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TWN
Info Service on WTO and Trade Issues (Jul21/11) Geneva, 12 Jul (D. Ravi Kanth) – The African Group on 12 July called for a robust agreement on the permanent solution for public stockholding (PSH) programs for food security in developing countries at the WTO’s 12th ministerial conference (MC12) to be held in Geneva in end-November, said people familiar with the development. At a time when the much-delayed mandated permanent solution for PSH programs does not even figure in the WTO Director-General’s list of “deliverables”, which includes fisheries subsidies among others, the African Group appears to have reminded the DG, Ms Ngozi Okonjo-Iweala, that food security based on an exemption from the WTO’s “asymmetrical” subsidy disciplines are critical for the credibility of the WTO, said people, who asked not to be quoted. The DG has tasked one of her four deputy director-generals (DDGs), Mr Jean-Marie Paugam, to deliver on “agriculture,” “domestic support,” “Dispute Settlement Body”, “trade and environmental sustainability”, and “plastics” for MC12. Surprisingly, the DG has not included any “deliverable” on the permanent solution for PSH programs, which was blocked by the United States at MC11 in Buenos Aires, Argentina, in December 2017. Significantly, the African Group’s call for an expansive permanent solution for PSH programs appears to be a litmus test for the Cairns Group of farm exporting countries led by Australia. The Cairns Group recently issued a joint statement with the African Group on agriculture for MC12. Up until now, the Cairns Group has consistently opposed the permanent solution for PSH programs, said a trade envoy, who preferred not to be quoted. AFRICAN GROUP’S DRAFT MINISTERIAL DECISION In a six-page restricted document (Job/Ag/204) issued on 12 July, and seen by this writer, the African Group highlighted in graphic detail the perceived imbalances in the WTO’s Agreement on Agriculture (AoA) concerning the conditions attached to public stockholding programs for food security, and the dynamics of the negotiations on the PSH issue. The African Group pointed forcefully to the seemingly flawed calculation of public stockholding programs under the so-called “green box” based on external reference prices in 1986-88 in the AoA due to the failure to take into account the changes that have taken place in the global economy since then. It argued that “calculating current subsidies based on 1986-88 prices overestimates the subsidy” while the method of calculation fails to take inflation into account. It drew attention to the G-33 coalition’s proposal on food security at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013, followed by the General Council’s decision on PSH (WT/L/939) in November 2014, as well as the mandate that was reaffirmed at the WTO’s tenth ministerial conference in Nairobi, Kenya, in December 2015. According to the African Group, the Bali “peace clause” on PSH contains several deficiencies. They include: “First, its scope is restricted to existing programmes as of the date of the Bali Ministerial Decision in December 2013; second, it is restricted to traditional staple food crops; third, it has very onerous transparency and notification requirements, which are extremely difficult for developing countries and least-developed countries (LDCs) to meet and are far above the requirements for the use of the Green Box; fourth, it has sweeping anti-circumvention and safeguard conditions, which makes it impossible to use – while safeguards may be useful, they should not make the instrument itself unusable.” Therefore, “an improved and a permanent solution that covers all programmes and all products, which is effective and at the same time balanced, is absolutely necessary,” the African Group argued. The African Group cited a 2020 Food and Agriculture Organization (FAO) policy brief on the coronavirus pandemic, which stated that “government procurement and public distribution can be important expedients to preserve food system functioning and avoid food price inflation.” The FAO brief also called for “social protection” for smallholder farmers and their families whose numbers include more than two billion of the world’s poorest and most vulnerable people and food workers in all sectors. It cautioned about the growing number of chronically food-insecure people to the tune of 820 million due to the worsening pandemic. In the face of the worsening conditions in the farm sectors in developing and least developed countries due to the pandemic and the increasing immiseration and rising levels of absolute poverty, several developing countries – Egypt, India, Indonesia, Pakistan, and Zambia – used PSH programs to boost “food stocks and minimum income for their farmers during the COVID-19 pandemic.” Therefore, it is imperative that developing countries need to be able to “subsidize farmers and domestic production through price support in order to support consumers,” the African Group argued. The developing countries, according to the African Group, “do not support production; they cannot ensure supply especially as there has been a fear of export restrictions on food during the pandemic.” In short, “it is important to note that many countries will be unable to [achieve] food security and livelihood security if constrained by AoA rules,” the African Group contended. CENTRAL ELEMENTS OF DRAFT MINISTERIAL DECISION The African Group argued that “there is a need for a permanent outcome on public food stockholding programmes that is responsive to the needs of developing countries to pursue their objectives of food security in an effective manner and providing for anti-circumvention and safeguard mechanisms that are not burdensome on the one hand, while ensuring that the mechanism could be used as a tool for food security objectives, on the other.” The central elements of the proposed draft ministerial decision include: 1. The Agreement on Agriculture (AoA) shall be amended by including a new Annex 6 as provided in Attachment 1 of this Decision and for consistency purposes amendments as provided in Attachment 2 (to this Decision); 2. The Protocol of Amendment, as provided in Attachment 3 to this Decision is hereby adopted and submitted to the Members for acceptance; 3. The Protocol shall hereby be open for acceptance by Members; 4. The Protocol shall enter into force in accordance with the provisions of paragraph 3 of Article X of the WTO Agreement. 5. Pending entry into force of the Protocol and the amendment, Members shall not challenge through the WTO Dispute Settlement Mechanism the compliance of a developing country Member or least developed country member with its obligations under Articles 6.3 and 7.2(b) in relation to public stockholding programmes for food security purposes and in relation to any product covered thereof. In conclusion, the battle-lines are being drawn on the permanent solution for PSH programs in developing and least-developed countries. Failure to agree on the permanent solution for PSH programs will further erode the credibility of the WTO, and its refusal to serve the interests of the developing and least-developed countries, said people, who asked not to be quoted.
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