After the framework: technical work on export subsidies and competition
UPDATED 1 DECEMBER 2004
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This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.
With credit and insurance of over 180 days now to be phased out, the focus in this stage is on disciplines for programmes of 180 days or less. Topics covered in the technical consultations include: objectives and basic approach; types of support covered; entities giving credit and insurance covered by the disciplines; terms and conditions, such as minimum cash payments, interest payment, repayment of principal, minimum premium requirements, risk-sharing, self-financing of credit programmes, foreign exchange risk, validity period of offers for export financing. In the discussions, delegations broadly agree that a lot of work was done in the “Harbinson” text (the March/July 2003 draft “modalities”) and further efforts should build on this.
The objective is to avoid displacing commercial transactions, i.e. to provide food aid when commercial transactions are not possible; and not to obstruct bona fide food aid (although there was some discussion of the meaning of “bona fide”). Among the topics discussed: the role of international organizations in the disciplines such as determining whether there is a need for food aid and in delivering the aid, whether food aid must be in fully grant form (no credit, not tied to commercial transactions) or even only as money (which would be used to buy the food locally, regionally or globally), whether the food aid could be sold to raise funds for development (“monetization”), the prohibition of tied food aid, not allowing food aid to be re-exported (most agree to this), transparency, etc.
All agree that the objective is to find disciplines to ensure there are no subsidies. Issues covered include: the basic approach to disciplines; definitions of entities to be covered; specifying which practices distort trade (subsidies, government financing, underwriting losses, other elements); how to eliminate these (members generally agree that this would parallel phasing out export subsidies); transparency; future use of monopoly power; and special treatment for developing countries. Initially, with the focus on sorting out technical questions, the main differences with political implications are set aside although they are mentioned, e.g. practices such as price discrimination (which some defenders of single-desk exporters, say would apply to private companies as well), and monopoly power.