WTO: 2014 NEWS ITEMS

AGRICULTURE: REGULAR MEETING

Updated 11 February 2014: The explanation of the conditions on developing countries’ stockholding has been corrected, including to remove the erroneous statement that the support would not have to be calculated as trade distorting domestic support. The date of the next meeting is now 21 March.


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 work on the Bali decisions underscores the regular committee’s importance as the body handling the implementation of agreements and decisions on agriculture after negotiations in “special sessions” are completed.

The Bali decisions include:

The committee’s task is to oversee how these are being implemented and to undertake other work set out in the decisions, and it is now developing plans for the monitoring, reviews and responsibilities, with work on export competition — essentially preparing information to examine latest developments — starting almost immediately. (Details below.)

Meanwhile, actual or possible breaches of domestic support commitments in Costa Rica, Thailand and India continued to feature among the questions members asked each other in the meeting about how they are implementing their present commitments on agricultural subsidies and market access for farm products. Some of the questions may have implications for the Bali decisions, particularly the one on stockholding for food security. (Details below.)

 

Some detail

(This meeting was postponed from November 2013 because of work in the lead up to the Bali Ministerial Conference in December.)

Follow-up on the Bali decisions

Members first discussed how to deal with the Bali decisions in an informal meeting on the previous day (28 January). Chairperson Guilherme Marquardt Bayer of Brazil reported on the consultations to the formal meeting on 29 January, and some members went on the record with further comments.

Several members want as much of the post-Bali tasks to be undertaken as quickly as possible so that members can focus on the other issues in the Doha Round agriculture negotiations over the coming months. The remainder of this year’s regular committee meetings will be in March, June and November.

 

Export competition. The committee’s work will begin almost immediately on compiling the information required to support the declaration on restraining export subsidies. The Secretariat will circulate a questionnaire according to details set out in the declaration. Based on members’ responses, the Secretariat will circulate the information to members so that the committee can examine the latest situation at its June meeting, the chairperson said. Information will also be drawn from information on their own export subsidies that members have to supply in notifications to the WTO.

The Bali declaration requires the examinations to be undertaken every year. The one to be held a year later, in June 2015, will be suitably timed to prepare for the review at the next Ministerial Conference later in the year as required in the declaration, the chairperson said.

The declaration (explained here) is the strongest political statement since the 2005 Hong Kong Ministerial Conference on export subsidies and related policies. Members agree to “exercise utmost restraint” in using any form of export subsidy, to “ensure to the maximum extent possible” that progress will be made in eliminating all forms of export subsidies, that actual subsidies will be well below the permitted levels, and that disciplines will apply to export policies that may have the same effect as subsidies.

 

Tariff quota administration . The committee also has a role in monitoring particular tariff quotas (or tariff-rate quotas, TRQs — where the tariff on quantities outside the quota are higher than on quantities inside) when one member’s quotas are repeatedly under-filled (imports fall short of the quota limit by 35% or more). The committee does not have to review this decision until after four years.

If another member believes that the shortfall is caused by the way the quota is shared out among traders (“quota administration”), it can trigger a number of steps, including asking for information from the country that has the quota. If it is a developed country it may have to change the way it administers the quota. The Agriculture Committee has to monitor how members are living up to their obligations, under this decision, and that task will only begin when members initiate the monitoring the administration of particular quotas as spelt out in the decision, the chairperson said. (The decision is explained here.)

 

Public stockholding for food security. Again, the decision sets out two parts to the committee’s work. One is handling the information that developing countries are required to supply if they want to use the decision. This is spelt out in the text and its annex.

Provided other conditions are also met, members have promised not to challenge breaches of domestic support commitments resulting from when developing countries use public stockholding for food security programmes. As well as the need to supply information, these conditions include the country using the policy having to avoid distorting trade or causing adverse effects on other countries’ food security.

The decision is “interim”, until a permanent solution is agreed. The committee’s second task relates to a work programme aimed at making recommendations for a solution at the Ministerial Conference in 2017. The decision says this work programme should be undertaken in the “Committee on Agriculture”.

Some members queried whether this means the regular committee (since other decisions specifically refer to the committee in “special sessions”, the term used for negotiations meetings), or the committee meeting in “special sessions”.

The decision is explained here. Meanwhile, some of the questions asked in the routine sections of the agenda were also related to stockholding and whether trade-distorting support is involved.

 

Questions, answers and notifications

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 or have not been notified at all.

Out of 33 questions or sets of questions in this meeting, 15 were about information available elsewhere that has not yet been notified, and 18 were about some of the 43 notifications that members submitted since the last meeting in September 2013 on their programmes.

All the questions for this meeting (except one late query from the US) can be found in document G/AG/W/116 (pdf). Questions and answers from all meetings are compiled in the Agriculture Information Management System database, and each question is identified by a code, AG-IMS ID XXXXX, where the Xs represent numbers (for questions in this meeting, use meeting number 72). These are a selection:

 

Costa Rica’s breach of its “Amber Box” domestic support commitment. (AG-IMS ID 72005 and AG-IMS ID 72050.) Costa Rica said it has to delay by a year the new policy that would bring its trade-distorting domestic support for rice within its WTO commitment.

The breach of up to six times Costa Rica’s limit was first discussed in the committee in 2009. Costa Rica announced in June 2013 that the price support for rice that had caused it to exceed its limit by up to six times would be replaced in March 2014, but in this meeting Costa Rica said it would have to delay this until March 2015, because the rice sector needs more time to adjust.

Australia, Pakistan, the US, EU, Canada, Uruguay and the Philippines, nevertheless praised Costa Rica for providing information promptly from the start, for meeting with them to explain the situation and for its efforts to bring its policies into line.

 

Thailand’s paddy pledging scheme. (AG-IMS ID 72010 and AG-IMS ID 72056.) Once again, Thailand said it was unable to provide the information that members are seeking on the cost of loans to farmers based on high valuations of paddy (unmilled rice) brought into stocks. Some members fear the scheme could have an impact on their farmers if the stocks’ release depresses market prices. Thailand said political protests, which have shut down parts of Bangkok and government offices in January, have prevented officials from working on the data.

Australia pointed out that members have been asking for the information for several years. Pakistan said it is concerned because production subsidies can have a huge impact on other countries that cannot afford to compete or have already reformed. The questions came from Canada and the US and the EU and Philippines also said they were interested.

 

India’s wheat and rice stocks and exports. (AG-IMS ID 720008 and AG-IMS ID 72059 — the US question arrived late and is not in the database yet.) Canada and the US asked India about reports that India will export 2 million tonnes of wheat because of surplus stocks. Canada asked about reports that the floor price has been lowered to $260 per tonne (from $300), which is lower than Canadian export prices. The US calculated the cost of the wheat at the port would be $310 per tonne, considerably higher than the reported sale price of $260, and asked India to supply figures for the costs and the prices of the winning bids for three enterprises.

India said the actual sales prices ($279-$289) were higher than the floor price. It had only just received the US questions and would therefore supply figures on the costs in due course; the US asked for these before the next meeting in March.

Pakistan’s questions were about India’s rice export figures (India said 3.2 million tonnes of basmati and 3.5m of non-basmati in 2011/12; 3.9m of basmati and 6.6m of non-basmati in 2012/13) and the criteria for grading rice.

 

Other issues. Among the other policies questioned were:

  • Canada’s proposed changes to its tariff schedule (ie, list of tariff commitments in the WTO) for products containing cheese (AG-IMS ID 720049). Canada, whose various dairy policies have been questioned repeatedly over the years, said this would reduce exporters trying to get around tariff quotas for example by using packaging to reclassify products; the US, New Zealand and EU disagreed that exporters were trying to cheat and expressed concern about the proposed change and the timing of its implementation.
  • China’s domestic support for cotton. (AG-IMS ID 720052.) The US asked China to notify its domestic support. China said it is waiting for Beijing to reply.
  • Egypt’s export restrictions on rice. (AG-IMS ID 720054.) Egypt explained that this had been introduced in 2013 because of domestic need, and that Egypt is a net food importer. The US said here, and under a more general discussion on export restrictions, that WTO rules should be clarified to determine how to establish whether a country is a net exporter of a product. Developing countries do not need to notify export restrictions unless they are net exporters of the product, rather than of all food (Egypt said it has been a net importer of rice over the past few years).

Meanwhile, members remain concerned about the increasing backlog of notifications on subsidies and market access that have not been received despite their passing their deadlines. The US observed that a chart in the latest Secretariat paper on notifications shows a rising backlog (figure 4 of document G/AG/GEN/86/Rev.16, 22 pages).

Overdue notifications
developed, developing and least developed countries for period 1995–2012


Source: document G/AG/GEN/86/Rev.16

Having information available to assess countries’ measures and the more general situation, is becoming increasingly important under recent decisions, including those in Bali, and as members seek to strengthen their ability to monitor agricultural trade policies. Notifications are “overdue” if they are later than deadlines set out in a 1995 document, G/AG/2. For example, notifications on tariff quotas should be submitted within 60 days, and on domestic support and export subsidies within 60–120 days after the end of the relevant year.

Overdue notifications
by type of measure, for period 1995–2012
Source: document G/AG/GEN/86/Rev.16

 

‘Significant exporters’

Finally, the committee continued to consult informally on updating the list of “significant exporters”, a means of sharing information that helps members monitor whether exports might have hidden subsidies. The chairperson said that after five years of discussion, members have narrowed down their differences and he plans to conclude the talks at the next meeting in March after further consultation

 

Want more?

Chairperson: Mr Guilherme Marquardt Bayer (Brazil)

 

Next meetings

(Could be changed)

  • 21 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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