PRESS BRIEF

MEASURES CONCERNING THE POSSIBLE NEGATIVE EFFECTS OF THE URUGUAY ROUND AGRICULTURAL REFORM PROGRAMME ON LEAST-DEVELOPED

AND NET FOOD-IMPORTING

DEVELOPING COUNTRIES

    In the course of the Uruguay Round negotiations on agriculture, a group of net food-importing developing countries raised concerns that the benefits of agricultural trade liberalization and reform could be diminished or outweighed in the short to medium term as structural surpluses in many developed countries declined and world market prices recovered from the artificially low levels that had prevailed as a result of dumping and extensive use of export subsidies.

    In response to these concerns, and as an integral part of the Uruguay Round outcome, Ministers at Marrakesh in April 1994 adopted a Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (the NFIDC Decision).

    While recognizing that implementation of the results of the Uruguay Round as a whole would benefit all participants, the NFIDC Decision also recognizes that during the reform programme leading to greater liberalization of trade in agriculture least-developed and net food-importing developing countries may experience negative effects. Specifically, problems may arise which pertain to the availability of adequate supplies of basic foodstuffs from external sources on reasonable terms and conditions, including short-term difficulties in financing normal levels of commercial imports of basic foodstuffs. The NFIDC Decision accordingly establishes mechanisms which provide for: (i) review of the level of food aid and the initiation of negotiations in the appropriate forum to establish a level of food aid commitments sufficient to meet the legitimate needs of developing countries during the reform programme; (ii) the adoption of guidelines on concessionality; (iii) financial and technical assistance under aid programmes to improve agricultural productivity and infrastructure; and (iv) differential treatment in the context of an agreement to be negotiated on agricultural export credits. The NFIDC Decision also takes into account the question of access to the resources of international financial institutions under existing facilities, or such facilities as may be established, in order to address short-term difficulties in financing normal levels of commercial imports.

    Under the Agreement on Agriculture (Article 16:1) developed country Members of the WTO are required to take action provided for within the framework of the NFIDC Decision. The role of the WTO Committee on Agriculture is to monitor, as appropriate, the follow-up to NFIDC Decision. This is an exercise undertaken annually at the regular November meeting of the Committee on the basis, inter alia, of notifications submitted by Members relating to actions taken within the framework

of the Decision in areas such as food aid and technical and financial assistance under the aid programmes. The international intergovernmental organizations represented in the Committee (such as the FAO, the UN World Food Programme, the International Grains Council (Food Aid Convention), the IMF and the World Bank) also contribute to this monitoring exercise.

    Sixty-four developing countries are currently eligible as beneficiaries of the NFIDC Decision on the basis of a list established by the WTO Committee on Agriculture. This list comprises the forty-eight least-developed developing countries as recognized by the UN Economic and Social Council plus the following sixteen developing country WTO Members which notified their request to be listed and have submitted relevant statistical data concerning their status as net-importers of basic foodstuffs during a representative period: Barbados, Côte d'Ivoire, Dominican Republic, Egypt, Honduras, Jamaica, Kenya, Mauritius, Morocco, Peru, Saint Lucia, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia and Venezuela.

    The provisions of the NFIDC Decision are subject to regular review by the WTO Ministerial Conference. For this purpose the Committee on Agriculture's report on the NFIDC Decision sets out the following recommendations for adoption by the Singapore Ministerial Conference:

    (i)    that, in anticipation of the expiry of the current Food Aid Convention in June 1998 and in preparation for the renegotiation of the Food Aid Convention, action be initiated in 1997 within the framework of the Food Aid Convention, under arrangements for participation by all interested countries and by relevant international organizations as appropriate, to develop recommendations with a view towards establishing a level of food aid commitments, covering as wide a range of donors and donable foodstuffs as possible, which is sufficient to meet the legitimate needs of developing countries during the reform programme. These recommendations should include guidelines to ensure that an increasing proportion of food aid is provided to least-developed and net food-importing developing countries in fully grant form and/or on appropriate concessional terms in line with Article IV of the current Food Aid Convention, as well as means to improve the effectiveness and positive impact of food aid;

    (ii)    that developed country WTO Members continue to give full consideration in the context of their aid programmes to requests for the provision of technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure;

    (iii)    that the provisions of paragraph 4 of the Marrakesh Ministerial Decision, whereby Ministers agreed to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least-developed and net food-importing developing countries, be taken fully into account in the agreement to be negotiated on agricultural export credits;

    (iv)    that WTO Members, in their individual capacity as members of relevant international financial institutions, take appropriate steps to encourage the institutions concerned, through their respective governing bodies, to further consider the scope for establishing new facilities or enhancing existing facilities for developing countries experiencing Uruguay Round-related difficulties in financing normal levels of commercial imports of basic foodstuffs.


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