there being a specific mandate to do so. It is to be noted that there is no internationally agreed definition, including at the UN Food and Agriculture Organization (FAO), of a sustainable food system. But there have been attempts by some developed countries to manipulate such definitions and use these in trade agreements to push certain disciplines related to environment and trade as well as set standards that would help their commercial interests. However, a sustainable agriculture and food system must be a system that balances the three pillars (i.e., economic, environmental and social) of sustainable development, works for developing countries and LDCs, and gives them the necessary policy tools to support smallholder agriculture, enhance productivity and production and meet the targets of SDG 2. The only substantial and positive contribution that this Declaration makes is to set up a ‘dedicated work programme in the Committee on Agriculture to examine how this Decision [i.e., the 1994 Marrakesh Decision on NFIDCs] could be made more effective and operational pursuant to Article 16 of the Agreement on Agriculture and to consider concerns raised by Members in their current and future submissions. The work programme shall consider the needs of LDCs and NFIDCs to increase their resilience in responding to acute food instability including by considering the best possible use of flexibilities to bolster their agricultural production and enhance their domestic food security as needed in an emergency’. The 1994 NFIDC Decision places the onus on donor countries and international financial institutions (IFIs) to provide food aid and technical and financial support to NFIDCs and LDCs to help them cope with the adverse impacts of the reform programme under the AoA. However, this Decision has never been very well implemented. In the dedicated work programme, apart from exploring the implementation gaps, several tools could be suggested to ensure the implementation of the NFIDC Decision meets current challenges as a significant part of the special vulnerability of NFIDCs and LDCs arises from the impacts of AoA reform which has brought in unfair rules on subsidies and constrained the policy space of NFIDCs and LDCs to increase production and productivity. Such tools can include: • Setting up of a fund with contributions from donor countries and IFIs but to be managed and disbursed by NFIDCs and LDCs themselves. • Support for building stocks under PSH programmes of key food products of which the country is a net importer. This may include price support to farmers and to consumers which may exceed currently prescribed WTO limits. In the case of price support subsidies, the principle of Article 18.4 of the AoA may be applied. • Allowing long-term policy flexibility by adjusting WTO rules to give subsidies and grants to farmers to augment productivity and production in NFIDCs and LDCs, especially to small-scale farmers for food products of which the country is a net importer. • The Nairobi Decision on Export Competition already gives a good framework and safeguards for aid. But aid itself has to be increased under a crisis situation, and certain safeguard conditions may be waived if requested specifically by the recipient NFIDC/LDC. • The option of keeping supply and financial payment channels open for food exports to NFIDCs and LDCs during a period of food crisis, can be included as a short-term measure. The Decision on the World Food Programme (WFP) A key outcome much touted as another of the great successes of the Ministerial was the ‘Ministerial Decision on World Food Programme Food Purchases Exemptions from Export Prohibitions or Restrictions’ (WT/MIN(22)/29 – WT/L/1140). This Decision includes a legal commitment that ‘Members shall not impose export prohibitions or restrictions on foodstuffs purchased for noncommercial humanitarian purposes by the World Food Programme’ (paragraph 1). However, the right of Members to ensure their domestic food security in accordance with the relevant provisions of the WTO agreements is recognised in paragraph 2. This Decision, though a positive initiative in principle, cannot be seen as a solution to the gigantic problem of assuring long-term food security to all, especially in developing countries, NFIDCs and LDCs. The WTO needs to provide more constructive solutions that address the structural causes of an inequitable global trading system. But in addition, there are some key issues that need to be kept in mind. Since this Decision imposes a permanent commitment, a pertinent linkage arises with the permanent solution on PSH which was not delivered in MC12. PSH programmes remain an important policy instrument across developing countries and LDCs for ensuring domestic food security and dealing with situations of crises including but not limited to food crises as witnessed during the COVID-19 pandemic. Since the WFP Decision is now agreed, the permanent solution is even more justified and must be agreed at the earliest. There are also questions related to the obligations that are imposed on NFIDCs and LDCs, the possible impact on global markets, and whether this would lead to and also prejudge future obligations related to export restriction disciplines on agricultural or even non-agricultural products.1 Some strategy-related concerns in relation to agriculture and food security Prior to MC12, a few strategies or approaches seemed to have been deployed by the developed countries as well as leading agricultural exporters of the Cairns Group, supported by the WTO Director-General (DG) and WTO Secretariat, to use both the pandemic and the food crisis to their advantage. First, right from 2020 until MC12, the developed countries consistently recommended further trade liberalisation and keeping ‘trade open’ at all costs, primarily through the removal of or constraints on export restrictions and the removal of import tariffs in order to address the adverse impacts of the pandemic and the food crisis. At the same time, there was an active discouragement of efforts to augment domestic productivity and production across developing countries and LDCs. There was a complete hijacking of the narrative and advancement of false solutions. Second, the developed countries effectively used a dual strategy, though not unseen before, regarding proposals put forward in the WTO. On the one hand, they were the first to table proposals, and on the other hand, they persistently blocked any discussion or negotiations on developing-country proposals, even when the issue was of key interest to developing countries. The perfect example of this was the initiative by the DG and the G7 to table the proposal on food security while refusing to even consider proposals from NFIDCs and LDCs. This forced other developing countries, NFIDCs and LDCs to be in response mode and work on a base text which was already biased in favour of the commercial interests of the developed countries. On the issue of PSH, this combination of options was turned around by first blocking proposals submitted by the African Group (JOB/AG/204), the G33 (JOB/AG/214) and then a combined proposal submitted by the ACP Group, the African Group and the G33 (JOB/AG/229), and following it up with some counterproposals such as by Brazil. The third strategy is the extensive use of exclusive ‘Green Room’ negotiations in the lead-up to and during MC12, justified this time in the name of the Russia-Ukraine conflict. The agriculture texts were negotiated completely in Green Rooms with very few Members present, and were not presented to the entire Membership until the beginning of June. This kept most developing countries and LDCs from participating effectively and promoting proposals of interest to them, and from resisting proposals and language inimical to their interests. Another strategy is the use of issues that have a strong moral overtone across the WTO negotiations in general and in the context of MC12 in particular. These include issues such as gender, environment, human rights and sustainability, WFP and so on. It is difficult to resist discussion of these issues or question their framing as they are pitched on moral high ground. However, most often these issues are framed in such a manner as to set the stage for incrementally securing commercial advantage and market access for the proponents, rather than actually taking a comprehensive and balanced look at the issue. For example, ‘environment and trade’ discussions are pitched to set standards for developing countries, thereby constraining their export and domestic markets, undermining their productive capacity and production of certain goods and services. But there will never be any provision to assess, for example, the impact of foreign direct investment from developed countries on resource grabs and environmental conservation efforts in the Global South. Developing countries need to be able to resist such imbalanced discussions without feeling defensive about it. These are areas where the developed countries already enjoy some advantages. If developed countries are truly committed to these causes, they should provide developing countries with the finance, technology and capacity-building tools to address these issues and must also uphold the principle of ‘common but differentiated responsibilities’ (CBDR) among developed and developing countries. However, there is always major resistance towards advancing such tools and towards operationalising CBDR. Overall, the key mandates on agriculture and food security important for developing countries and LDCs still remain undelivered. It will require significant engagement and commitment from the Membership to meet these mandates and deliver critical policy tools. A lot of work remains ahead for developing countries and LDCs including ensuring outcomes on the permanent solution on PSH, SSM, cotton, as well as disciplines on domestic support that integrate effective S&DT. In addition, they need to ensure that the dedicated work programme on NFIDCs and LDCs promised under paragraph 8 of the Food Insecurity Declaration to further expand and revitalise the implementation of the NFIDC Decision of 1994 actually delivers useful and additional policy tools for them. Ranja Sengupta is a senior researcher with the Third World Network. Endnotes 1.
For a more detailed analysis, see Sengupta, Ranja (2022): ‘Agriculture
and Food Security Negotiations Text at WTO MC12: Implications for
Developing Countries’, TWN Briefing Paper, June, https://twn.my/title2/briefing_papers/MC12/briefings/Agriculture *Third World Resurgence No. 351, 2022, pp 25-28 |
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