TWN Info Service on Sustainable Agriculture
15 March 2022
Third World Network

Brazil opposes permanent solution on public stockholding at WTO
Published in SUNS # 9534 dated 15 March 2022

Geneva, 14 Mar (D. Ravi Kanth) -  Brazil apparently caused chaos at the World Trade Organization on 11 March, after its deputy trade envoy made several "incendiary" comments against respecting the mandated ministerial decision on concluding a permanent solution on public stockholding programs for food security (PSH) for developing countries at the upcoming WTO's 12th ministerial conference (MC12).

At a small-group meeting convened by the chair of the Doha agriculture negotiating body on 11 March, remarks made by the deputy trade envoy of Brazil, Mr Braz Baracuhy Neto, apparently caused chaos when he said the mandates are not "written in rock" and that they can be easily changed, said people familiar with the development.

Brazil, which had led the G-20 group of developing countries since 2003 aimed at achieving balanced commitments in the three agriculture pillars of market access, domestic subsidies, and export competition, has drastically changed its positions since the change of government in 2019.

It had given up its entitlement to special and differential treatment and has chosen to align itself fully with the Cairns Group of farm-exporting countries as well as the United States and even the farm-defensive European Union, said people who asked not to be quoted.

Perhaps, things could change if former President Luiz Inacio Lula da Silva of the Workers' Party comes back to power at the presidential elections to be held later this year.

Nevertheless, Brazil is currently the fiercest opponent of the permanent solution for public stockholding programs for food security.

CHAIR'S TEXT IS "NOT BALANCED"

At the meeting on 11 March, India informed that the proponents seeking a mandated outcome on the permanent solution for public stockholding programs for food security at MC12 met the non-proponents of PSH bilaterally to address their concerns.

India said we have no hopes in the chair-led process, suggesting that the text issued by the chair lacked balance and that it is a non-starter for any further discussions.

The Indian trade envoy, Ambassador Brajendra Navnit, apparently said negotiations ought to be anchored on a member-led process, and not a chair-led process, a suggestion that was shared by several developing countries, said people, who asked not to be quoted.

As reported in SUNS #9500 dated 26 January 2022, many developing countries pointed to the chair, Ambassador Gloria Abraham Peralta from Costa Rica, having allegedly failed to adhere to the principles laid out in document TN/C/1 issued on 4 February 2002.

That document spelt out how the chairs of the WTO's negotiating bodies must work in member-driven negotiations.

At a meeting of the Doha agriculture negotiating body on 24 January, India and Turkey asked the chair to address the issue of "trust deficit" before discussing the way forward in the negotiations.

India asked whether the negotiating process is a chair-led or member-led process, suggesting that they have not gotten any response, according to people present at the meeting who asked not to be quoted.

India said that it is not the time to look forward, suggesting that members are seriously concerned as to what has happened behind the scenes.

Indonesia also made a very sharp statement, saying that they cannot accept document TN/AG/50 (the chair's report to the TNC containing the draft chair's text on agriculture in an annex) as a basis for further negotiations unless it is thoroughly revised, said people familiar with the development.

As reported in SUNS #9467 dated 25 November 2021, the chair Ambassador Peralta has apparently shifted the goal posts due to her alleged "biased" position on the permanent solution for public stockholding programs for food security in developing countries.

In her revised report to the Trade Negotiations Committee (TNC) on 23 November 2021, the chair had urged the trade ministers to "consider revisiting" the mandated permanent solution for public stockholding programs for food security (PSH) at the WTO's 12th ministerial conference (MC12), but to defer the outcome on PSH to the 13th ministerial conference (MC13).

Effectively, the chair appears to have permanently undermined the permanent solution for public stockholding programs for food security in developing countries, despite demands for an outcome at MC12 by the G33 group of developing countries as well as the African Group, said people who asked not to be quoted.

The chair's report covered seven main areas. They include: (1) agriculture domestic support; (2) market access; (3) export competition; (4) export restrictions; (5) cotton; (6) the special safeguard mechanism (SSM); and (7) public stockholding programs for food security, as well as the cross-cutting issue of transparency.

Yet, a cursory glance at the draft text suggests that the chair has put the issues of interest to the Cairns Group of farm-exporting countries, of which Costa Rica is an active member, such as domestic support, market access, and transparency provisions on a higher pedestal, as compared to PSH, the special safeguard mechanism for developing countries, and the long-pending cotton issue, said people familiar with the draft text.

It is against this backdrop that Brazil's deputy trade envoy Mr Baracuhy Neto made several allegedly "incendiary" remarks that Brazil will not accept the existing ministerial mandate on PSH.

He claimed that ministerial mandates can be altered, suggesting that "it takes two to tango and one to break it".

Mr Baracuhy Neto, who previously wrote an article with his former boss Roberto Azevedo in 2011, saying that the December 2008 draft agriculture modalities "are the basis for negotiations and represent the end game in terms of the landing zones of ambition", had subsequently changed that position, said a person, who asked not to be quoted.

Brazil said that the WTO should not be "weaponized", underscoring the need for strengthening the international organizations.

In a sharp response to Brazil's comments on PSH, China is understood to have said that ministerial mandates can't be altered unless ministers decide to do so, said people familiar with the statement.

Australia said the chair's text should be preserved and that it is the only text in the last ten years.

Despite the chaotic meeting, the chair, Ambassador Peralta, described the discussions as "rich", said a participant.

The chair is planning to convene a regular meeting of the negotiating body on 21 March.

EU BRINGS RUSSIA TO CENTER STAGE

The EU apparently brought the issue of the Russian invasion of Ukraine to the center stage at the small-group meeting on 11 March which was tasked to negotiate the proposed "deliverables" for MC12 that is scheduled to be held in the second week of June, with Brussels maintaining that the WTO members can't be "naive" about continuing with the discussions when war is at the door, said people familiar with the development.

The EU delivered a sharp statement about the prevailing conditions in Europe due the Russian invasion of Ukraine.

The EU is understood to have said that it will not participate in the small-group meetings if Russia is allowed to participate, said a person, who asked not to be quoted.

Significantly, Russia was not invited to the small-group meeting. It appears that the chair will hold a bilateral meeting with Russia on the issues discussed at the meeting. From now on, Russia can only make its statements at the open-ended meetings, the person said.

Russia has also privately conveyed that all statements relating to war should be placed in a "Z" box, the person suggested.

Japan also joined the EU in suggesting that it is a grim situation arising from Russia's war against Ukraine, said people familiar with the discussion.

A US delegate appears to have said that members can't remain neutral about the recent developments, suggesting that it has affected global food security.