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South Stress on Public Stockholding, SSM, S&D, Development

The article below was published in South-North Development Monitor (SUNS) #8410,
27 February 2017.

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South stress on public stockholding, SSM, S&D, development

Geneva, 24 Feb (Kanaga Raja) -- Many developing countries stressed the importance of outcomes, amongst others, on the issues of public stockholding for food security purposes and on the Special Safeguard Mechanism (SSM) at MC11 in Buenos Aires later this year.

Voicing their views at an informal Heads of Delegation (HOD) meeting at the WTO on Thursday, they also highlighted the importance of the development dimension, special and differential treatment (S&D), the need to address trade-distorting domestic support in agriculture in particular on cotton, and on fisheries subsidies.

Many developing countries also called for a transparent and inclusive process in the run-up to the ministerial conference in Buenos Aires.

The views of the developing countries came following an assessment by Director-General Roberto Azevedo on the current state-of-play in the negotiations in the various negotiating groups in the lead up to Buenos Aires.

At the meeting, India reportedly critiqued the manner in which the negotiating process is "vitiated" by pushing certain issues by some members together with the WTO Secretariat (please see separate article titled "WTO secretariat & DG reproached for vitiating negotiating climate".)

The United States, meanwhile, told the meeting that it is not in a position to speak in detail on account of the current political transition.

What it has said last year with respect to ensuring that there was no sense of over-expectation for MC11, is something that it will probably continue to say, the US said.

It also said that the US is likely to remain supportive of an open and market oriented global economy and that it is also very likely to seek some very close examination of the way in which disputes are being handled.

According to trade officials, at the informal HOD meeting, Cambodia, on behalf of Least Developed Countries (LDCs), highlighted as key the issues of trade-distorting domestic support in agriculture, including on cotton, fisheries subsidies, especially overcapacity, overfishing and IUU (illegal, unreported and unregulated) fishing and a ban on those kinds of subsidies.

It also highlighted the importance of special and differential treatment (S&D), implementing the Nairobi decision on rules of origin, and the need for an agreement on duty-free quota-free market access (DFQF) for LDC products. Rules of origin are as important to the LDCs as DFQF, it said.

Morocco, on behalf of the African Group, highlighted several issues of importance to the Group, including trade-distorting domestic support, the Special Safeguard Mechanism (SSM), public stockholding for food security purposes, fisheries subsidies, and S&D.

There is need to achieve tangible progress, and there is also need to continue to follow the mandates, said Morocco, adding that it intends to organise a meeting in Marrakech shortly before MC11.

Guyana, on behalf of the African, Caribbean and Pacific (ACP) countries, strongly affirmed the importance of the development dimension, the Doha Development Agenda (DDA), S&D, and reduction in trade-distorting domestic support.

It wanted a clear framework for the gradual elimination of trade-distorting domestic support, and it hoped to have this framework on the table by the summer break.

It also expressed support for the proposals on public stockholding for food security purposes and the SSM, and was in favour of the proposals on fisheries subsidies, but added that there must be S&D that takes into account the importance of fishing in developing countries and ACP members.

The ACP group also wanted flexibility for developing countries on services. On e-commerce, it is prepared to continue to explore this issue, particularly the development dimension.

It further wants to see a transparent and inclusive process.

Fiji, on behalf of the Pacific Group, said it wants to see tangible and meaningful outcomes in Buenos Aires. The development dimension is important. For the group, fisheries subsidies is of crucial importance, because of its importance to the livelihood of people in this region.

It would like a multilateral outcome in this area. It needs to be something that builds on the Doha mandate and SDG Target 14.6.

[SDG Target 14.6 states: By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation.]

On the issue of agriculture, Fiji highlighted the issue of trade-distorting domestic support, as well as flexibility for developing countries.

It also wants to see a process that is transparent and inclusive.

Saudi Arabia, on behalf of the Arab Group, said that it is important to build on the Bali and Nairobi outcomes, and to keep the development dimension at the centre.

(An article on the statements of various delegations at the informal HOD meeting will appear in a forthcoming issue of SUNS.)

According to trade officials, in his report at the informal HOD meeting, Director-General Azevedo said 2017 is an important year as members prepare for MC11.

It is good to know that we are getting off to a good start, he said, noting that on 23 January 2017, the TRIPS amendment on access to essential medicines entered into force, and on 22 February 2017, the Trade Facilitation Agreement came into force.

He also mentioned his trip to Davos, as well as to France, Senegal and India, saying that the conversations in those countries were very constructive.

He pointed to a lot of activity taking place in Geneva, and said that his role as Director-General and Chair of the Trade Negotiations Committee (TNC) was running in parallel and complementary to the work of the Chairs (of the various negotiating groups).

Azevedo maintained that the Chairs were the main engines for moving the process, but that at the end of the day the progress was down to the members. The DG and the Chairs can facilitate but the onus was on the proponents to get the traction and convergence behind their issues, he said.

Azevedo mentioned the series of meetings that he had at the beginning of this month, with the General Council Chair and the ambassador of Argentina, the host of MC11, being present at these meetings.

On the issue of services, the DG reported that the discussion has centred on (proposals on) domestic regulation, and a services trade facilitation agreement, of which India is the proponent.

He indicated that there was a significant overlap between the two proposals, although they also differed in terms of their depth and breadth, and indeed their level of maturity.

Both have been positively reviewed by the membership. They have been received quite well. But more work was needed to better appreciate where members were going on this, he said.

On domestic regulation, the DG said other elements also need to be tabled soon so that members can appreciate the entire possible package that might be something that could be agreed before, at or after MC11.

According to trade officials, on services trade facilitation, the DG said that more specificity is required.

On these issues, there is good dynamic but there needs to be more engagement and those who are not on board need to be persuaded, he said.

On development, Azevedo said that the problem here is that on the question of LDC issues and Special and Differential Treatment (S&D)-specific issues, no new proposals have been forthcoming.

He noted that the proponents of these issues said that they are looking to submit revised and realistic proposals soon.

On the LDC issues, the key issue here is the implementation of the decisions taken in Bali and Nairobi.

On fisheries subsidies, the DG reported that there are four proposals on the table, which do not wholly align, and at present there are also two different processes taking place - a multilateral approach and a plurilateral approach. There are members in both of these camps.

The proponents have said that they would like an outcome on fisheries subsidies at MC11, and that this is a priority for them. Some have referred to SDG Target 14.6.

According to the DG, the proponents hope for progress without what they would refer to as unnecessary linkages and they think it should be something that should be addressed on its own merits.

All proponents expressed a preference for a multilateral approach, but that the plurilateral approach could be a helpful means of showing the way forward.

The issue here is how to convince those who are not yet supportive to back this initiative with more energy, said the DG.

On S&D, all are in favour of this, but the question is the difficultly on the blanket carve-out for commitments. Everyone concedes as well that the LDCs are the most vulnerable and that technical assistance will be needed.

According to trade officials, on e-commerce, the DG noted that there have been eleven submissions put forward, with a broad range of ideas and approaches. Some are detailed while others are general. There is also some overlap.

But the issue here is how to take these issues up, said the DG. For MC11, some have said that an outcome on e-commerce could be a deliverable, and it could also be an opportunity to take stock.

Some have said that they would like the moratorium (on e-commerce duties) to be extended for two more years or made permanent.

Others were of the view that the ministerial conference might be a chance to reflect and build a more forward looking agenda on a work programme. Others are more cautious (citing the digital divide or the need to focus on the remaining Doha issues).

On the process, the DG said that the lack of a locus for the discussions is a reality. It is very important to take every opportunity to discuss in a bottom-up way how this issue might move forward.

On agriculture, in particular on public stockholding for food security purposes, the DG said that there is a clear mandate to find a permanent solution by MC11. We really need to work on this and it is something that is very important, he said.

The members have put forward their usual positions on this issue so there has not been much progress. It is for the proponents to try and energise the process and find a way forward, the DG maintained.

He also noted that many members have said that domestic support in agriculture and cotton in particular are high priorities for MC11.

The Special Safeguard Mechanism (SSM) has been emphasised by some but others say that there are a number of issues that remain to be resolved before this can be taken up in any meaningful way.

On the issue of export restrictions, the DG said Singapore has put forward a proposal and this has attracted "wide support."

Many see all of the agriculture issues as fundamental and must be part of any outcome for MC11, said Azevedo.

The DG said that in all areas, we still have a long way to go. There is a huge amount of work that we have to do if we are to arrive at concrete outcomes and we only have eight months to go until MC11.

He further said that the proponents need to further intensify their engagement with other members. Many are doing so but we need to move quickly. We need proposals as soon as possible.

The time is approaching where we need to transition from conceptual and general discussions to much more specific and pointed elements, and we hope to be in this position by the summer break, he added.

The DG said that it is important to understand that MC11 is not the end of the road. We can move incrementally. We can deliver at Buenos Aires on some things and then we can continue our work and deliver on other things at a later stage.

But the key here is to be pragmatic, flexible and open-minded. The key is to make sure that development is a key element of any outcome. And that it is very important that there is continued engagement from capitals in this process, said Azevedo. +