TWN Info Service on WTO and Trade Issues (Nov19/21) 
29 November 2019
Third World Network

African Group calls for development outcomes at MC12
Published in SUNS #9028 dated 27 November 2019

Geneva, 26 Nov (D. Ravi Kanth) - The African Group has called for "meaningful development outcomes" in agriculture at the World Trade Organization's twelfth ministerial conference (MC12) in Nur Sultan, Kazakhstan, in June 2020.

In a comprehensive three-page proposal (JOB/AG/173), circulated at the Doha negotiating body on agriculture on 25 November, the African Group has called for substantial reductions of trade-distorting domestic subsidies, and accords on cotton, public stockholding programs for food security, and the special safeguard mechanism for developing countries.

At the ongoing discussions on what ought to be the deliverables in agriculture at the WTO's twelfth ministerial conference, the African Group stuck to the core issues of the unaddressed Doha agriculture package.

Notwithstanding the sustained efforts of the United States and other major developed countries to bury the Doha Development Agenda (DDA) negotiations, the African Group has reiterated that "the negotiations on Agriculture in the DDA" are of "paramount importance" for addressing "food security, employment, income and mere existence" in African countries.

In its comprehensive proposal, the African Group reiterated once again "its position that discussions on reforming the Agreement on Agriculture (AoA) in particular and the World Trade Organization in general shall be revolving around the means to make the rules more development-oriented and responsive to the challenges our continent is facing."

"Therefore, our priority in Agriculture negotiations is to correct the historical imbalances in the AoA [Agreement on Agriculture] in a manner that would enable our countries to respond to the challenges of food security compounded by climate change," the African Group insisted.

As a first step, "substantial reductions of trade-distorting Domestic Support as stipulated in Article 20 of the AoA and as per the Doha mandate is a priority for Africa" because of the numerous problems being faced by its small farmers in keeping up with "unfair competition" from heavily-subsidized imports, the African Group said.

Commenting on the most-trade distorting domestic subsidies, particularly the huge product-specific support being provided by major farm subsidizing developed countries, the African Group proposed that "members with scheduled AMS entitlements shall apply a cap on their product-specific support beyond de minimis based on the average of the last three years' figures notified to the Committee on Agriculture."

The African Group proposed that the "commitment will be made to further reduce the amount of product-specific support beyond de minimis as a percentage of the product's value of production (VoP), with a view to reaching the percentages stipulated in Article 6.4 of the AoA by the year XXXX."

It asked of the major subsidizing countries that "products subject to product-specific support which is on average during the last three years notified to the Committee on Agriculture below de minimis, shall not receive support in excess of the values stipulated in Article 6.4 of the AoA."

As regards the trade-distorting Blue Box support prevalent in the US and the EU among others, the African Group proposal said "members commit to set a specific end date for the existing programs classified as Blue Box support under Article 6.5 of the AoA and notify it to the Committee on Agriculture. End dates of all programs under this box shall be no later than the year XXXX."

"Upon the notified end date, any continuation or renewal of existing (blue box) programs as well as any new programs shall not be exempted from reduction commitments," the African Group said.

With the pervasive "box-shifting" being carried out by major developed countries, who had shifted billions of dollars of trade-distorting subsidies to the green box that are exempted from reduction commitments, the African Group said "stricter disciplines - as stipulated in paragraph 5.3 below - are to be applied on the usage of support provided for in paragraphs 5-13 of Annex 2 to ensure that it meets the criteria of being not or minimally trade distorting."

More importantly, the African Group called for "a cap to be applied on the usage of the Green Box support with respect to measures within the scope of paragraphs 5-13 of Annex 2 of the AoA."

The Group demanded that "special and differential treatment to developing countries shall be an integral part of any outcome."

"LDCs (least-developed countries), NFIDCs (net food importing developing countries) and Developing Members with no scheduled AMS entitlements shall be exempted from any further reduction commitments," the African Group said.

Referring to cotton which "is a central development issue and must be resolved ambitiously, expeditiously and specifically" as per the 2005 Hong Kong Ministerial Declaration, the African Group called for pursuing negotiations in "an accelerated manner on the basis" of the proposals made by the four West African countries.

Significantly, the African Group demanded a Permanent Solution for PSH (public stockholding) by developing countries "be agreed latest by MC12" for fighting hunger in most of the countries.

It insisted that "programs under the Permanent Solution are to be excluded from the calculation of Members' Aggregate Measurement of Support."

"The Permanent Solution shall cover existing as well as future PSH programs for foodstuffs, and it shall not define a ceiling to the quantity or value procured," the African Group emphasized, suggesting that developing countries "undertaking programs under the Permanent Solution shall ensure that stocks procured under such programs do not distort trade or adversely affect the food security of other Members."

"In addition, developing Members undertaking programs under the Permanent Solution shall ensure that no exports are made from products benefiting from this provision," the African Group said.

On another outstanding issue concerning the special safeguard mechanism (SSM), the African Group said its members "have been subject to massive and repetitive import surges, resulting over the years and in the absence of any means to safeguard the market, in substantial reductions in production mounting in some cases to more than 50% decrease, and the loss of numerous jobs."

The SSM, according to the African Group, "shall cover both price-based and volume-based triggers with no a priori product limitations as to its availability, and it shall be easily applied by developing countries, with flexible time limits for application to address the needs of the developing Member utilizing the mechanism."

Further, the African Group said that "the operation of the SSM shall be carried out in a transparent manner, and the Member invoking the SSM should afford any interested Member the opportunity to consult with it in respect of the conditions of application of the measure. Transparency requirements shall be conducted in a manner that would not impose onerous burden on developing countries and especially LDCs and NFIDCs."

The Group urged members "to intensify the discussions in the dedicated session on SSM of the Committee on Agriculture in Special Session with the view of concluding the negotiations on the SSM by MC12."

At a time when Australia, Brazil, and other major countries of the Cairns Group of farm exporting countries are attempting to undermine the "developmental dimension" for correcting the historical imbalances and asymmetries in global agriculture, it remains to be seen how determinedly the African Group will fight for its priorities in agriculture.