WTO: 2014 NEWS ITEMS

AGRICULTURE: FORMAL MEETING


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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MINUTES:

The committee, which consists of all 160 WTO members and deals with implementing existing agreements rather than negotiations, was not scheduled to discuss the deadlock on trade facilitation (speeding up customs and other procedures at the border) and public stockholding for food security in developing countries. However, at the start of the meeting chairperson Miriam Chaves confirmed news of the breakthrough and urged delegates to continue with their regular work “with renewed optimism”.

Much of the meeting was spent scrutinizing information that members have to supply, as well as some questions delegates raised on information that has not been notified. As usual, questions and answers on domestic support were particularly lengthy because it is a complex and detailed subject. The questions can be found in full in document G/AG/W/136, which includes reference numbers for the questions and answers in the Agriculture Information Management System (AG-IMS) database. Some details are below.

 

Some details

 

Chairperson: “renewed optimism”

At the start of the meeting, chairperson Miriam Chaves said:

“I am pleased to be able to confirm the news many of you have heard this morning. India and the US report they have come to an understanding on elements of an agreement that will allow us to move forward on the Bali Package. Based on these elements, they are working to prepare something that will facilitate consideration by the full membership.

“This is indeed good news and we look forward to further details as they are worked out. For today we should continue with our usual work, but with renewed optimism.

“We do not expect comments or questions on this today. I beg you to keep further questions and comments for a later moment when details are available. I hope their agreement leaves us in a good mood for our work today. Now I’ll turn to the regular work of our committee.”

Separately, WTO Director-General Roberto Azevêdo also welcomed the news.

 

Questions and answers

One of the key responsibilities of the “regular” Agriculture Committee, which consists of all 160 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 have made in the WTO. Out of the 36 sets of questions in this meeting (document G/AG/W/136), 17 were about information available elsewhere that has not yet been notified, and about 30 were about some of the 76 notifications on their programmes that members submitted since the last meeting in June.

Questions and answers from all meetings are compiled in the Agriculture Information Management System database. Code numbers in the document G/AG/W/136 in the form “AG-IMS ID XXXXX” can be used to identify the questions and answers (for questions in this meeting, use meeting number 75).

 

India

India replied to 42 questions following its recent notification on its domestic support (documents G/AG/N/IND/10 and G/AG/N/IND/10/CORR.1), covering the period 2004–2011 and therefore clearing up a substantial backlog. India replied to questions on a range of issues including how the calculations are made, the value of production (which determines the limits India has agreed on the support), how India defines “eligible production” (which is part of the calculation of the amount of support given) and whether India’s stockholding programme for food security has an impact on export prices.

The questions came from: Australia, Canada, the EU, Japan, Paraguay, Switzerland, Thailand and the US. Also commenting in the meeting were: Brazil (which missed the deadline for the written questions), New Zealand, Pakistan and Uruguay.

In the notification, India says that it complies with WTO rules on agricultural domestic support. Its spending on price support programmes, for instance, falls under the limit of 10% of the value of production — a limit on trade-distorting domestic support (AMS or Amber Box support) allowed generally to developing countries when they don’t have their own separate commitments. Members appreciated India providing detailed information. Some of their questions focused on:

  • Currency: Why India notified its support in US dollars instead of rupees (the currency used in India’s original reference document), and how the exchange rates were determined. India explained that the exchange rates were determined by market forces. It said the use of dollars was consistent since it had done so since its 1995-96 notifications. Some countries said that using rupees would produce higher domestic support figures.
  • Value of production. India did not include these figures in its notification because they are not required (but some countries do include them). Members wanted to know the figures because they determine the limit on trade-distorting support: India said it would supply them in writing (they will be available in the Agriculture Information Management System (AG-IMS) database).
  • Eligible production.” The calculation of trade-distorting (AMS or Amber Box) support is based on the amount of production eligible for the support. India has used the amount actually purchased for stockholding for this figure. Some members said total production should be used instead since it was all eligible for support even if it did not receive it.
  • Minimum price support programmes. Some members said the Indian government has promised to purchase 25 crops at a minimum price and asked why only a handful of products are mentioned in its notifications. India said that only those products that actually received support are listed in the notification. Some delegations noted that the guarantee of minimum price in the beginning of the planting season could encourage production and discourage diversification even if no support was actually received. India denied that the programmes stimulate production.
  • Effect on exports? Some members expressed concern that minimum price support and public stockholding programmes could impact other countries through exports. They observed that India’s exports have grown significantly in recent years and it has become a leading exporter of various agriculture products including rice and wheat. India replied that the programmes aim to ensure food security for the poor and to help farmers who suffer from poor conditions and natural disasters, but do not target exports. Stocked produce has not been exported, it said.
  • Input subsidies: India has registered a large increase in the subsidies it provides for inputs such as fertilizer, irrigation, electricity and seed. Under Article 6.2 of the Agriculture Agreement developing countries are allowed to do this without any limit even though the support could distort trade, provided it goes to poor farmers. India explained that low income farmers are those with less than 10 hectares of land, accounting for 99% percent of all Indian farmers. India also promised to provide more information on the input subsidies in writing

India was also asked about its export subsidy programme for sugar, with Australia, Thailand, the EU, Pakistan, New Zealand and Colombia all saying they were concerned at a time when members have agreed (in Bali) to reduce and eventually eliminate these types of subsidies. India’s explanation was similar to that given in previous meetings. It said no incentives have been paid out to producers so far. Similar concerns were heard about increased or unchanged export subsidies in Canada and Norway.

 

Canada

Canada faced a number of questions mainly related to its dairy programmes and mainly continuing from previous meetings. But the US raised a new concern about the possibility that the Canada-EU bilateral agreement would lead to Canada reducing other countries’ access the tariff quota (where tariffs are lower or zero for quantities within the quota) for cheese. Sharing the concern were New Zealand, Norway, Switzerland and Uruguay.

 

US

The US replied in detail to over 20 questions from India about the domestic support programmes it has notified (document G/AG/N/USA/93). The answers were mainly explanations of the various programmes covering some crops, irrigation schemes and other subjects.

 

Turkey

Turkey continued to be asked a number of questions about its domestic support and export subsidies, and in particular about its wheat flour sales.

 

Tariff quota fill rates

And Australia asked all countries that notified data on the tariff quotas applied to their imports, to supply information on “quota fill rates” (how much of the quotas are actually used for imports). Following agreement in Bali to work on how the quotas are shared out among importers (“tariff quota administration), the chairperson suggested adopting as best practice a notification format (known as “Table MA:2” notifications) that includes an addition column for reporting tariff-quota fill rates. Several members said they have already included this information in their notifications in 2014.

 

Want more?

  • Members’ compliance with notification obligations, latest version, G/AG/GEN/86/Rev.19 (pdf) — Over a third of domestic support notifications are overdue (669 or 36%). During the discussion, the US asked China when it would submit an up-to-date domestic support notification (the latest year covered so far is 2008). China said that it is coordinating among various government agencies to compile the large amount of information and will submit the notification soon.

 

Implementing Bali decisions

The committee continued its monitoring and other follow-up work on other decisions agreed at the WTO Bali Ministerial Conference, with a brief reminder by the chairperson on the recommended use of an additional column on quota fill rates (see above) in tariff quota notifications (under “tariff quota administration”), and information on preparations for the next discussion in June 2015 on and export subsidies and other policies grouped under the heading “export competition”.

 

Net food importers

The African Group (Egypt speaking) called for tighter rules so that food aid increases at times of high prices and shortages. The call came in the annual review of the decision from the 1994 Marrakesh ministerial meeting that set up the WTO to monitor the situation of net-food-importing developing countries and least developed countries that might suffer if agricultural trade reform changes trade patterns and makes food more expensive.

Food aid is part of this. A Secretariat background note (G/AG/W/42/Rev.17) summarizes the recent developments.

CHAIRPERSON: Ms Miriam Beatriz Chaves of Argentina

 

Next meetings

(Could be changed, with possible informal meetings before)

  • 4 March 2015
  • 4 June 2015
  • 24 September 2015
  • 19 November 2015

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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