countries turn their backs on permanent solution for PSH
Published in SUNS #8759 dated 25 September 2018
Geneva, 24 Sep (D. Ravi Kanth) -- Major developed countries on Friday
turned their backs on the mandated permanent solution for public stockholding
(PSH) programs for food security at the World Trade Organization,
insisting that developing countries must first prove that they need
such an instrument, trade envoys told SUNS.
Close on the heels of their concerted campaign to do away with special
and differential flexibilities for developing countries, several major
developed countries led by Australia on Friday asked the developing
countries to prove why they would need the mandated permanent solution
for public stockholding programs for food security, trade envoys told
Australia, joined by Brazil, which has already electrocuted the G-20
developing country coalition for fighting the continued inequities
and asymmetries in the WTO's Agreement on Agriculture (AoA) based
on the Uruguay Round negotiations, argued that the special and differential
flexibilities in the AoA under Article 6.2 formed part of what is
called "trade and production distorting subsidies".
These two developments marked the proceedings at the Doha agriculture
negotiating body meeting at the WTO on 20-21 September.
China, India, South Africa, and Indonesia among others severely opposed
the new "evangelical" positions of the major developed countries
for concluding the permanent solution for public stockholding programs
for food security by the WTO's 12th ministerial conference in Astana,
Kazakhstan (to be held in 2020), said trade envoys familiar with the
The permanent solution for PSH programs ought to have been concluded
by the eleventh ministerial meeting in Buenos Aires, Argentina, last
But the US had pulled the plug on the draft agriculture outcome prepared
by the chair Ms Amina Mohamed, then Kenya's permanent secretary for
foreign affairs. Subsequently, the outcome on the permanent solution
for PSH contained in the Chair's draft remained unresolved.
On Friday (21 September), the chair for the Doha agriculture negotiations,
Ambassador John Deep Ford of Guyana, convened the special session
to discuss the permanent solution for the public stockholding programs
for food security.
During the meeting, several major developed countries as well as farm
exporting countries led by Australia, Canada, and Paraguay among others
objected to negotiating the permanent solution as mandated by trade
ministers at the WTO's tenth ministerial meeting in Nairobi, Kenya,
in December 2015, said participants familiar with the meeting.
In a unified position, the developed countries said that members seeking
the permanent solution for public stockholding programs for food security
must justify why they need it.
After almost four years of to-and-fro negotiations that began at the
WTO's ninth ministerial meeting in Bali, Indonesia, and further clarified
by the WTO's General Council decision, the opponents now struck a
diametrically-opposite position, saying that there is no need for
the permanent solution unless those wanting it must first justify/prove
why they would need such an instrument, said a participant after the
The position adopted by Australia and others reflected what the European
Union and Canada proposed in their separate proposals for bringing
new rules for availing special and differential flexibilities for
all developing countries, including the case-by-case justification
as outlined by the EU in its concept paper, the participant said.
India, China, and South Africa among others flatly rejected the position
adopted by the major developed countries for negotiating the permanent
solution as required by the Nairobi ministerial mandate.
It is a telling commentary on the developments at the WTO, that addressing
hunger, which requires a permanent solution for the public stockholding
programs in the developing and poorest countries, is not important
as compared to negotiating binding disciplines for fisheries subsidies
as demanded by the US and a group of countries called the "Friends
of Fish", said a trade envoy, who asked not to be quoted.
During the meeting on domestic support, Australia, Brazil, and other
members of the Cairns Group of farm exporting countries turned the
tables by proposing a new definition for "trade and production
distorting subsidies" that does not exist in the WTO's rule book.
In a paper (Job/Ag/138) on "domestic support in the WTO Agreement
on Agriculture" circulated on 5 July, Australia along with Canada,
New Zealand, Argentina, Guatemala, Paraguay, Peru and Uruguay argued
that there is a sea change in the domestic support spending programs
since the launch of the Doha trade negotiations in 2001.
By clubbing various support programs availed by members under Article
6 of the Agreement on Agriculture, Australia and its allies argued
that trade and production distorting domestic support under Article
6 of the AoA relative to the value of production is decreasing for
"Brazil, Canada, the European Union and the United States".
"Since 2001, in nominal terms, several developing Members such
as India, China, Indonesia, and Brazil recorded large increases in
spending in this category, while developed Members such as the US
and the EU have significantly reduced their use," Australia and
its allies maintained.
"The list of the main users of Article 6 has significantly evolved
since 2001. In 2001, the top five users were, in order, the EU, the
US, India, Japan and Norway. In 2010, the top five largest users were,
in order, India, China, the EU, Japan and the US," the Australian
joint paper argued.
Targeting the special and differential treatment flexibility in Article
6.2, which is available to 124 developing countries, the sponsors
of the Job document maintained that "much of this support is
concentrated to only a few members" such as India ($24.8 billion),
Brazil ($1.8 billion), Thailand ($1.2 billion), and Korea ($1 billion)
Australia, however, did not say a word about the manner in which the
EU and the US resorted to box-shifting of tens of billions of trade-distorting
subsidies to what is called the green box programmes, which are currently
exempted under the Agreement on Agriculture (AoA) rules, said a trade
envoy, requesting anonymity.
"After the Doha Round of trade negotiations began in 2001, the
EU and the US have shifted more than $100 billion [in] trade-distorting
subsidies to the green box."
The Doha Round is nearly put to bed by the US, the EU, Australia,
and other countries, the envoy added.
Clearly targeting India, China, and Indonesia, among others, Australia
and its allies chose to include support for investment and input subsidies
which is permitted under the AoA in the "trade and production
Governments in developing countries are allowed to provide input subsidies
that are "exempt from domestic support reduction commitments
that would otherwise be applicable to such measures", under Article
6.2 of the AoA.
Over the past four years, the US has been campaigning for removing
the Article 6.2 exemption, which provides special and differential
flexibility aimed at assisting the resource-poor farmers in India
and other developing countries.
But several countries led by India had fiercely opposed the US demand,
saying that under no circumstance will they allow attempts to do away
with the exemptions under Article 6.2, said several trade envoys,
who asked not to be identified.
Taking a cue from the US, its closest trade ally Australia, along
with other members, has now intensified the campaign against India,
China, and other developing countries, which have hundreds of millions
of resource-poor farmers with less than $200 per capita support as
compared to about $50,000 in the US.
At the special negotiating session on Thursday, India's trade envoy
J. S. Deepak flatly rejected the Australian proposal, saying it was
based on dubious grounds.
He argued that the per-capita farm support that farmers receive in
India was much lower in comparison to the levels of support in industrialized
Several countries, including China, South Africa, Indonesia, and the
Philippines, supported India in rejecting the Australian proposal.
The US, however, welcomed Australia's move, saying that it has repeatedly
raised this issue.
The US had also filed a counter-notification against India's subsidies
to rice and wheat, saying they breached New Delhi's de minimis commitments,
a charge India had categorically dismissed.
Besides, Australia and its allies, who had argued in the past for
negotiating new disciplines for green box subsidies which were found
to be trade-distorting in the US upland cotton dispute, remained silent
about the need to look into the green box subsidies.
In conclusion, it seems there is a new diabolical wave to eliminate
the special and differential flexibilities and the consensus principle
at the global trade body by the countries of the North.
Even though some developing countries are part of this new diabolical
wave, it is clear that the countries of the North seem determined
to achieve their goal in an attempt to appease the US.
[The Uruguay Round accords are a single undertaking, both in terms
of the Punta del Este declaration and everyone signing on to all agreements
at Marrakesh. Now, if the US, EU and other industrialised countries
want to go back on some parts, then in terms of international law,
there is no reason for China, India, South Africa etc to abide by
the TRIPS Agreement, or other such accords. It is time they make it
clear at the WTO and in other fora. - SUNS] +