TWN Info Service on WTO and Trade Issues (Dec15/21)
23 December 2015
Third World Network

MC10 closes by adopting 'Nairobi package'
Published in SUNS #8161 dated 22 December 2015

Geneva, 21 Dec (Kanaga Raja) - The tenth Ministerial Conference (MC10) of the World Trade Organisation (WTO) concluded in Nairobi on 19 December, a day later than scheduled, by adopting some six Ministerial decisions covering issues in agriculture including public stockholding for food security, the Special Safeguard Mechanism (SSM) and cotton as well as on the Least Developed Countries (LDCs).

The Ministers also adopted the Nairobi Ministerial Declaration (WT/MIN(15)/W/33/Rev.3) consisting of three parts. The first part contains the preamble, and the achievements and challenges on the occasion of the WTO's twentieth anniversary (paragraphs 1-20).

Parts II and III of the Ministerial Declaration are highlighted below:

Part II: Regular work under the General Council

21. We welcome the following decisions we have adopted at this Session:

* Work Programme on Small Economies - Draft Ministerial Decision - WT/MIN(15)/W/24.

* TRIPS Non-violation and Situation Complaints - Draft Ministerial Decision - WT/MIN(15)/W/25.

* Work Programme on Electronic Commerce - Draft Ministerial Decision - WT/MIN(15)/W/26.

22. We further welcome the adoption by the TRIPS Council of the Decision on the Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least-developed Country Members for certain obligations with respect to pharmaceutical products as well as the related Waiver Decision adopted by the General Council concerning least-developed country Members' obligations under Article 70.8 and 70.9 of the TRIPS Agreement.

DOHA DEVELOPMENT AGENDA

23. We welcome the progress in the DDA, which is embodied in the following Decisions and Declarations we have adopted at our Tenth Session:

Agriculture

* Special Safeguard Mechanism for Developing Country Members - Draft Ministerial Decision of 19 December 2015 - WT/MIN(15)/W/45.

* Public Stockholding for Food Security Purposes - Draft Ministerial Decision of 19 December 2015 - WT/MIN(15)/W/46.

* Export Competition - Draft Ministerial Decision of 19 December 2015 - WT/MIN(15) /W/47.

Cotton

* Cotton - Draft Ministerial Decision of 19 December 2015 - WT/MIN(15)/W/48.

LDC issues

* Preferential Rules of Origin for Least-Developed Countries - Draft Ministerial Decision - WT/MIN(15)/W/38.

* Implementation of Preferential Treatment in Favour of Services and Service Suppliers of Least Developed Countries and Increasing LDC Participation in Services Trade - Draft Ministerial Decision - WT/MIN(15)/W/39.

PART III

24. We strongly commit to addressing the marginalization of LDCs in international trade and to improving their effective participation in the multilateral trading system. Towards that end, we shall ensure that all issues of specific interest to LDCs shall be pursued on a priority basis, with a view to strengthening them, making them commercially meaningful and, when appropriate, legally binding.

25. We reaffirm our commitment to fully implement the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries, including differential treatment in line with the Marrakesh Decision in the context of the agriculture negotiations, in recognition of the challenges that these Members continue to face.

26. We reaffirm our commitment to continue to address in every area of WTO work, in a substantive and meaningful manner, the needs of small, vulnerable economies (SVEs) and to favourably consider the adoption of such measures as would facilitate their fuller integration into the multilateral trading system. We will take into account the needs of SVEs in all areas of negotiations, without creating a sub-category of WTO Members.

27. We recognize the special situation of the Members acceded in accordance with Article XII of the Agreement Establishing the World Trade Organization who have undertaken extensive market access commitments at the time of accession. This situation shall be taken into account in the negotiations.

28. We reaffirm the need to ensure that Regional Trade Agreements (RTAs) remain complementary to, not a substitute for, the multilateral trading system. In this regard, we instruct the Committee on Regional Trade Agreements (CRTA) to discuss the systemic implications of RTAs for the multilateral trading system and their relationship with WTO rules. With a view to enhancing transparency in, and understanding of, RTAs and their effects, we agree to work towards the transformation of the current provisional Transparency Mechanism into a permanent mechanism in accordance with the General Council Decision of 14 December 2006, without prejudice to questions related to notification requirements.

29. We agree to reinvigorate the regular work of the Committees and direct the General Council to consider the need for adjustments in the structure of their subsidiary bodies in light of their relevance to the implementation and operation of the Covered Agreements.

30. We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organization.

31. Nevertheless, there remains a strong commitment of all Members to advance negotiations on the remaining Doha issues. This includes advancing work in all three pillars of agriculture, namely domestic support, market access and export competition, as well as non-agriculture market access, services, development, TRIPS and rules. Work on all the Ministerial Decisions adopted in Part II of this Declaration will remain an important element of our future agenda.

32. This work shall maintain development at its centre and we reaffirm that provisions for special and differential treatment shall remain integral. Members shall also continue to give priority to the concerns and interests of least developed countries. Many Members want to carry out the work on the basis of the Doha structure, while some want to explore new architectures.

33. Mindful of this situation and given our common resolve to have this meeting in Nairobi, our first Ministerial Conference in Africa, play a pivotal role in efforts to preserve and further strengthen the negotiating function of the WTO, we therefore agree that officials should work to find ways to advance negotiations and request the Director-General to report regularly to the General Council on these efforts.

34. While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.

MINISTERIAL DECISION ON PUBLIC STOCKHOLDING

The Ministerial Decision is as follows:

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization; and

Taking note of the progress made so far;

Decides as follows:

1. Members note the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38 and WT/L/913) and reaffirm the General Council Decision of 27 November 2014 (WT/L/939).

2. Members shall engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes. In order to achieve such permanent solution, the negotiations on this subject shall be held in the Committee on Agriculture in Special Session ("CoA SS"), in dedicated sessions and in an accelerated time-frame, distinct from the agriculture negotiations under the Doha Development Agenda ("DDA").

3. The General Council shall regularly review the progress.

SPECIAL SAFEGUARD MECHANISM

The Ministerial Decision on the Special Safeguard Mechanism for Developing Country Members is as follows:

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization;

In the context of addressing outstanding agricultural issues; and

Taking note of the proposals made by Members in this regard;

Decides as follows:

1. The developing country Members will have the right to have recourse to a special safeguard mechanism (SSM) as envisaged under paragraph 7 of the Hong Kong Ministerial Declaration.

2. To pursue negotiations on an SSM for developing country Members in dedicated sessions of the Committee on Agriculture in Special Session ("CoA SS").

3. The General Council shall regularly review progress in these negotiations.

EXPORT COMPETITION

The Ministerial Decision on Export Competition is as follows:

On Export Subsidies, the Decision states:

6. Developed Members shall immediately eliminate their remaining scheduled export subsidy entitlements as of the date of adoption of this Decision. (3,4)

[Footnote 4 states: This paragraph shall not cover processed products, dairy products, and swine meat of a developed Member that agrees to eliminate as of 1 January 2016 all export subsidies on products destined for least developed countries, and that has notified export subsidies for such products or categories of products in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the date of adoption of this Decision. For these products, scheduled export subsidies shall be eliminated by the end of 2020, and quantity commitment levels shall be applied as a standstill until the end of 2020 at the actual average of quantity levels of the 2003-05 base period. Furthermore, there shall be no export subsidies applied either to new markets or to new products.]

7. Developing country Members shall eliminate their export subsidy entitlements by the end of 2018. (5)

[Footnote 5 states: Notwithstanding this paragraph, a developing country Member shall eliminate its export subsidy entitlements by the end of 2022 for products or groups of products for which it has notified export subsidies in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the date of adoption of this Decision.]

8. Developing country Members shall continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture until the end of 2023, i.e. five years after the end-date for elimination of all forms of export subsidies. Least developed countries and net food-importing developing countries listed in G/AG/5/Rev.10 shall continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture until the end of 2030.

9. Members shall not apply export subsidies in a manner that circumvents the requirement to reduce and eliminate all export subsidies.

10. Members shall seek not to raise their export subsidies beyond the average level of the past five years on a product basis.

11. Members shall ensure that any export subsidies have at most minimal trade distorting effects and do not displace or impede the exports of another Member. To that effect, Members using export subsidies shall give due consideration to the effects of any such export subsidies on other Members, and shall consult, upon request, with any other Member having a substantial interest as an exporter with respect to any matter related to the export subsidies in question. The Member applying such export subsidies shall provide, upon request, such a Member with necessary information.

On cotton, the Decision states:

12. With regard to cotton, the disciplines and commitments contained in this Decision shall be immediately implemented as of the date of adoption of this Decision by developed country Members, and not later than 1 January 2017 by developing country Members.

On Export Credits, Export Credit Guarantees or Insurance Programmes, the Decision states on terms and conditions:

15. Export financing support shall be provided in conformity with the terms and conditions set out below:

(a) Maximum repayment term: the maximum repayment term for export financing support under this Decision, this being the period beginning at the starting point of credit and ending on the contractual date of the final payment, shall be no more than 18 months. For developed Members, this shall apply from the last day of 2017. Existing contracts which have been entered into prior to the adoption of this Decision, are still in place, and are operating on a longer timeframe than that defined in the preceding sentence, shall run their course until the end of their contractual date, provided that they are notified to the Committee on Agriculture and are not modified;

(b) Self-financing: Export credit guarantee, insurance and reinsurance programmes and other risk cover programmes included within sub-paragraphs 13(b), (c) and (d) above shall be self-financing and cover the long- term operating costs and losses of a programme in the sense of item (j) of the Illustrative List of Annex I of the Agreement on Subsidies and Countervailing Measures. For the operations covered in the previous sentence, premiums shall be charged and be risk-based.

Special and Differential Treatment

16. Developing country Member providers of export financing support shall be eligible to benefit from the following:

Maximum repayment terms: the developing country Members concerned shall have a phase-in period of four years after the first day of the implementation period by the end of which to fully implement the maximum repayment term of 18 months. This shall be achieved as follows:

(a) on the first day of implementation, the maximum repayment term for any new support entered into shall be 36 months;

(b) two years after implementation, the maximum repayment term for any new support to be entered into shall be 27 months;

(c) four years after implementation, the maximum repayment term of 18 months shall apply.

It is understood that where there are, after any of the relevant dates, pre-existing support arrangements entered into under the limits established in the subparagraphs (a)-(c) above, they shall run their original term.

17. Notwithstanding the terms of paragraphs 15(a) and 16 above, least-developed and net food-importing developing countries listed in G/AG/5/Rev.10 shall be accorded differential and more favourable treatment comprising allowance for a repayment term in respect of them of between 36 and 54 months, for the acquisition of basic foodstuffs. Should one of these Members face exceptional circumstances which still preclude financing normal levels of commercial imports of basic foodstuffs and/or in accessing loans granted by multilateral and/or regional financial institutions within these timeframes, it shall have an extension of such a time-frame. The standard monitoring and surveillance provisions, as resulting from this Decision, shall apply to these cases.

On Agricultural Exporting State Trading Enterprises, the Decision states:

18. Members shall ensure that agricultural exporting state trading enterprises are operated in conformity with the provisions specified in paragraphs 20 and 21, in accordance with Article XVII, the Understanding on the Interpretation of Article XVII and other relevant provisions of GATT 1994, the Agreement on Agriculture and other WTO Agreements.

19. For the purpose of the disciplines set out hereunder in this Decision, an agricultural exporting state trading enterprise shall be any enterprise which meets the working definition provided for in the Understanding on the Interpretation of Article XVII of the GATT 1994 and is engaged in exports of products listed in Annex 1 of the Agreement on Agriculture.

20. Members shall ensure that agricultural exporting state trading enterprises do not operate in a manner that circumvents any other disciplines contained in this Decision.

21. Members shall make their best efforts to ensure that the use of export monopoly powers by agricultural exporting state trading enterprises is exercised in a manner that minimizes trade distorting effects and does not result in displacing or impeding the exports of another Member.

On International Food Aid, the Decision states:

22. Members reaffirm their commitment to maintain an adequate level of international food aid, to take account of the interests of food aid recipients and to ensure that the disciplines contained hereafter do not unintentionally impede the delivery of food aid provided to deal with emergency situations. To meet the objective of preventing or minimizing commercial displacement, Members shall ensure that international food aid is provided in full conformity with the disciplines specified in paragraphs 23 to 32, thereby contributing to the objective of preventing commercial displacement.

23. Members shall ensure that all international food aid is: a. needs-driven; b. in fully grant form; c. not tied directly or indirectly to commercial exports of agricultural products or other goods and services; d. not linked to the market development objectives of donor Members; and that e. agricultural products provided as international food aid shall not be re-exported in any form, except where the agricultural products were not permitted entry into the recipient country, the agricultural products were determined inappropriate or no longer needed for the purpose for which they were received in the recipient country, or re-exportation is necessary for logistical reasons to expedite the provision of food aid for another country in an emergency situation. Any re-exportation in accordance with this subparagraph shall be conducted in a manner that does not unduly impact established, functioning commercial markets of agricultural commodities in the countries to which the food aid is r e-exported.

24. The provision of food aid shall take into account local market conditions of the same or substitute products. Members shall refrain from providing in-kind international food aid in situations where this would be reasonably foreseen to cause an adverse effect on local or regional production of the same or substitute products. In addition, Members shall ensure that international food aid does not unduly impact established, functioning commercial markets of agricultural commodities.

25. Where Members provide exclusively cash-based food aid, they are encouraged to continue to do so. Other Members are encouraged to provide cash-based or in-kind international food aid in emergency situations, protracted crises (as defined by the FAO), or non-emergency development/capacity building food assistance environments where recipient countries or recognized international humanitarian/food entities, such as the United Nations, have requested food assistance.

26. Members are also encouraged to seek to increasingly procure international food aid from local or regional sources to the extent possible, provided that the availability and prices of basic foodstuffs in these markets are not unduly compromised.

27. Members shall monetize international food aid only where there is a demonstrable need for monetization for the purpose of transport and delivery of the food assistance, or the monetization of international food aid is used to redress short and/or long term food deficit requirements or insufficient agricultural production situations which give rise to chronic hunger and malnutrition in least-developed and net food-importing developing countries.

28. Local or regional market analysis shall be completed before monetization occurs for all monetized international food aid, including consideration of the recipient country's nutritional needs, local United Nations Agencies' market data and normal import and consumption levels of the commodity to be monetized, and consistent with Food Assistance Convention reporting. Independent third party commercial or non-profit entities will be employed to monetize in-kind international food aid to ensure open market competition for the sale of in-kind international food aid.

29. In employing these independent third party commercial or non-profit entities for the purposes of the preceding paragraph, Members shall ensure that such entities minimize or eliminate disruptions to the local or regional markets, which may include impacts on production, when international food aid is monetized. They shall ensure that the sale of commodities for food assistance purposes is conducted in a transparent, competitive and open process and through a public tender.

30. Members commit to allowing maximum flexibility to provide for all types of international food aid in order to maintain needed levels while making efforts to move toward more untied cash-based international food aid in accordance with the Food Assistance Convention.

31. Members recognize the role of government in decision-making on international food aid in their jurisdictions. Members recognize that the government of a recipient country of international food aid can opt out of the usage of monetized international food aid.

32. Members agree to review the provisions on international food aid contained in the preceding paragraphs within the regular Committee on Agriculture monitoring of the implementation of the Marrakesh Ministerial Decision of April 1994 on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-developed and net food-importing developing countries.