WTO: 2013 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:

The concerns were particularly about stockholding of rice in Thailand and India, wheat in India, soybeans and other products in Indonesia, and cotton in China. They were expressed during routine questions and answers on a range of issues related to countries implementing their commitments on trade barriers and subsidies in agriculture. (More below)

Meanwhile, food aid deliveries remain at their lowest levels since 1990 despite a slight increase in 2012 to 41 million tonnes, the committee heard. The figures from the World Food Programme were cited in a WTO Secretariat document (G/AG/W/42/Rev.16) presented to the committee as part of its annual monitoring of the situation for net food-importing developing and least developed countries (explained here).

Food security remains a concern as the world recovers from the 2007-2008 food crisis, and new international initiatives continue to be created, the paper reports, including the “Zero Hunger Challenge” that the UN High-Level Task Force on the Global Food Security Crisis adopted as its central theme of work in 2013–2014.

Contributing to the discussion, the UN Food and Agriculture Organization reported slight declines in countries’ expected food import bills in 2013, both globally and among least developed and low-income food deficit countries. However, the declines were more modest for cereals and oilseeds than for vegetable oils and animal fats, while dairy products and meat were increasing, the FAO said (document G/AG/GEN/114).

FAO Food Price Index
1990–2013

* The real price index is the nominal price index deflated by the World Bank Manufacturers Unit Value Index (MUV)
Source: AMIS, in WTO document G/AG/GEN/114

 

Some detail

The comments about countries’ stockholding were part of a broader series of questions and answers about countries’ agricultural trade policies. The questions and answers are now available in a database, the Agriculture Information Management System (http://agims.wto.org), and each question is identified by a code, AG-IMS ID XXXXX, where the Xs represent numbers.

One of the key responsibilities of the “regular” Agriculture Committee, which consists of all 159 WTO members (and does not deal with the current agriculture negotiations), is to see how countries are complying with their commitments on subsidies and market access and to discuss issues that arise.

It monitors whether members are keeping the promises they made as a result of the 1986–94 Uruguay Round negotiations or their membership deals if they joined the WTO later. Much of this is based on information that members share by notifying the WTO. Members can and do also ask about agricultural measures that have not yet been notified.

As usual, the most detailed questions and answers were about domestic support as members sought to understand each other’s programmes and their categorization under the Amber Box (domestic support that distorts trade and is therefore limited with reduction commitments) or the Green Box (which normally does not distort trade and has no limits).

The questions and answers can be found here when they have been processed.

The committee also monitors agricultural trade in general, and this meeting received the latest report on countries’ shares of trade for various commodities, in document G/AG/W/32/Rev.14 (104 pages).

 

Stockholding and domestic support

Concerns about stockpiles possibly affecting other countries and world markets in general were related to some governments’ policies designed to improve food security, support farmers’ incomes or stabilize prices.

India was questioned about its new Food Security Bill (AG-IMS ID 71015). This includes providing subsidized cereals to poor sections of its populations and has expected implications for the government’s stockpiling of rice and wheat. India declined to comment at this stage on the target purchase quantities and the effect on markets because the bill has not yet been implemented. Countries seeking more information were: Canada, Pakistan and the US.

Thailand was asked about its rice subsidies under a “paddy pledging” scheme — unmilled rice (paddy) is used as collateral for loans, which farmers can forfeit if prices do not meet the target (AG-IMS ID 71033). Thailand said the objective is to support farmers who have lower incomes than people in other sectors.

It was pressed to notify the domestic support given under the scheme but said information-gathering is being coordinated by its government agencies but more time will be needed to notify it.

Countries expressing concern for both “systemic” reasons (whether Thailand would exceed its limit and when it would share information), and for market reasons (whether released stocks would depress prices) were: Canada, the US, Australia, Pakistan and the EU. Pakistan said it is particularly concerned because it has millions of rice farmers who do not receive subsidies but could be affected.

The question about China’s stockholding was among a number dealing with its domestic support for cotton (AG-IMS ID 71029). The US, supported by Australia, asked China for information on these since the current programme was introduced after 2008, the latest period covered in China’s notification to the WTO. The US asked how China would manage its large stocks without affecting world markets.

China said information is available on government websites and that the stocked cotton would be released on the domestic market and would not affect exports.

 

Sharing information

The chairperson reported that members submitted 21 new notifications since the last meeting in June.

The committee heard that the backlog of notifications not received has increased slightly since then. Almost half (44%) of notifications on domestic support, the most complicated area of work, are overdue, while 40% of notifications on export subsidies are overdue.

Members are more up-to-date on notifications on tariff quotas (where duties on shipments inside the quotas are lower than those outside), and on temporary increases in tariffs known as special safeguards, but even there the backlog is creeping up from 11% to about 14–15%.

Keeping up to date with notifications is important for the committee’s role in monitoring agricultural trade policies. It can also be important for the current agriculture negotiations where the information can be used to assess the real-world implications of abstract proposals.

Overdue notifications
for period 1995–2012

Source: document G/AG/GEN/86/Rev.15

Three related issues were discussed in informal consultations before the meeting. Chairperson Guilherme Marquardt Bayer of Brazil reported on these.

One is a US proposal to improve transparency on export restrictions — since the WTO was created in 1995, eight members have notified export restrictions when a considerably large number are reported to have been implemented in recent years.

A second is a Canadian proposal to improve the transparency of domestic support calculations when members take high rates of inflation into account.

A third is continuing consultations on updating a list of “significant exporters” used to monitor export volumes and detect whether the exports might be subsidized. The chairperson reported members seemed to be moving closer to a solution on how to modify the notifications so that the export products that countries notify are easier to compare. Further discussions are needed, he said, on possible changes to the list of products which would be used for identifying significant exporters. (The issue is explained here.)

Meanwhile, the EU also reported on Croatia joining the European Union. This will involve including Croatia in its notifications, and negotiating new overall commitments for the 29 states (known as GATT Article 24 negotiations).

 

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Chairperson: Mr Guilherme Marquardt Bayer (Brazil)

 

Next meetings

(Could be changed)

  • 29 January 2014 (postponed from November 2013 because of the Bali Ministerial Conference)
  • 14 March 2014
  • 6 June 2014
  • 13 November 2014

 

 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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