TWN Info Service on WTO and Trade Issues (Jul17/01)
3 July 2017
Third World Network

Prospects for any Doha agri accords at MC11 bleak
Published in SUNS #8491 dated 29 June 2017

Geneva, 28 Jun (D. Ravi Kanth) -- The African Group of countries, particularly the Cotton-four - Benin, Burkina Faso, Mali and Chad - are going to be left high and dry at the World Trade Organization's eleventh ministerial meeting (MC11) at Buenos Aires in December without any outcomes on their main demands for reducing the domestic support in agriculture by the developed countries, sources told SUNS.

Indeed, the prospects for any outcome on the outstanding Doha agriculture issues - special safeguard mechanism for developing countries, reduction commitments in domestic support, and tariff simplification in market access - are close to zero at the Buenos Aires meeting.

Meanwhile, attempts are largely focussed on finalizing a cosmetic deal on the permanent solution for public stockholding programs for food security and enhanced transparency provisions for export restrictions on developing countries, sources said.

During the intense consultations held by the chair for the Doha agriculture negotiations, Ambassador Stephen Ndungu Karau of Kenya, with select countries during the past fortnight, it has become clear that there will not be any deal on the domestic support, tariff simplification, and other outstanding issues in the Doha agriculture dossier, sources said.

Part of the reason for lack of progress on domestic support is the ongoing work in the United States on its new farm bill.

The US has already indicated that it will not address issues in the domestic support based on the Doha Work Program (DWP).

The European Union and Brazil, which opposed each other fiercely during the Doha agriculture negotiations over the domestic support reduction commitments in 2003, are now currently working together, cobbling a proposal that would take on board the US demands, including shifting the burden of subsidy reduction commitments on to developing countries, sources said.

The chair for the Doha agriculture negotiations discussed during consultations the permanent solution for public stockholding programs for food security, the special safeguard mechanism for developing countries, domestic support, market access, and export restrictions.

The chair will discuss cotton, particularly a proposal for cutting domestic support in cotton by the Cotton-four countries - Benin, Burkina Faso, Mali, and Chad – on 30 June.

Effectively, the chair has decided what issues it will address, instead of tackling all the outstanding Doha agriculture issues, said a source, who asked not to be quoted.

On the proposed permanent solution for public stockholding programs for food security which is being advanced by Indonesia on behalf of the G-33 developing countries, major industrialized and several developing countries expressed their willingness for finalizing an outcome by December after sorting out issues concerning safeguards for preventing the leakage of stocks procured for food security programs into the international market, according to trade envoys who attended the meeting.

Despite the G-33 group's demand for considering the creation of a new annex to exempt market price support programs from any AMS (aggregate measurement of support) reduction commitments, the opponents said they will work towards a permanent solution but will not accept any demands for including PSH (public stockholding) programs in the green box or creation of a special annex to include market price support for PSH programs.

The US, which has all along raised several hurdles to the permanent solution, urged the G-33 proponents to suggest how they would address the concerns raised on the slippage of stocks procured for PSH into the international market.

The US, according to one trade envoy, said that it is not bound by the Nairobi ministerial decision to finalize the permanent solution.

However, the US and India have held consultations on the specific elements of the permanent solution for public stockholding programs for food security.

The European Union insisted that the permanent solution for PSH, including for new programs to be covered under the permanent solution, will only be discussed in relation to the reduction commitments in domestic support programs, a stand that was opposed by leading G-33 members.

Australia and other Cairns Group members expressed sharp concerns about the leakage of stocks procured for PSH entering into the international market, suggesting that the G-33 must come up with concrete proposals to address the safeguards issue.

The G-33 is currently preparing a proposal on how it intends to address issues concerning the issue of transparency and slippage of stocks procured for public stockholding programs for food security.

On the issue of special safeguard mechanism (SSM) for developing countries as demanded by the G-33 group, the leading opponents such as the Cairns Group of countries led by Australia and major developed countries remained silent during the meeting.

In short, barring five or six countries that pressed for a special safeguard mechanism for developing countries, no other member intervened during the meeting, sources said.

As regards export restrictions which was discussed following Singapore's proposal, there was wide support for an outcome at Buenos Aires, including from Argentina, which had opposed export restrictions in the past because of its export taxes.

Singapore's proposal called for "clearer understanding on advance notification through stronger transparency provisions" so as to ensure greater predictability.

The US along with several other industrialized countries support commitments on export restrictions.

But three countries - South Africa, China, and India - expressed sharp scepticism about undertaking transparency and notification requirements on grounds that these will impose onerous commitments on developing countries.

South Africa remained fiercely opposed to an outcome on export restrictions because of the onerous burden it would pose to developing countries.

On domestic support reduction commitments, a priority area for South Africa and the African Group of countries, the US said it will not discuss the issue in the dark, implying that countries must submit their latest notifications without further delay.

The US also insisted that all members must take commitments to reduce their domestic support while many developing countries said they will abide by the revised draft Doha agriculture modalities text of 2008.

South Africa said the developing countries are not required to undertake commitments in domestic support as per the Doha Work Program.

India opposed attempts to do away with special and differential flexibilities in Article 6.2 of the AoA (Agreement on Agriculture).

There is not going to be any outcome on domestic support at Buenos Aires except a general statement to continue with further work because of the ongoing consultations on the new US farm bill, an authoritative source told SUNS.

The EU and Brazil which are working jointly to introduce a proposal on domestic support have not been able to finalize it because of concern from several EU members on the proposed reduction commitments.

Several members of the G-10 group of agriculture defensive countries have also remained sceptical on domestic support.

The EU and the G-10 countries also opposed tariff simplification at this juncture.

New Zealand also suggested that it would be difficult to address tariff simplification at this juncture because of high prices.

In short, the stage is set for inconsequential outcomes in agriculture at the Buenos Aires meeting while silently burying the huge volume of work done in the Doha agriculture negotiations, including the famous revised draft modalities of December 2008.

The 2008 revised draft modalities, which were blocked by the US because of the underlying commitments in agriculture, provided clear landing zones in a balanced and equitable framework.

Roberto Azevedo, when he was ambassador of Brazil to the WTO before becoming the WTO's director-general, had said in 2011:

"The December 2008 draft modalities are the basis for negotiations and represent the endgame in terms of the landing zones of ambition. Any marginal adjustments in the level of ambition of those texts may be assessed only in the context of the overall balance of trade-offs, bearing in mind that agriculture is the engine of the Round.

"The draft modalities embody a delicate balance achieved after ten years of negotiations. This equilibrium cannot be ignored or upset, or we will need readjustments of the entire package with horizontal repercussions. Such adjustments cannot entail additional unilateral concessions from developing countries."

Against this backdrop, it is a telling commentary on the state of play at the World Trade Organization in which the African Group of countries are given a raw deal as none of their issues in agriculture are being addressed, sources said. +