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Info Service on WTO and Trade Issues (Feb24/05) Geneva, 5 Feb (D. Ravi Kanth) — The discussions on the Doha agriculture chair’s draft text on domestic support, market access, and the special safeguard mechanism (SSM) held on 1-2 February in a seemingly cordial and constructive ambiance, reinforced persisting unbridgeable differences among members ahead of the World Trade Organization’s 13th ministerial conference (MC13) beginning in Abu Dhabi in just about three weeks’ time, said people familiar with the development. During the meeting on 1 February, the WTO Director-General, Ms Ngozi Okonjo-Iweala, briefly addressed members urging them to cooperate with the chair and arrive at what she called a “historic” outcome in agriculture, an area in which the United States has blocked an outcome since July 2008, said people familiar with the discussions. The discussions, which are expected to continue on export restrictions and a few other issues on 5 February, could force the chair to issue a revised draft text on 6 February based on the broad recommendations emerging on domestic support, market access, the special safeguard mechanism (SSM) for developing countries, the permanent solution for public stockholding (PSH) programs for food security, and export restrictions among others, said people familiar with the development. Significantly, the US and several members of the Cairns Group of farm-exporting countries appear to have differed sharply with the European Union and Japan on domestic support and market access. The African Group and India seem to have sharply opposed the US proposals on domestic support and market access, particularly on Article 6.2 of the Agreement on Agriculture (AoA) dealing with the “development” box for developing countries, said people familiar with the discussions. The US position on the permanent solution for PSH, in which Washington sought the deletion of the chair’s first option while adopting the second option, drew massive opposition from a large majority of developing countries from the African Group, the G33, and the ACP (African, Caribbean, and Pacific) group, said people familiar with the development. Brazil, which had championed the developmental goals of the developing countries under the banner of the G20 at the WTO’s fifth ministerial conference in Cancun, Mexico in 2003, appears to have adopted the same stance as the US on PSH, preferring the deletion of the chair’s first option while seeking to work on the second option, said people present at the meeting. In his draft text issued on 27 January, the chair proposed two options: “29. [Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members adopt a permanent solution as set out in Annex … to this Decision]. OR 29. [Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members undertake to pursue and intensify negotiations on PSH in dedicated sessions of the CoA-SS and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes by MC14. The permanent solution shall be available to all developing country Members.]” The developing countries rallied behind India when it proposed an annex to be attached to the chair’s first option at the meeting on 2 February (see annex below). DOMESTIC SUPPORT On 1 February, members discussed the language proposed in the chair’s draft text on domestic support, market access, and the special safeguard mechanism. The DG, Ms Okonjo-Iweala, who spoke briefly during the discussion on domestic support, appears to have urged members to cooperate with the chair in finalizing a “historic” outcome on agriculture, said people who asked not to be quoted. During the discussion on domestic support, members largely stuck to their longstanding positions. For example, the US suggested that all forms of domestic support should be discussed without excluding any payments, a position also held in varying levels of emphasis by the members of the Cairns Group, said people present at the meeting. In sharp opposition to the US position, members of the African Group seem to have made it clear that the group needs “policy space” and opposed any attempt to subject Article 6.2 of the Agreement on Agriculture (AoA) to reduction commitments, said people who took part in the meeting. Following intense discussion on each paragraph, the proposed language of the stance adopted by different members seems to be clubbed together into paragraphs. The proposed language at the end of the discussion on domestic support proposed by the Cairns Group appears to be somewhat along these lines: “Members commit to pursue and intensify negotiations on domestic support to [cap/limit and] reduce substantially [proportionately, universally] and progressively [and address] [all forms of/each variety of/every type] trade [and production] distorting domestic support [by an agreed reduction target] in an equitable manner and also improve disciplines in accordance with the reform objective in the AoA and [with an objective to promote repurposing of subsidization programs to less trade distorting forms] [within reasonable timeframe to be agreed by members]/[by [2030]]. [Members agree to work towards adopting modalities by MC14.]” In sharp contrast, the African Group and India are understood to have proposed the need to “[preserve the policy space afforded to the developing countries under Article 6.2 for low income and resource poor farmers],” said people familiar with the discussions. Many developing countries also called for addressing “[existing asymmetries and imbalances in the WTO Agreement on Agriculture by eliminating the final bound AMS (aggregate measurement of support or the most trade-distorting support) within a reasonable timeframe to be agreed by members. Modalities regarding the elimination of FBT AMS entitlements shall be established by the Members with special and differential treatment duly considering the socioeconomic realities of the farm sectors across different levels of development and adopt a per farmer-based approach.]” MARKET ACCESS The US and several members of the Cairns Group appear to be the major demanders on market access. However, the G10 group of farm-defensive countries and the EU, as well as several developing countries remained opposed to the proposals on market access, said people familiar with the discussions. The US seems to have struck a discordant note at the meeting by demanding parity between domestic support and market access, a demand that seems to have drawn little support from the rest of the members at the meeting, said people, who asked not to be identified. It appears that Korea reminded members that food security sensitivities should be kept in mind in the market access discussions, said people familiar with the discussions. The differences among members seem to have been reflected in the following lines: “[[These negotiations [may address]/[shall consider addressing] tariff reductions [and other elements such as tariff simplification, tariff escalation, high tariffs and tariff peaks, transparency in changes of applied tariffs, tariff rate quotas, [and] special agricultural safeguards, [preference erosion], [and special safeguard mechanism as detailed in paragraphs … below,] and take into account the interests [and sensitivities] of both importing and exporting Members [including of developing country Members]].] [The sensitivities and food security aspects of importing countries shall be taken into account in these negotiations.] Technical discussions on relevant market access elements [and Members’ proposals] shall support these negotiations, as necessary, to facilitate effective participation by all Members and a common understanding on the elements to be addressed in negotiations.]” The US appears to have proposed that “[Members’ contributions to the reduction of protection should be fair and equitable and take into account, inter alia, their global market participation, their status as either importers or exporters, and the needs of developing Members, as well as the need to encourage a shift towards less trade and production distorting measures.]” PSH During the discussion on the permanent solution for public stockholding (PSH) programs for food security, the sharp division between a large majority of developing countries led by India on the one side, and the US and the Cairns Group of farm-exporting countries on the other, came into the open, said people who asked not to be quoted. The US and Paraguay seem to have adopted a hardline stance against the chair’s first option. It appears that the US, Paraguay, and Brazil among others called for the deletion of the first option, said people familiar with the discussions. However, India, with the support of many developing countries, proposed an annex to be attached to the first option. The text of the annex is as follows: “The 13th Ministerial Conference, Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization; Taking note of the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38-WT/L/913), the General Council Decision of 27 November 2014 (WT/L/939) and the Ministerial Decision of 21 December 2015 (WT/MIN(15)/ 44-WT/L/979); Reiterating our deep concern regarding the exacerbation of Global Hunger, predominantly in the developing countries; Recognizing the importance of public stockholding for food security purposes for developing country Members in the fight against hunger, including Least-Developed and Net Food-Importing Developing Countries (NFIDCs); Decides: 1. Members hereby agree and adopt the permanent solution for the use of public stockholding for food security purposes by developing country Members. 2. Notwithstanding any provision of the Agreement on Agriculture (AoA), domestic support provided by a developing country Member pursuant to public stockholding programmes for food security purposes, shall be deemed to be in compliance with Articles 3.2, 6.3 and 7.2(b) of the Agreement on Agriculture (AoA), provided that the conditions set out in paragraphs 5 to 9 of this Decision are met. 3. Where public stockholding programmes for food security purposes of a developing country Member include programmes under which stocks of foodstuffs are acquired and released at administered prices, then, for the purposes of footnote 5 of Annex 2, the Aggregate Measurement of Support (AMS) shall be calculated based on the actual quantity of foodstuffs acquired at administered prices, and the external reference price in this regard shall be either of the following: (a) the three-year average price (f.o.b for a net exporter or c.i.f for a net importer) based on the preceding five- year period excluding the highest and the lowest entry for that product; or (b) adjusted for excessive inflation as per the methodology given in Appendix B. 4.1 This Decision does not preclude developing country Members from introducing public stockholding programmes for food security purposes in accordance with the relevant provisions of the Agreement on Agriculture. 4.2 For greater clarity, paragraphs 5 to 9 of this Decision applies when a developing country Member concerned exceeds the applicable Aggregate Measurement of Support (AMS) limits under the AoA, i.e., the Member’s Bound Total AMS or the de minimis level, as applicable, as a result of the public stockholding programmes for food security purposes covered under paragraph 2 of this Decision.” +
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