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

Attempts to “stonewall” permanent solution for PSH programs at WTO
Published in SUNS #9540 dated 23 March 2022

Geneva, 22 Mar (D. Ravi Kanth) – The prospects for the much-demanded permanent solution for public stock-holding (PSH) programs for food security in developing countries appear to hang in the balance due to the alleged “stonewalling” tactics being adopted by a group of farm-exporting countries, particularly Brazil, to scupper any outcome on this crucial issue, said people familiar with the development.

Many developing countries led by Indonesia and India on 21 March demanded an outcome on the permanent solution for public stockholding programs for food security at the World Trade Organization’s 12th ministerial conference (MC12), likely to be held in Geneva from 12-15 June.

The developing countries have stepped up their efforts for a simple and effective permanent solution for PSH programs for food security and the special safeguard mechanism (SSM) for developing countries through their bilateral discussions with the key opponents for some time now.

At a meeting of the Doha agriculture negotiating body on 21 March, Indonesia, which coordinates the G-33 group of developing and least-developed countries, India, the African Group, and several Caribbean countries raised the stakes on the permanent solution for PSH programs for food security as a “must-have” at the upcoming MC12.

The developing countries argued that they have answered the questions raised by several of the non-proponents and provided evidence on the need for the permanent solution for PSH programs for food security as well as the SSM, said people familiar with the development.

The developing countries have been waging a relentless battle since 2015 on securing an outcome on the permanent solution for PSH programs for food security and the SSM.

However, members of a group of farm-exporting countries, particularly the United States and now Brazil, have continued to adopt “stonewalling” tactics to scupper any outcome on these two issues, said people, who asked not to be quoted.

“STONEWALLING” TACTICS OVER PSH PROGRAMS

During the meeting on 21 March, nearly three hours were spent discussing the permanent solution on PSH programs for food security in which a group of farm-exporting countries dominated the proceedings, said people familiar with the discussions.

More disturbingly, at the eleventh hour, the farm-exporting countries – Canada, Australia, New Zealand, Chile, Colombia, Paraguay, Uruguay, and Brazil as well as the US – raised a series of questions in what appears to be an attempt to reinforce their “stonewalling” tactics to block a decision on the permanent solution on PSH programs for food security, said people familiar with the development.

Canada, on behalf of the US, Australia, New Zealand, Chile, Colombia, Paraguay, Uruguay, and Brazil, made a detailed presentation questioning the proponents on the need to have a permanent solution for PSH programs for food security.

Earlier, the farm-exporting countries had circulated a 20-page paper (Job/Ag/210/Rev. 1) on 17 March, arguing that: (1) there are several questions regarding the expenditures incurred for market price support that undergirded the PSH programs; (2) the difficulties to “corroborate that procurement was made at a market price and not via a form of price support or administered prices”; and (3) more than 100 questions were raised at the WTO’s Committee on Agriculture but failed to secure clear answers, and so on.

According to the farm-exporting countries, “the amount of detail, variety of sources, and the approach taken in order to write this paper attests to inconsistencies and information gaps on the way Members notify expenditures for PSH.”

The opponents to the permanent solution for PSH programs for food security argued that “most members (who are implementing PSH programs) have provided very little information over the years in their DS:1 (domestic support I) notification to help the WTO Membership better understand their programs.”

The paper submitted by the farm-exporting countries has underscored “the need for more transparency to help inform negotiations related to PSH.”

These countries maintained that “discussions may be warranted to clarify whether a developing country Member that does not report its PSH as a measure under Annex 2 (concerning domestic support: the basis for exemption from the reduction commitments), paragraph 3 (public stockholding programs for food security), could benefit from the current Bali decision or a permanent solution on PSH.”

The farm-exporting countries said that what was followed for the Bali interim decision cannot be followed for the permanent solution for PSH programs for food security.

Further, Brazil and several other farm-exporting countries such as Paraguay, Canada, and even the United Kingdom, maintained that they will not accept anything that will restrain their right to challenge these programs.

“The right to challenge is very critical and they cannot accept a permanent solution,” Brazil apparently said at the meeting.

The farm-exporting countries said that there is no concept of a permanent “peace clause”, suggesting that when it is permanent, it would be called a waiver.

However, their interpretation of a waiver is wrong, said an analyst who asked not to be quoted.

Brazil apparently said that “a permanent solution for PSH built upon a permanent peace clause, uncapped limits for subsidization and weak transparency and safeguards requirements, is not consensual and does not fit into a comprehensive package for food security.”

Brazil also apparently came to the rescue of the chair of the agriculture negotiations, Ambassador Gloria Abraham Peralta from Costa Rica, saying that “we disagree with the Members that seek to put the blame for any failure in the agriculture negotiations on you and on the negotiating process.”

CHAIR’S CONTROVERSIAL TEXT

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 PSH 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 programs 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 (containing the draft text) 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; 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 programs, the special safeguard mechanism for developing countries, and the long-pending cotton issue, said people familiar with the draft text.

In short, it appears that there may not be any outcome on the permanent solution on PSH programs for food security at MC12 unless the large majority of developing countries put up a determined fight to secure a favourable outcome on this issue.