Agriculture talks in disarray over assault on development, S&DT issues
Published in SUNS #9282 dated 10 February 2021

Geneva, 9 Feb (D. Ravi Kanth) – The Doha agriculture negotiations at the WTO appear to be in disarray due to a fresh assault on the core developmental issues being raised by developing countries as well as on the special and differential treatment (S&DT) in Article 6.2 of the Agreement on Agriculture (AoA), negotiators told the SUNS.

In an apparent attempt to erase the Doha Development Agenda (DDA) mandate on agriculture and 20 years of negotiating work conducted by the successive chairs of the Doha agriculture negotiations, the Cairns Group of farm exporting countries is now targeting the de minimis subsidies being provided by the developing countries and Article 6.2 of the AoA without addressing the AMS (aggregate measurement of support or the most trade-distorting farm subsidies) provided by the major farm subsidizers all these years, said negotiators familiar with the development.

With the new chair of the Doha agriculture negotiations, Ambassador Gloria Abraham Peralta from Costa Rica, and the facilitators, seemingly having little institutional knowledge in conducting the negotiations, there is “utter chaos” in addressing the outstanding issues in the three pillars – trade-distorting domestic support, market access and export competition, according to the negotiators, who asked not to be quoted.

Apparently, the chair and facilitators are not pursuing issues as per the original DDA mandate that was clarified in the July 2004 framework agreement, the 2005 Hong Kong Ministerial Declaration, and the 2008 revised draft agriculture modalities, the negotiators said.

Without addressing the mandated issues in a holistic manner, the chair and the facilitators are jumping from one issue to the other and targeting non-mandated issues such as the de minimis subsidies provided by developing countries and special and differential treatment as set out in Article 6.2 of the AoA, the negotiators added.

The prospects for arriving at any outcomes in the Doha agriculture negotiations at the WTO’s 12th ministerial conference (MC12) that is likely to be held in Geneva in December, appear bleak due to unbridgeable differences, the negotiators said.

During a day-long meeting of the Doha agriculture negotiating body on 5 February, a large majority of developing countries – China, India, Egypt on behalf of the African Group, Jamaica on behalf of the ACP (Africa, Caribbean, and Pacific) group, and Nigeria among others – demanded the immediate resolution of the mandated issues such as the permanent solution for public stockholding programs for food security and the special safeguard mechanism for developing countries, according to the negotiators, who made their interventions in the meeting.

In sharp contrast, the Cairns Group led by Australia and Brazil sought to change the negotiating framework to issues such as curtailing the de minimis entitlements in Article 6.4 of the AoA and special and differential treatment allowed for developing countries in Article 6.2 of the AoA.

The de minimis entitlements in Article 6.4 (b) allow developing countries to incur up to 10 percent in subsidies in their domestic support commitments.

Article 6.2 of the AoA states: “In accordance with the Mid-Term Review Agreement that government measures of assistance, whether direct or indirect, to encourage agricultural and rural development are an integral part of the development programmes of developing countries, investment subsidies which are generally available to agriculture in developing country Members and agricultural input subsidies generally available to low-income or resource-poor producers in developing country Members shall be exempt from domestic support reduction commitments that would otherwise be applicable to such measures, as shall domestic support to producers in developing country Members to encourage diversification from growing illicit narcotic crops. Domestic support meeting the criteria of this paragraph shall not be required to be included in a Member’s calculation of its Current Total AMS.”

The assault on special and differential treatment for the developing countries began in 2015, when the former US trade envoy Ambassador Michael Punke proposed the elimination of S&DT at a small group meeting, said a former trade envoy, who asked not to be quoted.

That proposal of the US is now being advanced by the Cairns Group led by Australia and Brazil among others, the envoy said.

At the meeting on 5 February, many developing countries said the biggest element of imbalance is the AMS (aggregate measurement of support) and not the de minimis as highlighted by Costa Rica, which is a Cairns Group member, said participants familiar with the meeting.

In a similar vein, the report presented by the three facilitators – Mr Greg Macdonald from Canada, Ms Elisa Olmeda from Mexico, and Ms Fenny Maharani from Indonesia – revealed sharp differences among members on what needs to be addressed.

Costa Rica, for example, made a presentation on 4 February suggesting the need to address de minimis subsidies provided by members as well as issues concerning Article 6.2 of the AoA dealing with special and differential treatment in line with the proportionality principle.

However, China criticized the proportionality principle, saying that it is a “de facto punishment for members with large populations and large small-scale farmers.”

Nigeria said the proportionality principle is already contained in the de minimis rules as a function of the AoA, suggesting that any attempt to push this issue must be determined in per capita terms with the number of farmers, said negotiators, who took part in the meeting.

India called for addressing the trust deficit first and resolving the outstanding concerns about the continuation of the AMS being availed of by the major subsidizers such as the US, the EU, Japan, Norway, and Switzerland among others.

Brazil spoke about the need to fight “side by side” and allow flexibility on the domestic support issue, and also suggested the need to reduce global trade distortion entitlements by 50 percent.

It reversed its historical role of championing the G20 coalition, which had developed a framework for reducing the overall trade-distorting support of the developed and developing countries, saying that it will now align its interests with the Cairns Group of farm exporting countries, said a negotiator, who asked not to be quoted.

Australia and New Zealand agreed with Brazil’s “unity” thesis on fighting for domestic support. Canada said it would support an evidence-based approach in exploring the proposals and options.

The G10 group of farm defensive countries led by Switzerland supported the proportionality principle advanced by Costa Rica to tackle the most trade-distorting domestic subsidies while reiterating its opposition to any product-specific caps.

During the meeting, differences also came into the open on the reports provided by the facilitators, particularly on the issue of removing export restrictions on the procurement of food items by the World Food Program (WFP) and trade-distorting domestic support, negotiators said.

Tanzania, which had opposed the draft General Council decision in December last year on removing the export restrictions, cautioned that while the European Union could impose export restrictions on the supplies of vaccines for fighting the COVID-19 pandemic, developing countries are being asked to exempt the WFP purchases from export-restrictive measures even though they have serious food security concerns, said another negotiator.

At the meeting, the proponents for exempting WFP purchases of food items from export restrictions, led by Singapore along with 80 other countries, highlighted their joint statement issued last month.

The European Union underscored the need to focus on the WFP exemption from export restrictions and across- the-board transparency.

India’s specific concerns voiced in December last year on the linkage between export restrictions and the Bali Peace Clause on public stockholding programs for food security remain unaddressed until now, said a negotiator, who asked not to be quoted.

However, the facilitator dealing with the issue of export restrictions, Mr Leonardo Rocha Bento from Brazil, insisted that he will continue with his work to accomplish an outcome at MC12, participants said.

The Cotton-Four (C4) countries led by Burkina Faso have demanded an outcome on the transparency aspects at MC12, while continuing their call for substantial reductions in trade-distorting subsidies for cotton, said a negotiator, who asked not to be quoted.