US trying to scupper Nairobi outcome on food security

by D. Ravi Kanth

GENEVA: The United States, the European Union, Australia and other countries have nearly scuppered an outcome for the proposed permanent solution for public stockholding programmes for food security purposes demanded by 47 developing countries for the upcoming Nairobi ministerial meeting of the WTO, several trade envoys told the South-North Development Monitor (SUNS).

In a coordinated effort to block the G-33 proposal for arriving at a permanent solution for public stockholding programmes for food security, the US, the EU, Australia, Canada, Norway, Pakistan, Paraguay, Colombia and Brazil adopted on 5 November nuanced positions for denying a permanent solution at the Nairobi conference, according to an African trade envoy who asked not to be quoted.

The chair of the Doha agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand, had convened the 5 November meeting with select trade envoys to discuss the proposed outcome for a permanent solution for public stockholding programmes for food security purposes.

Last year, the WTO’s General Council mandated members to negotiate a permanent solution by the 10th Ministerial Conference (i.e., the Nairobi conference).

Prior to the General Council decision, the G-33 group led by Indonesia had presented three options for arriving at the permanent solution:

i) adding a new paragraph to include market price support for food security in the so-called Green Box disciplines of the WTO Agreement on Agriculture that are exempt from any subsidy reduction commitments;

ii) amending the existing rules to ensure that the acquisition of food stocks by developing countries to support low-income and resource-poor farmers is not required to be calculated under the current method of calculating the Aggregate Measurement of Support (AMS); and

iii) modifying the rules to calculate subsidies based on the so-called external reference period of 1986-88 prices of the Uruguay Round agreement.

The 2008 revised draft modalities for agriculture had proposed the requisite changes to ensure that “there is no requirement for differences between the acquisition price and the external reference price to be accounted for in the AMS.”

Importance of permanent solution

At the 5 November meeting, Egypt emphasized the importance of a permanent solution for public stockholding programmes. It demanded a permanent solution at the Nairobi meeting as mandated by members last year.

Canada, one of the leading opponents of a permanent solution, said that it is a red line for Ottawa to include the market price support schemes in the Green Box. Canada also said that the proponents have not explained why the interim solution which was agreed last year is not a good starting point to implement the scheme.

The interim solution was agreed last year after a bilateral deal between the US and India in which the two sides proposed to find a permanent solution by the 10th Ministerial Conference. The bilateral deal was reached after India had held up the Trade Facilitation Agreement and the protocol for its incorporation into the WTO Agreement’s Annex 1A.

In response to Canada’s opposition, Indonesia lamented that the opponents of the G-33 proposal failed to give any reasons for their disagreement, according to participants familiar with the meeting.

The EU flatly ruled out including market-based support programmes in the Green Box, saying members can look at the interim solution. Since time is short for the Nairobi ministerial meeting beginning on 15 December, there cannot be a deliverable on the permanent solution, the EU maintained.

Pakistan and Paraguay spoke about the leakages that could take place because of the public stockholding scheme. Pakistan sought to know why countries seeking the permanent solution are maintaining huge stocks.

Kenya, the host of the 10th Ministerial Conference, said categorically that the G-33 coalition is looking for a permanent solution by the Nairobi ministerial. After dismissing the concerns raised by Canada and the EU, Kenya said the solution lies in including the public distribution schemes in the Green Box, adding that the G-33 members are ready to look for a solution that would address unintended consequences.

Brazil said the interim solution can be a good starting point for public stockholding programmes. Brazil also maintained that the permanent solution can be a deliverable in Nairobi provided export competition in all areas is resolved, according to participants present at the meeting.

The Philippines demanded the permanent solution based on the G-33 proposal, while Turkey expressed sharp concern at the lack of engagement to arrive at a concrete outcome. The failure to arrive at a permanent solution could block future work, Turkey cautioned.

The US said it is difficult to arrive at an agreement by the Nairobi ministerial, suggesting members cannot agree to watering down the existing interim solution. The US also expressed disappointment over the lack of engagement over its proposal submitted several months ago, said a participant after the meeting.

India reminded the members that the only proposal on the table is the one submitted by the G-33 as per the mandate. India maintained that the US proposal is outside the Bali mandate.

India asked the opponents of the G-33 proposal why they cannot come up with a counter-proposal if they have specific concerns on what the G-33 had presented. India said that its Prime Minister, Narendra Modi, has called for a permanent solution at the Nairobi ministerial meeting, said another participant.

Norway said it is possible to start with the interim solution while Australia asked whether the G-33 is ready to find solutions outside the Green Box.

In the face of the sharply differing views, the chair Ambassador Vitalis said he will hold bilateral consultations with members in the coming days.

However, it is unlikely that the chair’s efforts will yield any result because of the continued diversionary tactics adopted by the US, the EU and other industrialized countries, said an African trade envoy. (SUNS8130)                      

Third World Economics, Issue No. 603, 16-31 October 2015, pp7-8