Ambassadors present

The chairperson, who is New Zealand’s ambassador, was reporting to the full membership on the consultations he has held with a number of delegations. These have focused on the stockholding and food aid proposal from the G–33 group of developing countries, one of three currently on the table in agriculture as issues that might be agreed at the 3–6 December 2013 Ministerial Conference in Bali ahead of other issues in the Doha Round talks.

The other two are a proposal from the G–20 group of developing countries active in agriculture on tariff quota administration (how governments share out quotas for lower-duty quantities among importers, and the possibility the methods might impede trade); and another, also from the G–20 on export subsidies and related issues grouped as “export competition”.

The increased political importance of this phase of the talks was reflected in the presence of ambassadors in some of the consultations, and as heads of many of the delegations in this 23 May informal meeting.

Ambassador Adank said he would continue consultations with the aim of an “even franker exchange of views”. He noted that time is running short before the Bali conference.

(The chairperson’s statements are below in audio and text.)

 

The proposal and the differences back to top

The G–33 proposal’s stated objective is food security. The main sticking points in it are about provisions that would allow developing countries’ governments to buy food at government-set prices (“administered prices”, which would therefore provide price support for producers) with the objective of stocking it for food security purposes or distributing it as food aid — without having to count it as trade-distorting support, which is subject to limits. (If the food were bought at market prices, the programmes would not be considered to distort trade.)

The G–33 argues that the way trade-distorting domestic support (sometimes called “Amber Box” or AMS support) is calculated means that several developing countries are in danger of reaching or exceeding their permitted limits — in most cases a “de minimis” amount of up to 10% of the value of production.

The group says the problem arises because Amber Box support is not calculated by how much a government actually spends. Instead it defines the price support by taking external reference prices, usually from 1986–88, and seeing how much higher are the government’s current administered prices. Inflation and rising commodity prices have forced up the administered prices, and with them the Amber Box support calculation, the G–33 says.

Some other countries question the extent to which this is a problem for most developing countries. Some would prefer to consider provisions for individual countries, without altering the present agriculture agreement’s provisions on Amber Box support.

“During these consultations, it became increasingly clear that the proposal as it stands was not likely to obtain consensus in the time we have before Bali,” Ambassador Adank reported.

The G–33 members have proposed working on one or more of four variables used to calculate Amber Box support, he said:

• de-minimis level (some members have suggested increasing the allowance to 15% of the value of production)
• the external reference price (changing from the current 1986–88 averages)
• eligible production (using total production produces a much larger support figure than only the amount bought for stockholding)
• administered price

Some other members have proposed alternative constraints to make stockholding less distorting, he said.

“The discussions on all of these issues have been free and frank and, at least when members have simply avoided going back over well-trodden ground, they have I believe also been constructive,” he said.

“But that should not be taken to suggest that we have happened upon any clear solutions at this stage, or that we are at serious risk of making a breakthrough — we clearly are still a long way away from defining what might be the appropriate landing zone for this issue in Bali.”

 

The four questions: two close, two unresolved back to top

Where members might be able to agree is on two of four questions he asked a recent meeting of senior officials who travelled from their capitals to Geneva (details in his statement below).

One deals with adding various programmes such as rural development, land reform and infrastructure services to the list of government services included in the Agriculture Agreement’s provisions on the Green Box — support that does not distort trade or does so minimally, and is therefore allowed without limits.

The other is a political statement by ministers in Bali that could include a reference to the 2001 Doha Decision on Implementation, which “urges members to exercise restraint in challenging measures notified under the green box by developing countries to promote rural development and adequately address food security concerns.”

In both cases further work is needed, Ambassador Adank said.

But members remain divided on the third and fourth questions, which deal with amending or interpreting the Agriculture Agreement before or after Bali, or possible additional flexibility for individual countries that risk exceeding their Amber Box limits.

Part of the discussion is about what can be done before the Bali meeting in December, with some countries calling for broader work on food security after the conference.

Members’ comments broadly reflected their differences over a general approach that would amend the Agriculture Agreement, or a case-by-case approach (some indicated a general approach available to all developing countries might not mean altering the agreement).

The G–33 and its supporters prefer a more general approach although some said they have an open mind and are willing to discuss any option.

Others oppose an amendment or interpretation of the Agriculture Agreement, either in principle or because this could not be achieved by December. Some of them favour a case-by-case solution. Some argue that trade and the elimination of distortions are the key to food security. Some said they are prepared to consider an interpretation of the Agriculture Agreement provided transparency and predictability are maintained.

Some were less committed to either solution, preferring to emphasise the need for a solution of some kind by Bali. One suggested a case-by-case interim solution might be possible at Bali with a more general solution afterwards.

(See also the last meeting.)

 

Export competition back to top

Earlier in the week, the G–20 group of developing countries active in agriculture circulated a proposal prescribing a first step towards eliminating export subsidies and disciplining export credit to reduce the chance that the credit is subsidized.

The group, whose coordinator is Brazil, proposes members halve their ceilings on export subsidies by the end of 2013 and phase in a 540-day limit in the repayment period for export credit (the target for benchmark on commercial terms is 180 days). No reduction has been proposed for developing countries but some G–20 members said they expect this to emerge quickly from technical discussions.

The G–20 describes this as a flexible proposal in the spirit of self-restraint and pragmatism because the ultimate agreed goal is for export subsidies to be eliminated completely. It notes that at the 2005 Hong Kong Ministerial Conference, members agreed to eliminate the subsidies by 2013 and says something should be agreed to mark the year, even if total elimination is no longer possible by this date. It adds that export subsidies are the most trade distorting measures and need to be tackled.

Some members of the Cairns Group also supported the G–20 proposal, welcoming that the topic was put on the table.

In contrast, some others warned that that the proposal had the potential to seriously jeopardize the chances of outcomes in Bali. They said export subsidy reductions would not be acceptable without a broader agreement across agriculture and in some cases in other Doha Round subjects. And some were concerned that the draft did not contain proposed reductions for developing countries.

Some said they would examine the proposal and assess whether it could be calibrated for a Bali outcome. Some also reminded members that they consider export restrictions to be important and that current practices lack transparency and discipline.

 

Next back to top

Further small group consultations and meetings of the full membership, dates to be announced

 

Explanation back to top

This was an informal agriculture negotiations meeting of the full membership, officially an “Informal Open-Ended Special Session” of the Agriculture Committee.

Modalities: The way or method of doing something — in this case, how to cut tariffs, enlarge quotas and reduce subsidies and support, along with flexibilities to deal with various sensitivities. The core methods are formulas for cutting tariffs and supports, with a number ways of achieving the flexibilities or tightening disciplines. Once the modalities have been agreed, countries can apply the formulas to tariffs on thousands of products and to various support programmes.

 

Chairperson’s statements

Audio back to top

Use these links to download the audio files or to listen to what he said in the meeting:

The chair’s statements:

 

Text back to top

Welcome to this informal meeting of the Committee on Agriculture in Special Session.

As mentioned in the invitation fax, the purpose of today’s meeting is to update Members about recent consultations on the G–33 proposal introduced at our 16 November informal meeting (Job/AG/22) and to allow delegations an opportunity to exchange further views on this proposal or any other issues.

But before that, a few brief comments on other issues under consideration under the market access and export competition pillars.

First, if I could comment on the G–20 proposal for an understanding on TRQ Administration. As members may be aware there have been no further wider consultations specifically on that proposal, although I have continued to meet with delegations to hear their views on this and other issues. As I mentioned in our last meeting in March, Members continue to see this as a useful one to explore for possible decision in Bali, even though there are some sensitivities about some aspects of the proposal that members do not yet seem in a position to settle. We will therefore need to return to the proposal at an appropriate time but I’m not suggesting we take this up immediately. I’ll keep this under review and determine, in consultation with delegations, when it would be useful to resume consultations on this proposal.

Second, regarding the studies on the export competition pillar as well as on export restrictions, the Secretariat circulated a revised study on export competition (TN/AG/S/27/Rev.1) on 24 April, based on additional information and comments received from Members until 15 April following the circulation of the first version of the document. I will again invite members who wish to do so to comment on these papers and any other issues once we have finished our discussion on the G–33 proposal. Members will also have seen that in the last couple of days Brazil, on behalf of the G–20, has submitted a new proposal on Export Competition, and I would propose to give them the opportunity to introduce this proposal, after we have concluded our discussion on the G–33 proposal.

 

G–33 proposal back to top

Now, coming to the G–33 proposal, I would like to give you a more detailed report on what has happened in this area.

Since our last meeting on 27 March, I have held a series of consultations focussed on the G–33 proposal. The main objective of these consultations has been to explore whether we can identify — on an incremental basis — elements of possible convergence in regard to the proposal.

During April, the consultations were based directly on the proposal itself, drawing on the knowledge acquired from the technical sessions held earlier in the year that had been based around the factual information submitted by members on their programmes in the public stockholding area. The arguments advanced during these sessions by the proponents and other participants in general followed along the lines of the discussions that had occurred during the technical process.

G–33 Members have continued to stress that their policy space has been eroding due to the price increases and hence a solution is required to help these countries to ensure the availability of food for their populations in need. It is asserted by them that there is no viable alternative solution to the public stockholding and hence some modification to the existing rules on market price support calculation would be required. The arguments of other Members have focused notably on the systemic impact of changing the current rules to such an extent outside of a wider negotiation, as well as potential trade distorting consequences of any such change that would provide the degree of flexibility to move amber box support to green box envisaged in the proposal. It has been asserted by these members that given the very different situations of different developing Members, with most of them having no immediate risk of breaking their commitments, changing the existing rules would be both hasty and disproportionate to address the concerns raised.

During these consultations, it became increasingly clear that the proposal as it stands was not likely to obtain consensus in the time we have before Bali. In order to explore other avenues, some other ideas were put forward such as a potential modification or clarification of any of the four variables that enter into the calculation of the market price support subject to the de minimis constraint. These four variables were proposed by G–33 members as:

i) de-minimis level,
ii) external reference price;
iii) eligible production and
iv) administered price.

Some potential additional constraints have also been suggested in the discussions, such as i) product specificity (ie limiting any new flexibility to certain staple products like wheat and rice), ii) targeting, iii) restricting or disciplining the disposal of stocks, iv) capping the exemption, and v) associating a transparency and surveillance mechanism. In parallel, Members have also undertaken some technical discussions among themselves to deepen their knowledge of the inter-linkages between different variables.

The discussions on all of these issues have been free and frank and, at least when members have simply avoided going back over well-trodden ground, they have I believe also been constructive. But that should not be taken to suggest that we have happened upon any clear solutions at this stage, or that we are at serious risk of making a breakthrough — we clearly are still a long way away from defining what might be the appropriate landing zone for this issue in Bali.

 

Four questions back to top

In order to further facilitate the search for convergence, my consultations in May have been based on the four questions I outlined in the senior officials meeting (SOM) on 30 April 2013 and that were circulated to delegations on 1 May.

These questions are:

1.      Are members willing to consider that the Bali Declaration/decisions include recognition that, subject to the fundamental requirement of the Green Box relating to no or minimal trade or production distortion, the Green Box needs to be flexible enough to encompass a wide range of general services policies in developing countries along the lines indicated the proposed paragraph (h) (which the G–33 proposal suggests be added to the Illustrative List of Green Box measures)?

2.      Taking into account what the Ministerial Conference has said in the past (including in the Implementation Decision of 2001), can we use Bali to send a convergent political message that recognises the role played by public stockholding and similar policies in some developing countries?

3.      Are members prepared in the lead up to Bali to agree on any amendment or interpretation of existing WTO Agreement on Agriculture (AoA) disciplines that might provide greater flexibility in this area of public stockholding than is currently the case? If so, what is this amendment or interpretation? If not, are members prepared to consider further work on these issues in the post-Bali period, and how would this work be framed?

4.      Are members willing to consider a mechanism or process whereby any member with specific concerns that their public stockholding policies aimed at addressing food security objectives were at risk of breaching their WTO commitments could bring those concerns to the attention of members and seek additional flexibility on an interim basis, pending any broader agreement to modify the disciplines in general?

 

Potential convergence on questions 1 and 2 back to top

These questions have served to encourage active and engaged debate during which I am pleased to see that at least some elements of potential convergence have begun to surface. These are, however, so far limited to Questions 1 and 2.

On Question 1, all participants expressed their willingness to work on declaration/communique language for Bali that would recognize in general terms that the policies and programmes mentioned in the first part of the G–33 proposal could be considered to fall within the scope of “General Services” of Paragraph 2 of Annex 2 to the AoA. Several Members considered that the declaration should make clear that the chapeau contained in Paragraph 1 of Annex 2 would fully apply to such policies and programmes. Some Members also asked for some further discussion to better understand the policy measures encompassed in the G–33 proposal with a view to fine-tuning the list to be included in the declaration.

On Question 2 which suggested considering the political message to be delivered in Bali recognizing the role played by public stockholding in developing countries, I recalled that there is a precedent contained in paragraph 2.1 of the Doha Decision on implementation-related issues and concerns (WT/MIN(01)/17) that urges Members to “exercise restraint in challenging measures notified under the Green Box by developing countries to promote rural development and adequately address food security concerns”. This might provide a useful reference for further elaboration as part of the political messaging.

As in the case of Question 1, all Members replied positively at a general level. Some Members considered that the message should bring some value added in comparison with the 2001 Decision. Other members considered that there was a need to ensure that any message was appropriately balanced with an acknowledgment of the wider dimensions of food security that spanned all pillars of the agricultural negotiation, including the need to encourage further reform of agricultural policies, as well as the need to ensure greater transparency about existing programmes and measures. No consensus was reached about any specifics of these potential elements but a discussion has been opened and my hope is that as members reflect further on the perspectives they respectively bring to the table that it should be possible to arrive at some broader convergence on this political messaging issue.

 

Differences on questions 3 and 4 back to top

While there were these general elements of convergence arising on Questions 1 and 2, the same cannot yet be said about Questions 3 and 4. On the positive note, however — there has been a clearer articulation of everyone’s positions. We now know a lot more about where each of us stand and this in itself is an important prerequisite to making any progress.

Regarding Question 3, Members could be broadly divided into three groups: i) Members who urge a general systemic solution to the issue for Bali, through an amendment or interpretation of the existing rules; ii) Members who are not convinced that an amendment or interpretation is either possible or desirable by Bali, but also remain open to a discussion about possibilities in this area in the post-Bali period; and iii) those who have a more nuanced position, calling for some kind of half-way house involving both a temporary remedy and ongoing work post-Bali.

The main arguments put forward against an amendment or interpretation have been: i) differences in the situations the proponents find themselves in and therefore the unfeasibility of the “one-solution-fits-all” approach; and ii) the complexity of the issue which many see as only resolvable as part of a much broader agricultural negotiation, which it is suggested cannot happen the short time left before Bali.

Accordingly, I think it’s fair to say that the views on the response to Question 3 span a range of different options, none of which is the subject of any consensus at this stage.

In the discussions, I have suggested that irrespective of where we get to on the issue of “generalised solutions” of the sort envisaged under Question 3 that it might also be useful for members to consider and reflect on a mechanism that could be used on a case-by-case basis, as envisaged under Question 4. Members have been willing to engage, albeit tentatively to date, on this aspect which might be seen as offering an additional way to respond to the issues that underline the G–33 proposal. I stress that the discussions to date have been tentative, but that a number of members have indicated an openness to consider a mechanism/process that might provide for some additional flexibility for specific members on the basis that this would be time limited, non-automatic, and create no or minimal trade or production distortions. Some members have also emphasised that any such flexibility should not be at the expense of accommodating needed economic reforms. It was also stressed again that the transparency — notably through timely notifications — would be an important element in monitoring any flexibility. Some Members also stressed that whatever the temporary solution, it should be an operational one and/or should not be a substitute to a broader solution — I think the idea here was the thought that it might be possible to put in place a specific solution framework at the same time as allowing work to proceed on possible longer term and possibly more general solutions.

I know that some delegations will be disappointed that I am not able to report rather more definitive progress in defining a solution for Bali on the G–33 proposal. To do so would, I believe be a distortion of the current reality we face which is that notwithstanding the progress discernible in the discussion on Questions 1 and 2, members are still very much divided over the most fruitful approach to take to Questions 3 and 4.

 

Food security: clearly concerns all members back to top

So in summary, at the broadest level I think all members recognise the need to seek appropriately define the problem or frame the debate for Bali — food security is clearly an important concern for all members but is also an issue to which members bring a wide range of differing perspectives and emphases. I think it is also recognised that a response to the G–33 proposal will require both general as well as more specific elements.

It is the detail of both the definition of the problem and the response to it that we need to explore further as our work proceeds. I suggest we could focus on what can be done about the problem in general terms (covering a wide spectrum of suggestions from political messaging to formal amendment); and what can be done about it at a specific level, and under what circumstances and conditions. I think the only way that all this can be achieved is if members enter the discussions, which I would propose to continue in further informal consultations in a range of configurations, on a “without prejudice” basis. We need to build the confidence amongst us to identify more clearly the range of potential landing zones, which would then require political decisions to take forward.