WTO: 2011 NEWS ITEMS

AGRICULTURE: FORMAL MEETING

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NOTE:
THIS NEWS STORY is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.

The official record is in the meeting’s minutes.

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explanation in “Understanding the WTO”

MINUTES:

It also continued to debate updating its list of “significant exporters” of the main traded products, a list that determines which countries have to notify their export volumes for the relevant products.

All of this came under the committee’s key responsibility monitoring how the Agriculture Agreement is being implemented, including notifications from WTO members on how they are applying their commitments on market access, domestic support, export subsidies and other topics in agriculture, and to discuss these when issues arise. Members can also ask about agricultural measures that have not been notified.

The questions and answers can be found here when they have been processed and derestricted after a few weeks.

 

Some details

These “regular” Agriculture Committee meetings deal with routine WTO work, and not the current negotiations, which take place in separate “special sessions”. The committee comprises all WTO members.

 

Export restrictions on food

A number of members remain concerned that export restrictions and taxes are affecting international markets and the ability of importing countries to obtain supplies, some saying the export taxes amount to a way of avoiding the disciplines on export restrictions. They praised countries introducing these measures for notifying the WTO but some said improvements can still be made in providing the information.

The changes notified since the committee’s last meeting March included Ukraine scrapping its export quotas for wheat and barley (notification G/AG/N/UKR/5/Add.3). Ukraine said the quota on rye and buckwheat remains although there is no decision to extend it. The abolished quotas have been replaced by export taxes to be charged until January 2012.

The Former Yugoslav Republic of Macedonia (notification G/AG/N/MKD/13) said it has temporarily banned exports of wheat flour in addition to an earlier ban on wheat. In practice, because the country is a net importer, the restriction would only apply to small amounts exported to neighbouring countries and would not affect world markets, FYR of Macedonia said.

A third notification from Moldova (notification G/AG/N/MOL/3/Add.1) announced that export restrictions on wheat have been repealed.

Countries expressing concerns about restrictions and taxes included Israel, Japan, the EU, the US and Switzerland.

Under WTO rules, countries can restrict exports of agricultural products but only temporarily and they have to comply with GATT Article XI (ie, 11), in this case paragraph 2(a), and with Article 12 of the Agriculture Agreement.

These require the restricting country to take into account the impact on importing countries’ food security, to notify the WTO as soon as possible, and as far in advance as possible, to be prepared to discuss the restriction with importing countries and to supply them with detailed information when asked for it.

 

Cotton

Cotton was raised twice. India wanted to know what the US was doing to reform its cotton subsidies so that they comply with WTO rules, following a dispute ruling (dispute DS267 on Subsidies on Upland Cotton). The US said is working with Brazil (which brought the case to the WTO) on a mutually agreed solution while new legislation is being prepared. Brazil said it shares India’s concerns about distortions. The solution it is discussing with the US is a temporary, second-best effort until the US can fully comply with the ruling, Brazil said.

The US, meanwhile asked when India would end its export restrictions on cotton. India said the measures come under the General Agreement on Tariffs and Trade and are not handled by the Agriculture Committee. The US said that because of the impact on cotton trade, the subject is the committee’s responsibility. Canada and Pakistan said they are also concerned.

 

Breaches of subsidy commitments

Costa Rica’s latest notifications show an increase in the distorting domestic support (AMS) which has exceeded its committed ceilings, breaches that were first discussed in the September 2010 meeting and raised again in subsequent meetings.

AMS is the type of domestic support that distorts trade the most, by raising prices in the country and stimulating production. It’s sometimes called “Amber Box” support.

Costa Rica’s latest notification for 2010 reports AMS support of $109.6m, $18m higher than for 2009 and considerably higher than the $15.9m ceiling it had agreed. The delegation explained that a new policy is being discussed in public consultations, with resistance from those fearing their profits would be eroded by the proposed shift away from price support to other subsidies that are not considered to distort the market.

The issue has become a court case, Costa Rica said. Nevertheless the government respects its obligations and will review the programme more urgently in order to bring the support within the committed limits, it said.

Other members praised Costa Rica for being transparent but said they continue to be concerned about breaches of commitments.

In some of the questions on other countries’ notifications, which showed rising support, some delegations cautioned that the increases should not be allowed to rise above committed ceilings.

 

Dairy

Three dairy issues discussed in previous meetings were raised again. On Canada’s ice cream promotion initiative, New Zealand questioned the pooled returns and shared promotion costs of the scheme, but Canada said this is a private confidential contractual agreement between an NGO (the Dairy Farmers of Canada) and individual ice cream processors, without any support from the government’s Canadian Dairy Commission.

Canada rejected New Zealand’s assertion that imports are affected by the modified “special milk classes” scheme to stimulate demand from Canadian dairy processors for domestic milk protein concentrates (MPCs) by cutting prices.

Australia repeated its concern that the US Dairy Import Assessment imposes a bigger burden on imported dairy products than on domestic products. The US said the burdens on both are minimal and that the result can be higher prices on imports through stimulated demand.

 

Other issues

Israel and the US complained that imports to Argentina of fruit and other perishable products are being delayed by bureaucratic processes. They cited their exporters. Switzerland said it is also concerned. Argentina said the allegations are “unfounded opinions that cannot be substantiated”.

Most of the other questions and answers dealt with details of various programmes or measures, including tariff quotas and why some were unfilled, and details of domestic support programmes.

Australia asked China, Egypt, India, Rep. of Korea and Turkey about their overdue notifications, and urged members to keep up-to-date in order to ensure transparency.

 

‘Significant exporters’

Consultations on a revised list of “significant exporters” compiled by the chairperson remain inconclusive. The issue arises from countries saying they are no longer significant exporters, cannot subsidize exports, and therefore should be removed from the lists — for example Cuba, the Philippines and Costa Rica are no longer a major sugar or fruit exporters. This would mean they no longer have to notify their export quantities to the WTO.

Members differ on complicated procedural questions, including whether the list of products should also be revised, which data should be used, and so on.

Significant exporters were defined in 1995 as countries whose share of total world exports in particular products exceeds 5%.

Countries that have commitments to reduce export subsidies are required to notify their export amounts in those products, whether they have subsidized or not. So do other countries listed as “significant exporters”, even though they cannot pay out any subsidies — because countries without reduction commitments cannot subsidize. This first update of the list would reflect changes in market shares, with some countries losing their 5% shares in some products and others gaining them.

 

Next meetings
(Could be changed)

2011

  • 29 September
  • 17 November

Chairperson: Mr Jonas Skei, Norway
 

 Jargon buster 

Place the cursor over a term to see its definition:

• Amber box

• Blue box

• de minimis

• Green box

• notification

• overall trade-distorting domestic support (OTDS)

• tariff quota

> More jargon: glossary

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