Security - PSH a priority, but several caveats need solutions
Published in SUNS #8528 dated 11 September 2017
Geneva, 6 Sep (D. Ravi Kanth) -- The chair for Doha agriculture negotiations,
Ambassador Stephen Karau of Kenya, has said that the permanent solution
for public stockholding programs for food security purposes (PSH)
in developing countries remains "a priority issue" for the
World Trade Organization's eleventh ministerial meeting in Buenos
Aires beginning on 10 December.
However, he listed several caveats such as country coverage, product
coverage, program coverage, safeguards and anti-circumvention provisions,
and transparency provisions that need to be resolved before arriving
at the "legal shield" for the mandated permanent solution
for PSH programs.
In his 11-page restricted Job/Ag/109 document on the "state of
play in the agriculture negotiations" issued on Tuesday, Ambassador
Karau - who draws his mandate for overseeing the agriculture negotiations
from the 2001 Doha Work Program - did not even mention the progress
made on the three pillars - domestic support, market access, and export
competition - in the Doha agriculture negotiations, including the
2008 revised draft modalities.
In the section on domestic support, he said, "it should also
[be] acknowledged [that] several Members would still prefer an outcome
in Domestic Support based on the provisions of the latest draft modalities
[the 2008 revised draft modalities]."
As regards the outcomes on domestic support, Karau merely listed several
proposals made by members with varying levels of ambition, including
the proposal by China and India for the elimination of Aggregate Measurement
of Support (AMS) or the most trade-distorting amber box subsidies.
He avoided suggesting that an outcome on domestic support will remain
a priority issue like the permanent solution for PSH.
On cotton, Karau said "most members support a meaningful and
specific outcome on Cotton Domestic Support, but a couple of delegations
have cast doubts about the possibility of achieving an outcome at
MC11 [eleventh ministerial conference in Buenos Aires] taking the
overall negotiating environment."
Effectively, he thus suggested that an outcome on reducing domestic
subsidies for cotton in the United States and the European Union is
unlikely at the Buenos Aires meeting because of the "overall
Commenting on the special safeguard mechanism (SSM) demanded by the
G33 group of developing countries, the chair stated positions of various
members, including a demand from a few members who said "the
only feasible outcome on SSM at MC11 would be a decision on the continuation
of SSM negotiations post MC11."
The chair said his document "is intended to assist members in
preparation of future discussions in the lead up to the Eleventh Session
of the Ministerial conference."
The document is "a supporting tool to help Members assess in
a structured way what may realistically be expected as possible outcomes
at MC11 and what remains to be done to incrementally develop options
likely to attract consensus among the Membership," the chair
In short, the chair has prioritized issues even before discussing
all the proposals made by members in the domestic support, including
the elimination of AMS by developed countries.
As regards the permanent solution for PSH programs, he said there
are two proposals - one by the EU and Brazil along with Colombia,
Peru, and Uruguay, and the second proposal submitted by the G33 group
of developing countries led by Indonesia.
Ambassador Karau said "the two proposals on the table suggest
exempting the support provided under public stockholding programmes
from the Aggregate Measurement of Support (AMS) calculation."
However, he said "the attached conditions [in the two proposals]
The chair mentioned that "several Members have expressed their
opposition to the idea of an unlimited exemption."
"There seems to be nevertheless a convergence of views on some
key elements to be included in the solution, such as safeguards and
transparency requirements," he emphasized.
But, "the scope and content of these elements are yet to be agreed
upon," the chair said, arguing that "many other elements
would also require an agreement such as the country coverage, product
coverage, and programme coverage."
The chair listed the views expressed by members in respect of the
"core provision" of the PSH.
The views include:
i. exempting the support provided under PSH programmes for food security
purposes from the AMS calculation (as proposed by the G33);
ii. exempting this support from both AMS calculation and a new overall
limit to Trade-Distorting Domestic Support (as proposed by the EU
iii. exempting certain programmes from the AMS calculation; and providing
a legal shield against challenges under the Agreement on Agriculture.
In addition, a few Members have suggested updating the reference prices.
Significantly, the chair did not mention about an amendment to be
incorporated into the Agreement on Agriculture for creating a new
annex as proposed by the G33 in the run-up to the Nairobi ministerial
meeting in December 2015.
The chair said there are divergences on country coverage between the
Brazil and the EU, for example, suggested three categories of members
to be eligible for the coverage.
They include (i) Least Developed Countries (LDCs), (ii) any developing
country Member if the value of the stocks procured does not exceed
a certain threshold of the average value of production (VoP); and
(iii) Members with existing programmes (at the time of the Bali Ministerial
Decision) in respect of support provided under these programmes, provided
the requirements of the Bali Ministerial Decision (BMD) are fulfilled.
The G33 called for "a wider coverage that would include all developing
country Members and LDCs."
Without naming the country, the chair said "one Member has suggested
limiting the coverage to net importers of relevant products with a
volume of production that does not exceed a certain level."
There are also differing views on product coverage "ranging from
the BMD [Bali Ministerial Decision] to major staple foods or major
diet staple crops only (e. g. wheat and rice), and to "wider"
product coverage," the chair said.
On program coverage, the chair said "views range from programmes
existing at the time of the BMD, to new programmes implemented by
LDCs and other developing country Members with a low share in international
markets and to all programmes ("existing" and "new")."
Some members even suggested "that in the case of new programmes,
the support should be limited," the chair said.
The G33 called for "coverage of programmes for the acquisition
of foodstuffs at administered prices by Governments with the objective
of supporting low income or resource poor producers, and programmes
for the acquisition of foodstuffs at administered prices and their
subsequent distribution at subsidized prices with the objective of
meeting food security requirements of urban and rural poor, and of
maintaining adequate availability of foodstuffs and/or ensuring food
Additionally, according to the chair, "some Members have suggested
that the permanent solution should apply only to non-commercial activities,
including ensuring that stocks are constituted for a bona fide food
assistance programme only or only to support rural development and
for the benefits of resource poor farmers."
Some members suggested "that significant exporters should be
excluded and that the eligibility of a Member should be forfeited
should exports from stocks take place," the chair said.
Without listing countries that called for safeguards and anti-circumvention
provisions, the chair misleadingly said "many Members seem to
be of the view that safeguards are needed to ensure that the stocks
do not distort trade or adversely affect the food security of other
Except for the US, Australia, Pakistan, Paraguay, and a couple of
other countries who called for strong safeguard and anti-circumvention
provisions, a large majority of developing and least developed countries
have said repeatedly that the proposed permanent solution should not
be burdened with conditionalities.
The chair admitted that "views differ on how these safeguards
should be formulated" as "some Members see the safeguards
in the BMD as a necessary minimum, while others have asked for "strengthened"
The G33 called for "more functional" safeguards than those
contained in the BMD.
"It was also suggested that neither direct exports nor any release
from stocks on the condition it should be exported should be allowed,"
the chair said.
"Several Members have called for a general prohibition on exports
- both direct and indirect," Ambassador Karau argued.
"Others have also called for price or volume-based safeguards,
and a cap on the support expressed as a percentage of the VoP of the
product in question or otherwise," the chair mentioned.
On transparency provisions, the chair said "several Members are
of the view that the transparency provisions in the BMD are a necessary
One proposal, according to the chair, includes transparency provisions
as well as "a notification of the VoP [value of production] and
value of acquired stock prior to the implementation of the PSH programme
as well as on an annual basis."
The G33 suggested "a narrower set of transparency requirements
that include information on the programme and description of its functioning
and statistical information on domestic activities, and on exports
The Cairns group of countries led by Australia also "suggested
including a mandatory notification of the targets, and data demonstrating
that PSH programmes are not distorting trade or commercial markets."
"Several Members have called for "additional information"
on the programmes, without however giving details on the information
sought," the chair said.
But, "many developing country Members have cautioned against
cumbersome requirements such as ex ante notification obligations,"
the chair admitted.
Some members also suggested holding an annual dedicated discussion
based on available data and with the assistance by the Secretariat
for examining the PSH programmes in the dedicated discussions on an
annual basis, as well as reviewing or assessing the situation by the
Committee on Agriculture (CoA), the chair said.
Surprisingly, these stringent transparency provisions are not even
remotely suggested for examining over USD 200 billion green box programs
in the United States and the European Union that are found to be distorting
global trade, according to several analysts.
In crux, the proposed permanent solution for PSH programs is going
to contain conditions that would make it almost un-implementable.
Also, there is no guarantee that it will involve an amendment to the
Agreement on Agriculture like the creation of a brand new agreement
on Trade Facilitation in the WTO's rulebook.
The developing and poorest countries must ensure that they secure
a credible and effective legal instrument for PSH programs at Buenos
Aires than falling prey to an outcome replete with conditions. +