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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The non-binding pledge was made at the December 2013 Bali Ministerial Conference, and the discussion in this committee meeting was the first of an annual series agreed in the declaration (details below). The meeting also continued its work on implementing other agricultural issues in the “Bali package”, again at this stage focusing on data needed for the task (details below). And as usual it heard a number of questions and answers on how countries are implementing their commitments on various subsidies and market access.
- Export competition
- Informal sessions: Bali package and other issues
- Questions and answers
- Want more? Members’ compliance with notification obligations
- Next meetings
The new information on export subsidies and related policies confirms the urgent need to proceed with eliminating the subsidies, even though the information is incomplete, a number of members said. Some disagreed. Chairperson Miriam Chaves (of Argentina) said members will be given more time to supply the information before next year’s review. She added that she intends to work on updating the questionnaire for members to supply information on their use of these programmes.
The 2013 declaration on export subsidies and equivalent effects in export finance, the activities of state trading enterprise and food aid — together known as “export competition” — is the part of the Bali Package with potentially the greatest impact on agricultural trade even though it’s a non-binding political statement. In Bali, ministers promised to “exercise utmost restraint” in using any form of export subsidy and to work for its elimination.
The basis for this meeting’s discussion was five new Secretariat documents based on members’ replies to a questionnaire:
- G/AG/W/125 (pdf, with charts comparing members’ use of subsidies with the limits they have agreed)
- G/AG/W/125/ADD.1 (pdf, data on export subsidies) and correction G/AG/W/125/Add.1/Corr.1
- G/AG/W/125/ADD.2 (pdf, data on export finance)
- G/AG/W/125/ADD.3 (pdf, data on food aid) and correction G/AG/W/125/Add.1/Corr.1
- G/AG/W/125/ADD.4 (pdf, data on state trading enterprises)
The Cairns Group responded with a paper (G/AG/W/129, presented by New Zealand), which concludes that despite gaps in the information, the picture is of significant falls in export subsidies since the Doha Round negotiations began in 2001 — including many countries reporting that they have not subsidized exports — together with a number of reforms in export finance, food aid and state trading enterprises.
However, some members have not reformed and some have introduced new subsidies or related policies, the group says.
Direct export subsidies have fallen to zero, except in a few countries, and where this is not the case there are some reports of steps being taken to reduce their use, the paper observes.
However, it goes on, the information is unclear on whether member export financing programmes (credit and insurance) meet the target of being on self-financing set in the present draft in the agriculture negotiations, known as the revised draft modalities of December 2008 (document TN/AG/W/4/Rev.4, sometimes called “Rev.4” for short). The paper notes that most members did not say whether the programmes are self-financing, and that this could be improved in the questionnaire for next year’s review.
On state trading enterprises, the paper observes that 20 members reported they had a total of 77 agricultural exporting enterprises covering a wide range of agriculture products; and another 20 said they have none. Countries reporting by far the most enterprises were China (25), Colombia (14) and India (14). Fruit and vegetables, and tobacco are the two product categories that involve the most state trading enterprises.
Of the 14 members that reported the details of their food aid programmes, just over half already appear to be consistent with the present draft in the agriculture talks, the paper says. The draft envisages aid that is broadly untied, and in cash or any other form that is not related to the donor country’s export objectives, except in emergencies or other special situations.
The group says the data show that the objective of eliminating export subsidies “is doable” under the 2008 draft “modalities”. And, the group adds, the draft’s provisions on all forms of export subsidies are necessary to guarantee their elimination.
“It is important that domestic reforms continue but it is essential that the Doha negotiation objectives on export competition be met without delay. The overall policy and price environment presents a valuable opportunity to deliver on this objective,” the group says.
In the discussion, the G–20group of developing countries reached as similar conclusion about the need to eliminate all forms of export subsidies. But some members (eg, the US) said they do not think the Secretariat’s documents contain enough information to contemplate concluding the negotiations on export subsidies and other export competition policies. The EU said that the data, though incomplete, showed the different levels of progress among members in eliminating of all forms of export subsidies in parallel. The US, EU, Cairns Group and G–20 called for members to provide more complete and up-to-date information for the Secretariat’s questionnaire and in their notifications to the WTO.
Speakers included: the Cairns Group (New Zealand speaking), the G–20 (Brazil speaking), Indonesia, Argentina, Canada, Chile, Colombia, Uruguay, the Philippines, the EU, Paraguay, Pakistan, Mexico, India, the US, Switzerland, Australia, China and Costa Rica.
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Informal sessions: Bali package and other issues
The Bali issues also discussed — but in informal sessions on 4 and 6 June — were tariff-rate quota (TRQ) administration (how quotas are shared out among traders when tariffs inside the quotas are lower than for quantities outside), public stockholding for food security in developing countries, and agricultural tariff and trade data.
Public stockholding. The G–33, the original proponents of the public stockholding decision in Bali, called for work to begin quickly on a permanent agreement as prescribed in the decision. Members broadly agreed that waiting until the next meeting in November would be too long a gap. The chairperson said she would organize informal consultations before then, provided members drive the work by submitting proposals.
Some members said the task would also need up-to-date information (a reference to some countries’ failure to provide recent information on their domestic support programmes).
Tariff-rate quota administration. Following on from discussions in the last meeting in March, the committee discussed possible approaches for notifying information so that tariff-quota “fill rates” — what percentage of a quota is actually imported — are more visible. This should be simple since the import volumes and the quota sizes are already notified, several members said.
The issue, also a Bali decision, arises from concerns that quotas could be under-filled because of the way the quantities are shared out. Making the fill rates more visible would help the committee monitor the situation. See an explanation here.
Market access data. As part of the committee’s work on monitoring agricultural trade more generally, the US (document G/AG/W/132) has proposed that the Secretariat should compile data on members’ agricultural tariffs (maximum tariff levels legally bound in the WTO and the actual tariffs charged, which can be lower), and their global share of agricultural imports and exports. Other members added calls for data on tariff peaks (high tariffs), tariff quotas, and special safeguards (using provisions allowing countries to raise tariffs temporarily to deal with price falls or import surges).
Some members complained that the requests were made at such short notice that they did not have time to consider the best use of the Secretariat’s time.
However data on trade and tariff profiles are already publicly available, so members agreed the Secretariat should proceed since the task would only involve repackaging the information to make it easier to use.
(Although the regular committee does not deal directly with the agriculture negotiations, the information and monitoring can play role. One of the current questions in the negotiations crept into this meeting: whether the 2008 draft “modalities” text should be the main basis for the revived Doha Round talks on agriculture. Some delegates said the data on market access would be useful for working with the draft. Others said it would only be for the committee’s monitoring role.)
Export restrictions. Discussions continued informally on how members can provide better information on their export restrictions (many restrictions have not been notified to the WTO) and how to determine which countries are net importers — countries introducing export restrictions are supposed to take their interests into account.
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Questions and answers
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 keeping the promises they made in the WTO, ie, complying with their commitments on subsidies and market access and to discuss issues that arise.
Out of the 36 sets of questions in this meeting (document G/AG/W/127), 16 were about information available elsewhere that has not yet been notified, and 20 were about some of the 46 notifications on their programmes that members submitted since the last meeting in March (seven on tariff rate quotas, 11 on domestic support and two on export subsidies).
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 74).
Many of the questions in the formal meeting were about information that members have notified. Among those not related to notifications were queries on India’s subsidies and laws (6 sets of questions), Brazil’s programmes (2 sets), Canada’s policies on reclassifying pizza toppings containing cheese and its dairy schemes (2 sets), actual or possible breaches of rice subsidy ceilings in Costa Rica (1 set) and Thailand (3 sets), whether Turkey’s export subsidies and domestic support are within commitment levels (1 set), Ecuador’s and St Lucia’s domestic purchase requirements (1 set each) and whether Honduras’s new tax exemptions discriminate against imports.
These are some of the points raised
India was asked about a number of programmes, including support for poor farmers (how India establishes that recipients are poor), a new export subsidy programme for sugar and support policies. India provided some details, said it was preparing more, and said that its programmes conform to its obligations. It also said no export subsidies have been paid on sugar, and that no one had asked for the subsidies.
Some countries urged India to scrap the programme in order to be consistent with the Bali declaration on export subsidies. Some said they were concerned about support for wheat since India has become a major exporter. Expressing concern, particularly about the wheat programme were: Pakistan, the US, Australia Brazil, the EU, Canada, Thailand, Costa Rica and Paraguay
Thailand reported that its “paddy pledging programme” (domestic support for unmilled rice prices through loans that can be defaulted) has ended with the recent change of government. It said the programme was financed through “revolving funds”, with government support only for interest and capital costs. It added that it would notify the information when it is available. India, Pakistan, the US, Australia, Canada and Uruguay said they remain interested in the policy.
Costa Rica said work on an alternative to its price support for rice — which has caused it to overshoot its domestic support limit — is still under way, and it will supply information when it is available. (Costa Rica had previously said the reforms will be introduced in 2015.) Appreciating Costa Rica’s transparency but also expressing concern about the breach were the US, New Zealand, the EU, Canada, Uruguay and Pakistan.
Want more? back to top
- Members’ compliance with notification obligations, latest version, G/AG/GEN/86/Rev.18 (pdf, 23 pages)
Next meetings back to top
(Could be changed, with possible informal meetings before)
- 13–14 November 2014
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• Blue box
• overall trade-distorting domestic support (OTDS)
> More jargon: glossary
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