TWN Info Service on WTO and Trade Issues (Nov15/05)
9 November 2015
Third World Network

Differences over export competition, US isolated
Published in SUNS #8126 dated 3 November 2015

Geneva, 2 Nov (Kanaga Raja) - The Chair of the WTO agriculture negotiations has reported that while export competition has been identified as a possible deliverable for the upcoming Nairobi Ministerial Conference, "it is also clear today that there are still some significant outstanding issues within this pillar."

Ambassador Vangelis Vitalis of New Zealand gave this assessment, while providing an update of his recent consultations at an informal meeting of the Special Session of the Committee on Agriculture on 30 October.

The remarks and statements of various delegations at the meeting showed that the United States was isolated and faced opposition from developing and developed countries over its demands for a "safe harbour" approach and exemption for itself from the obligations of the SCM Agreement over export credit and food aid policies.

According to trade officials, the differences also remained on whether export competition should be linked with other issues, such as the special safeguard mechanism (SSM), and by how much should the Nairobi decision deviate from the 2008 Rev. 4 draft agriculture modalities text on export competition.

At the informal meeting, Indonesia, on behalf of the G-33, introduced a revised proposal on the SSM, saying that this version of the proposal is more flexible compared with the group's earlier submission.

According to trade officials, the G-33 proposal was supported by the African Group and the African, Caribbean and Pacific (ACP) Group.

However, members of the Cairns Group expressed concern over the linking of the export competition pillar with the SSM, and argued that the SSM would allow countries to raise tariffs instead of opening markets, which would be a step in the wrong direction of agriculture reform.

They were also of the view amongst others that introducing the SSM without tariff cuts would be meaningless.

According to trade officials, the Chair said that he plans to hold consultations on the technical aspects of the SSM proposal on 6 November.

According to trade officials, India said all three pillars of the agriculture negotiations - market access, domestic support and export competition - must be balanced, and that members must not "cherry pick" any pillar.

China said that members should not push any issue off the table, trade officials added.

Many members were also of the view that domestic support and market access issues should continue to be addressed after the Nairobi Ministerial Conference.

According to trade officials, the Chair also provided his assessment on the various elements in the export competition pillar, namely export subsidies, export credits, food aid and state-trading enterprises.

While Members generally agreed that the Rev. 4 text on export competition should be the starting point for the negotiations, there were differences on what elements of the text should be adjusted.

On export subsidies, where the Rev. 4 text specifies a timeline when export subsidies shall be fully eliminated and where some of these deadlines have already passed, Ambassador Vitalis proposed a simple transposition by simply adding seven years to the original text.

This would mean: the end of 2020 as the date of elimination of scheduled export subsidies by developed country Members; the end of 2023 for the date of elimination of scheduled export subsidies by developing country Members; and the end of 2028 for the termination of the Article 9.4 (of the Agreement on Agriculture) flexibilities for developing country Members.

According to trade officials, the Chair's proposal was supported by many members.

According to trade officials, on export finance, the US has insisted that its own export financing programmes allow 24 months' maximum repayment, and that it is not ready to accept the six months' (180 days) repayment term contained in Rev. 4.

The US also noted the need to include some kind of "Safe Harbour provision" to grant some protection against challenges to its export credit policies under the Agreement on Subsidies and Countervailing Measures (SCM).

According to trade officials, Australia, Canada and Norway voiced objections to the notion of a "Safe Harbour provision". They argued that it would be backtracking and a step in the wrong direction.

The US said that it will continue to participate actively and constructively.

The Chair also reported that the current Rev. 4 text on agricultural exporting State Trading Enterprises has not, so far, attracted specific concerns.

On provisions on international food aid, several developing countries, in particular the African Group, stressed the importance of disciplines in this area in order that international food aid would not be used to distort markets and hurt domestic industries.

According to trade officials, Ambassador Vitalis encouraged all members to stay as close as possible to the existing Rev. 4 text on export competition, and that any amendments to that text be "as limited as possible and only to the extent necessary".

On cotton, the Cotton 4 countries - Benin, Burkina Faso, Mali and Chad - circulated on 12 October their proposal on cotton, containing three elements on market access, domestic support and export competition.

The Chair reported on his consultations on these three elements:

* On market access, some participants asked the Cotton-4 to detail the list of products that would be covered by the duty-free and quota-free scheme. The Cotton 4 has provided a list of products with HS tariff line codes, which will be discussed shortly.

* On domestic support, the Chair said that "the feasibility and the overall balance of a possible outcome in Domestic Support remain a central issue... and it is clear that this remains a challenging area."

* On export competition, a cotton-related outcome should be envisaged within the scope of a wider outcome on export competition.

On public stockholding for food security purposes, the Chair, reporting on his consultations on this issue, said: "Unfortunately, I did not see any fundamental change in Members' well-known positions."

"On one hand, there were G-33 Members and others who saw the proposal as the basis for a permanent solution, and on the other hand, there were many other Members who highlighted what they considered to be the core problem of the proposal - that is transferring market price support to the Green Box," he said.