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Re: Developed nations stonewall on food security

The article below was published in South-North Development Monitor (SUNS) #8007,
22 April 2015.

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Developed nations stonewall on food security

Geneva, 21 Apr (D. Ravi Kanth) -- Major developed countries last Friday (17 April) gave short shrift to a proposal from the G-33 developing country coalition that offered credible options for creating "policy space" in the proposed permanent solution for public stockholding programmes for food security purposes in the developing countries, several trade envoys told SUNS.

The United States, the European Union, Canada, Australia, and Norway along with Pakistan, Paraguay, Thailand, and Colombia adopted stonewalling tactics by avoiding to address the elements proposed by the G-33 farm coalition in their proposal.

The chair of the Doha agriculture negotiations, Ambassador John Adank of New Zealand, had convened a meeting of select trade envoys on April 17 to discuss various issues concerning the disciplines to be included in the mandated permanent solution for public stockholding programmes for food security by end of this year.

Members who were present at the meeting included the United States, the European Union, Canada, Australia, Norway, New Zealand, China, India, Indonesia, Brazil, the Philippines, Barbados (representing the ACP coalition), Lesotho on behalf of African countries, Pakistan, Paraguay, Thailand, and Colombia.

Ahead of the meeting, the chair had posed several questions to the participants. These include "what forms can members envisage for a permanent solution" in terms of new rules that would increase "policy space" to a defined degree subject to various conditions.

Ambassador Adank sought to know "whether the permanent solution be more like a permanent mechanism that would respond to a particular situation that might emerge in an individual developing country?"

The chair also asked how to address the "unintended consequences" that would arise from the G-33 proposal which was submitted last year. Ambassador Adank wanted to know "what kind of alternative approaches to treatment within the Green Box could be considered?"

Lastly, the chair asked "what are the kinds of safeguards that members would see as important for any permanent solution" and "whether the safeguards in the interim solution/peace clause assist in this regard and if so, how might they be utilized for the permanent solution."

In response to the chair's questions, Indonesia, which coordinates the G-33 coalition in which India, China, the Philippines, Kenya, Zimbabwe, Venezuela, Bolivia, and Cuba among others are members, made a detailed statement.

Ambassador Iman Pambagyo of Indonesia rejected the US' proposal "on the proposed Elements for Discussion on Public Stockholding for Food Security" and pointed out that the proposal goes beyond finding a permanent solution to the proposal on the Public Stockholding for Food Security Purposes, as mandated by trade ministers at the WTO's ninth ministerial conference in Bali, Indonesia, in December 2013.

The Bali mandate, which was further modified last year after India and the US had reached an understanding, calls on WTO members to negotiate "a permanent solution on the issues of public stockholding for food security purposes" by 31 December 2015.

The US proposal now calls for a review of "the efficacy and trade effects of the existing public stockholding programs for food security policies." The US wants "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 for capacity building to implement the agreed best practices."

Indonesia said the G-33 "would like to make it clear that we tabled the proposal not because we have limited capacities to adopt best practices in this area but, rather, because we need some policy space to effectively support low-income or resource-poor farmers, to fight hunger and rural poverty."

"What we are seeking are specific inputs or suggestions on how the Group could help [in] addressing some concerns and objections by some Members to the Group's [G-33] proposal," but not extraneous comments, the Indonesian ambassador said.

The G-33 proposal offered three alternatives for constructing the permanent solution. First, adding a new paragraph to the government services programmes in the green box disciplines of the WTO's Agreement on Agriculture (AoA) on public stockholding programmes for food security.

Second, the G-33 suggested modifying the existing rules to ensure that the acquisition of food stocks by developing countries to support low-income, resource-poor producers is not required to be calculated under the AMS in the amber box measures.

And third, it called for modifying and amending the rules to calculate subsidies based on the so-called external reference period 1986-88.

"General comments or utter rejections certainly will not help us to arrive at a permanent solution as mandated by our Ministers," Indonesia told its counterparts from the developed world.

The G-33, said Indonesia, wants "amended rules which will allow us some policy space to acquire stocks from low-income or resource-poor producers, and to fight hunger and rural poverty."

"We are not talking about a permanent mechanism to respond to a particular situation that might emerge in a developing country," Indonesia told the chair, while dismissing the criticism from Canada that public stockholding programmes for food security will lead to import substitution.

"Any agriculture policy which is aimed at increasing efficiency in domestic production, even if they are undertaken within the minimally trade-distorting scheme, will always create import substitution effects," Indonesia said, according to participants familiar with the discussion.

As regards the repeated criticism from the EU and other developed countries that market price support cannot be transferred to the Green Box, Indonesia reminded them that the elements proposed in the G-33 proposal "are already contained in the Annex 2 [of the Agreement on Agriculture] that concerns The Basis for Exemption from The Reduction Commitments (the Green Box)."

Indonesia said the G-33 wants the discussions on finding a permanent solution to the proposal on Public Stockholding for Food Security Purposes to be undertaken independently of discussions on the domestic support pillar of the Agreement on Agriculture.

After the detailed statement from Indonesia, the US maintained that the task before members is to open markets and ensure food security for all, said a participant familiar with the meeting.

Despite two-and-a-half years of intense negotiations on the need for a permanent solution for public stockholding programmes for food security, the US claimed that it is lacking an understanding of the nature of the problem.

The US said it wants to know how the current AoA which was based on the Uruguay Round agreement does not provide policy space.

[The Doha Round was launched primarily to address the anomalies in the AoA that was based on the specific understandings between the US and the EU in the Blair House Agreement in November 1992.]

Pakistan, which has vociferously supported the US on the discussion on public stockholding programmes during the last two-and-a-half years, said members must not promote stockholding programmes as such schemes would distort trade.

Any further policy space as demanded by the G-33 will reduce "policy space of WTO," Pakistan argued. The US proposal is a good starting point, Pakistan emphasized.

The EU said the US proposal to study public stockholding programmes ensures the profound need to understand the issue.

The EU is a major user of the Green Box and Blue Box measures that are found to be trade-distorting.

However, it categorically ruled out that the permanent solution for public stockholding programmes "cannot be found in Green Box."

"We can talk of Green Box or the entire AoA but this will not lead to a permanent solution," the EU warned.

Canada said the G-33 proposal poses difficulties both "on the front and the back end" because on the front end it leads to increased purchases to satisfy the hunger of the producers while the distribution on the back end will lead to "export surges and import substitution."

Australia said it is concerned about "the integrity of Green Box and exports from public stocks". While claiming that it is committed to a permanent solution, Australia said the G-33 proposal is seeking "more policy space for trade-distorting support." The distorting support should not undermine international markets, according to Australia.

Norway, while acknowledging the need for the permanent solution, maintained that the Green Box is difficult.

Thailand, Paraguay, and Colombia pressed for strong safeguards and predictability because of unintended consequences.

In sharp response to concerted criticisms from major industrialized countries and their allies in the South, India maintained that the small and resource-poor farmers are unable to play their role due to an imperfect market.

Consequently, those farmers in the developing world need support from the front end, India said. As regards the back end, India said the Public Distribution System is feeding 800 million people. Public stockholding and market price support are crucial for the continuation of agriculture on which resource-poor farmers depend for their survival, India said.

Brazil said it would support domestic policies for food security.

In a nutshell, the intransigent positions adopted by the developed countries are a clear signal that the G-33 and its members can forget a permanent solution with credible disciplines by the end of this year.

"There is no way that the US will allow any change in the AoA which helps Washington to continue with its trade-distorting farm support programmes," said a former trade envoy from an industrialized country. +