WTO members differ on post-Bali work on agriculture

Returning to the WTO after the summer recess, member state delegations remained divided over the way to deal with the contentious issues of trade facilitation and public food stocks.

Kanaga Raja reports.

GENEVA: An informal meeting of the regular WTO Agriculture Committee on 16 September saw a continued difference of views among members on how to proceed with the post-Bali work on agriculture.

According to trade officials, there was a difference among members broadly on two issues:

Continued impasse

The Agriculture Committee meeting came on the heels of an informal meeting of heads of delegation (HOD) that took place on 15 September, at which there appeared to be a continued impasse with regard to the food security issue and the adoption of the Protocol of Amendment that would bring to legal effect the Trade Facilitation Agreement (TFA).

At the informal HOD meeting, according to those present, Indian Ambassador to the WTO Anjali Prasad reiterated India’s remarks at the WTO General Council on 25 July, namely that there must be a postponement of the adoption of the Protocol of Amendment on the TFA until a permanent solution is found on the issue of public stockholding for food security purposes.

India told the HOD meeting that it was looking for an accelerated process as well as a dedicated mechanism to discuss and develop the permanent solution on food security and to conclude this by the end of the year, adding that there were already some proposals by the G33 grouping on the table, including one that was tabled in July.

The suggestion that a discussion on a permanent solution should be part of the overa2ll agriculture discussion was unacceptable, and it was also against the mandate in paragraph 1.11 of the Bali Ministerial Declaration, the Indian envoy is reported as having made clear.

The argument that discussions on a permanent solution cannot begin in the absence of complete information and up-to-date notifications was also not supported by the Bali Ministerial mandate, which had not laid down any conditions for the discussions to begin. In any event, India had filed its notifications up to 2010-11 and would continue to fulfil its commitments.

India had offered constructive suggestions to arrive at an outcome on food security. Whenever the WTO membership engaged seriously and with commitment as on the TFA, they had been able to resolve issues in a matter of months or even weeks, Prasad is reported to have reminded the HOD. The same should be possible on the food security issue too.

In its interactions with a cross-section of WTO members, India had discerned a fair amount of understanding and appreciation of India’s concerns on this issue, as well as a desire on the part of the members to resolve the issue. India also rejected the view that the public stockholding issue was of interest only to India. It was of relevance to a number of developing countries that have similar programmes in place and may soon find the limits on support a constraint on their farm support and food aid programmes, Prasad is reported to have told the informal HOD meeting.

India had heard of attempts being made to spread the apprehension that it would dump its accumulated grain stocks in other developing-country markets. This had no basis in fact, and it was far from helpful to spread such stories if the membership was to make some progress.

According to participants, India also took issue with the suggestion that the work programme on the remaining Doha issues was being held hostage to the trade facilitation-food security issue, saying that these remaining Doha issues were on a separate track.

India continued to believe that the multilateral trading system was in the best interest of developing countries, especially the poorest and most marginalized among them. The system must work for all and not just a select few and for that, timely correction of any imbalance or anomalies in the system or its rules was critical. If the system failed to function in a fair and just manner, then the most vulnerable sections of the world’s population would be left behind, India is reported to have said.

According to a report in the Washington Trade Daily (WTD), US Ambassador to the WTO Michael Punke proclaimed at the informal HOD meeting that Washington would not “renegotiate” the Bali agreements in order to break the impasse, but was willing to engage with India and other members on finding a “clarification” to the food security issue.

Switzerland, Japan, the European Union, Australia, Norway and Canada along with Chile, South Korea, Mexico, Singapore and Hong Kong-China supported the United States.

The WTD also cited a South American trade official present as saying that a permanent solution to food security was essential at this juncture.

According to the WTD, Brazil said while it was important to adopt the Protocol of Amendment without delay for the smooth implementation of the TFA, it was also important to address other issues. Argentina said there had been some improvements in the negotiations since July and that solutions could be found for all issues by December.

According to the WTD report, Kenya, on behalf of the African, Caribbean and Pacific (ACP) group, called on members to find a credible solution for agriculture and development issues with regard to the least developed countries (LDCs) in addition to the Protocol of Amendment on the TFA.

Bangladesh called for other issues of importance to the LDCs, such as duty-free, quota-free market access for LDC products and the services waiver for the LDCs, to be addressed, while Benin spoke of the unresolved issue of cotton, according to the WTD report.

The 15 September informal HOD meeting was the first one since the summer break and followed from a meeting that was held on 31 July.

The WTO missed the 31 July deadline for the adoption of the Protocol of Amendment that would have inserted the TFA into Annex 1A of the WTO Agreement.

A meeting of the General Council was held on 25 July to discuss the TFA but was suspended in the evening on account of lack of consensus on the Protocol of Amendment. In their interventions at that meeting, many developing countries voiced concern about the lack, in their view, of forward movement on issues of importance to them in the context of the Bali package.

India had made a strong statement at that meeting wherein it said that it was of the view that the TFA must be implemented only as part of a single undertaking including the permanent solution on food security.

India had received support from Bolivia, Cuba and Venezuela, who  said that they would have difficulty joining a consensus on the Protocol while no progress had been made on the areas of interest to developing countries.

Just a couple of hours or so before the 31 July midnight deadline was to pass, an informal HOD meeting was convened by WTO Director-General Roberto Azevedo, and this immediately reverted to an informal meeting of the Trade Negotiations Committee (TNC). Briefing members on the state of play since the suspension of the General Council on 25 July, the D-G, in his capacity as TNC Chair, reported that at present “there is no workable solution on the table” and that he did not have any indication that one would be forthcoming.

“A very precarious position”

In his statement at the HOD meeting on 15 September, Azevedo said that when members met on 31 July he had asked them to use the summer to reflect – to take the time to think deeply about how they could move forward in all areas of work. “Specifically: how we can continue to advance the implementation of the Bali decisions, and how we can advance our efforts on the post-Bali work programme.”

He said these were the issues that needed to be tackled, but argued that clearly “a vital aspect of our conversations on taking the Bali package forward will be how we can implement the Trade Facilitation Agreement.”

The D-G said that there seemed to be a clear interplay between concerns relating to the negotiations on public stockholding for food security purposes and the adoption of the Protocol of Amendment on the TFA.

“However, we know that strict parallelism is not possible,” he claimed, maintaining that one negotiation was concluded in the Bali package and the other was launched by the Bali package.

“That is the plain fact of the matter – indeed all of the Bali decisions have their own very specific timetables which advance at different paces. Nonetheless we must find a way of providing comfort for those with outstanding concerns on food security. And, at the same time, we must find a way of achieving the full implementation of all the other Bali decisions, including the Trade Facilitation Agreement,” he said.

Azevedo however said that from his conversations over the summer, it seemed that the solution was still far from evident.

The D-G also said “we must begin a period of intensive and comprehensive consultations, starting now – with the intention of making rapid progress,” adding that there would be a meeting of the Trade Negotiations Committee on 6 October.

In his own personal assessment, based on what members had said to him, he was of the view that “we are in a very precarious position. And at present I am not sure that the scale of the risk is fully appreciated by all.”

In its statement at the informal HOD meeting on 15 September, the European Union said that Bali was a landmark success for the WTO and that it was an important step in a process of transition that started at the previous Ministerial Conference, and during which “we significantly developed the way we approach multilateral negotiations in order to reach results.”

The developments of the last few weeks demonstrated once again the remaining difficulties of achieving success in multilateral trade negotiations, said the EU. “Some may say that we’ve been here before; we have missed other deadlines before. I would clearly disagree. We are facing a profound challenge with several very unique characteristics,” the EU representative added, citing two of these characteristics.

First, the inability to implement in July what was agreed in Bali hit the organization at a crucial moment when it was recovering part of its much-needed credibility. Second, the differences that emerged this time were not linked to ongoing negotiations whose outcome was not yet clear; they were rather target agreements already reached and commitments already made.

According to the EU, putting in question agreements reached collectively was profoundly different from not being able to reach new agreements.

Referring in particular to the concerns raised in relation to public stockholding and relevant deadlines, the EU said that food security was an important issue for all members and public stockholding may play a role in this context. It said that in Bali “we recognized this and we agreed on an open-ended solution that as we said already in previous occasions – in our interpretation – will be valid until we find a permanent one.”

The EU further said: “We therefore need clarity now on what exactly are the concerns that were raised specifically by one member:

“(1) If a confirmation of the open-ended nature of the interim solution is needed, then I think this can most probably be achieved. We are certainly ready to look at ways to clarify aspects of the Bali package, as long as we respect the substance of our Ministers’ decisions;

“(2) If some members were to expect that a permanent solution should become a condition to adopt the [trade facilitation] Protocol, then we are reopening what Ministers agreed in Bali. This cannot be an option, and agreeing on completely unrealistic deadlines cannot be one either.

“(3) But, for our part, we are ready to move the food security discussion forward and to accelerate work and reflections on a permanent solution. We believe that collectively we can certainly actively explore realistic ways to accelerate the negotiations on this issue and others.”

The EU further said that in order to move forward in a realistic way, “we need a clear understanding that the TF Protocol will be adopted, without links and conditions that go clearly beyond Bali. Unless this is addressed, we are concerned that many WTO members will not be able to engage in meaningful substantive negotiations on the post-Bali work programme or on any other issue, including public stockholding.”

The EU told the informal HOD meeting it was convinced that the organization simply could not realistically renegotiate Bali, could not move on post-Bali without clearly and unambiguously upholding Bali, and there could not be business as usual.

Questions at Agriculture Committee

Meanwhile, at the informal Agriculture Committee meeting on 16 September, trade officials said, several countries including the US, the EU, Japan and Australia voiced objection to India’s opposition to accepting the Protocol of Amendment on the TFA by the 31 July deadline until a permanent solution is found on the issue of public stockholding for food security purposes.

According to trade officials, Australia asked for an explanation for the difference between the G33 group’s 17 July proposal, which called for a permanent solution on public stockholding to be agreed by 2017, as was agreed at Bali, and the position of the G33 member that was blocking the TFA and calling for both the permanent solution and the TFA to be concluded by the end of 2014.

According to trade officials, India said that it would explain the G33 proposal when members start negotiating a permanent solution on public stockholding for food security purposes. India also said that it was not going to repeat what it had said at the 15 September informal HOD meeting.

Some members also said that they were unclear about what the problem with the Bali decision on public stockholding for food security purposes was. According to trade officials, they said that if the problem arose because of a lack of clarity about the duration of the present interim decision, then they would be happy to confirm that it will remain in place until a permanent solution is found. However, negotiating the content of the permanent solution would take more time than the rest of 2014, they added.

According to trade officials, India said that it had seen hundreds of brackets (placed within negotiating texts to indicate areas of disagreement) fall within weeks (in an apparent reference to the TFA negotiations), hence it could be done by December.

According to trade officials, the discussion on which body should handle the talks on the permanent solution on public stockholding also proved inconclusive, with a number of legal and procedural arguments being put forward, particularly for treating the talks as a negotiation in the Agriculture Committee’s “special sessions”.

According to trade officials, the Chair of the Agriculture Committee, Miriam Beatriz Chaves of Argentina, said that the link between trade facilitation and public stockholding could only be settled in a broader body such as the Trade Negotiations Committee.

The Chair said that she would reconvene this meeting later to discuss the appropriate forum for handling the permanent solution on public stockholding for food security purposes. (SUNS7876)

Third World Economics, Issue No. 576, 1-16 Sept 2014, pp2-4, 6