WTO: 2014 NEWS ITEMS

AGRICULTURE: REGULAR COMMITTEE (INFORMAL)


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:

They differed broadly on two issues:

  • whether the post-Bali work could go ahead anyway in the absence of agreement on the legal text on trade facilitation (streamlining customs and other border procedures), and
  • which committee should handle work on a permanent solution on public stockholding for food security in developing countries — the other relevant body is the negotiations session of the Agriculture Committee, which is due to meet informally a week later on 23 September 2014.

 

Some details

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Implementing Bali 

A number of countries objected to India’s opposition to accepting the Trade Facilitation Agreement by the 31 July deadline agreed in Bali, and India’s tying this into its call for a permanent solution to be found for the currently “interim” decision on public stockholding for food security in developing countries. Some were less specific, simply calling for all the Bali decisions to be implemented.

The previous day (15 September), India had reiterated its position in a meeting of ambassadors — that members should strike a deal on a permanent solution on stockholding by the end of 2014 and that agreeing to the legally cleaned up trade facilitation text would also have to wait until then. In this agriculture meeting it said it would not repeat that statement.

The objecting countries said the back-tracking on the Bali decision had “ruptured trust” — as one delegation put it — making it difficult to progress on implementing the whole Bali package. (Details of the agriculture part of the Bali package are in the chairperson’s opening remarks, below.)

Australia asked India to explain the difference between the G–33 group’s 17 July 2014 proposal — which calls for a permanent solution on stockholding to be agreed by 2017 (the 11th WTO Ministerial Conference) as was agreed in Bali — and India’s own position that both the permanent solution and the Trade Facilitation Agreement should be concluded by the end of 2014. India said it would explain the G–33 proposal when members start negotiating a permanent solution.

Some countries also said they were unclear about what the problem with the Bali decision on public stockholding was. If the problem arose because of lack of clarity about the duration of the present interim decision, then they would be happy to confirm that it will remain in place until a permanent solution is found, they said.

However, negotiating the content of the permanent solution would take time and could not be completed by the end of 2014, they added. However, India countered that members recently showed that they could successfully negotiate a complicated text within weeks — a reference to the trade facilitation negotiations before Bali — and therefore agreeing a permanent solution by December 2014 is possible.

The basis for this meeting’s discussion was five new Secretariat documents based on members’ replies to a questionnaire:

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Which sessions? 

The debate about which body should handle the talks on a permanent solution was also inconclusive, with a number of legal and procedural arguments put forward, particularly for treating the talks as a negotiation in the committee’s “special sessions”.

Some members said it didn’t really matter which sessions of the committee were used since the delegates would be the same agricultural attachés. Some argued that the “regular” committee’s routine work on implementing the present Agriculture Agreement and members’ current commitments should not be disrupted by differences over the Bali decisions.

Chairperson Miriam Beatriz Chaves (Argentina) concluded that the link between trade facilitation and public stockholding could only be settled in a broader body such as the Trade Negotiations Committee. She said she would reconvene this informal meeting later to discuss the appropriate forum for handling the permanent solution on public stockholding.

Speaking in this meeting were: the Philippines, Paraguay, the US, EU, Japan, China, Barbados, India, Brazil, Australia, Uruguay, Indonesia, Argentina, Nigeria, Ecuador, Burkina Faso.

 

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Background

The original proposal on public stockholding was to amend the Agriculture Agreement (specifically Annex 2’s paragraphs 3 and 4 and footnotes 5 and 6) so that government purchases at supported prices for stockholding in developing countries — to benefit low-income farmers or those who lack resources and for food security — would be allowed without limits.

It arose because some developing countries said that they risked exceeding their present agreed limits because of the way the size of the support is calculated.

The interim agreement reached in Bali (explained in some detail here) is different. It shields developing countries from legal challenge for exceeding their agreed domestic support limits — when they buy food at supported prices in order to stock it for food security. It includes conditions to deal with fears that these policies could distort international markets and hurt farmers in other countries, including a requirement to provide up-to-date information on the use of stockholding policies and on domestic support in general. In Bali members also decided to work on a permanent solution, aiming to reach agreement by the 11th WTO Ministerial Conference in 2017.

Over the years, the various ideas for solving the problem of stockholding for food security, when the produce is bought at supported prices, have included:

  • Putting the support in the “Green Box”, ie, not counting it as trade-distorting domestic support (aggregate measurement of support or AMS, sometimes called “Amber Box” support). This was the main proposal up to 2013. Several countries oppose this on the grounds that price support distorts trade and does not conform to Green Box criteria.
  • Revising the limits on trade-distorting support that developing countries agreed under the present Agriculture Agreement, particularly for this kind of programme. Some countries had reservations and in any case the proponents preferred the “Green Box” route.
  • Adjusting the base-period reference prices that are used to calculate trade-distorting domestic support to take inflation into account. This first appeared publicly in 2013 in the agriculture negotiations chairperson’s oral report on his consultations and in a G–33 document. Countries opposing this said it would alter the “architecture” of agricultural trade reform under the present agreement. That architecture was designed to prevent all WTO members from citing inflation as a reason to increase the amount of trade-distorting support they are entitled to.
  • A “peace clause” shielding these programmes from legal challenge (the interim solution agreed in Bali). With the peace clause in place, limits on trade-distorting support and the methods of calculation (including reference period prices) do not come into play for these programmes.

Supplying cheap food to the poor is not an issue here: it’s allowed without limit. The Agriculture Agreement (footnote 6 applying to paragraphs 3 and 4 of Annex 2) says this is allowed when the objective is to meet “food requirements of urban and rural poor in developing countries on a regular basis at reasonable prices”.

 

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Chairperson’s opening remarks  

As noted in my invitation fax circulated on 8 September, the purpose of today’s meeting is to take stock of members’ positions on the implementation of the Bali outcomes and to exchange views on the way ahead in light of the reflection that Members undertook over the summer. A meeting of the special session [ie, negotiations session] of the Committee on Agriculture will take place on 23 September.

Before we begin this discussion I’d like to set the scene with some general observations about the work of the Committee.

As you are all aware, the Committee on Agriculture (CoA) has a broad mandate and provides members the opportunity to raise any matter relevant to the implementation of commitments derived from the Agreement on Agriculture. It plays an essential role in the monitoring and transparency functions of the WTO. It also provides a forum for members to discuss policies in the context of the implementation of commitments under the Agreement on Agriculture. The foundation of this work is members’ agriculture notifications and we’ve made progress in this area especially with respect to members’ efforts to catch up on missing notifications. In this regard, I’d like to mention, in particular, a notification from India which was circulated Wednesday 10 September covering 7 years of domestic support notifications.

This year the committee was also tasked with implementation of some key Bali outcomes. Our work so far, which was summarized by the chair of the General Council in July, has included:

  • The first annual dedicated discussion on export competition was held on 5 June, based on a background document circulated by the Secretariat which compiled information from Members. The Secretariat circulated an update of this document earlier today as G/AG/W/125/Rev.1 and G/AG/W/125/Add.3/Rev.1. As regards the 2015 dedicated discussion exercise, following our discussions, I announced my intention to circulate a compilation of members’ suggestions for enhancing the quality and quantity of members’ responses in the second half of 2014 in parallel with the questionnaire on export competition that will initiate this 2015 dedicated discussion. I would like to remind you that, you are invited to send to me and to the Secretariat by 19 September any suggestions in this regard.
  • In June the committee also discussed the notification of TRQ [tariff-rate quota] fill rates as called for in the Bali Decision on TRQ administration. I proposed that the CoA consider a draft format, which was circulated to members as RD/AG/36 [a restricted “room document”] on 9 July 2014, at its next formal meeting in November.
  • Concerning the decision on public stockholding, there have been requests from members to initiate discussions towards a permanent solution. I proposed that informal consultations could be scheduled after the summer break to continue work on this issue, taking into account the Bali mandate.

So, it’s clear that this committee has a full agenda of important tasks. I assure you, as I did in July that I am fully committed to advancing on all of these with your cooperation.

However, you are all aware that we currently face some uncertainties regarding how events at the end of July may affect our work. In July WTO members failed to meet the deadline set by ministers in Bali for the protocol on the Trade Facilitation Agreement. This is likely to have a wider impact on other areas though I very much hope that the CoA’s work on implementation of existing commitments will not be hindered.

Given this situation, in his message of 2 September 2014 the DG [director-general] highlighted the need to re-engage quickly to discuss the situation with a view to finding solutions to the implementation of the Bali outcomes. At his request, the chairs are beginning a period of intensive and comprehensive consultations on how to progress all of the decisions and declarations agreed in Bali and on the path forward concerning the remaining Doha Development Agenda issues. [See also his statement on 15 September 2014.]

Since the Committee on Agriculture was one of the committees tasked with advancing implementation of some of the Bali outcomes I’ve been asked by the DG to consult with you on what can be done in these changed circumstances. The DG will report on the outcome of all these consultations at a TNC [Trade Negotiations Committee]meeting in early October.

Today, therefore, I want to hear your views on the prospects for our work in the CoA, on implementation of the Bali outcomes in the context of this broader situation.

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Chairperson’s summing up 

 
Many crucial points were raised today. The first crucial point was raised by many of you about [not linking] trade facilitation and this public stockholding issue. This cannot be solved in this committee. I will be reporting to the DG on this issue.

Regarding where we will deal with public stockholding — in this committee or the special sessions — many, many reasonable reasons have been raised for why this committee should continue with its regular tasks and why the special sessions should be dealing with the public stockholding issue. But I think there is some confusion. We created the confusion, because I have here, as you all have, what [some delegates] quoted: Paragraph 8 of the public stockholding decision clearly mentions the Committee on Agriculture. When we refer to the Committee on Agriculture we are referring to the regular sessions; when we refer to the special session, we refer to the Committee on Agriculture in Special Session.

On the other hand in the Bali Declaration, part 2, title Doha Development Agenda, subtitle “Agriculture” we have many issues, many of them covered or under the responsibility of this committee: general services, public stockholding for food security purposes, understanding on TRQ administration and export competition. So whether this committee is a negotiating committee or not — I have my personal opinion which is not for sharing with you — is not my responsibility. My responsibility on the contrary is to let you comply with the Bali decisions.

Whether it’s the special sessions or the regular sessions, this is the second step. The first step is to clarify what we will do with this stalemate. So I will be reporting to the DG, because in this point we are far away from [agreeing].

I think that was a first conversation. I think it was quite productive. I will be reporting to the DG. My intention is tackle in the next informal session the question of where we will be dealing with public stockholding, as this is a very important issue. […] We need to reflect on where we are going to deal with this, and particularly when we will deal with it.

 

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Next meetings

(Could be changed, with possible informal meetings before)

  • Informal meeting on Bali decisions (to be announced)
  • 13–14 November 2014 (formal meeting)
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Evolution of the ‘public stockholding’ proposal 

ie, “public stockholding for food security in developing countries”, specifically, in the Agriculture Agreement: Annex 2’s paragraphs 3 and 4 and footnotes 5 and 6.

Note: some proposals would also have implications for this issue without referring specifically to public stockholding. For example in 2001 India proposed (G/AG/NG/W/102) that all product specific support given to low income and resource poor farmers should be excluded from calculations of trade-distorting support (AMS).

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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Date(s)

Proposal or document

Main point(s)

20 November 2002

African Group proposal JOB(02)/187

Removes reference to AMS (trade-distorting domestic support) calculations, effectively putting the programmes in the unlimited Green Box

18 December 2002

Chaiperson’s overview TN/AG/6

Working hypothesis and variations range from keeping existing provisions to removing reference to AMS (effectively putting market price support in the Green Box)

17 February 2003

First draft “modalities” TN/AG/W/1 and TN/AG/W/1/Rev.1

Exempts developing countries from the requirement that food security stockpiles have to correspond to “predetermined targets”

6 April 2006

African Group TN/AG/GEN/15

Removes reference to AMS calculations, effectively putting market price support in the Green Box

12 July 2006

Draft possible “modalities” TN/AG/W/3

Excluded from AMS calculations, effectively putting the programmes supporting low-income or resource-poor producers in the Green Box

1 August 2007

Revised draft “modalities” TN/AG/W/4

AMS calculation covered by de minimis

8 February 2008

Revised draft “modalities” TN/AG/W/4/Rev.1

AMS allowed up to de minimis of 15% (product specific) and 10% (overall)

19 May 2008,
10 July 2008,
6 December 2008

Revised draft “modalities” TN/AG/W/4/Rev.2, TN/AG/W/4/Rev.3, TN/AG/W/4/Rev.4

Excluded from AMS calculations, effectively putting the programmes supporting low-income or resource-poor producers in the Green Box

13 November 2012

G–33 proposal for Bali, JOB/AG/22

Excluded from AMS calculations, effectively putting the programmes supporting low-income or resource-poor producers in the Green Box

3 October 2013

G–33 proposal for Bali, JOB/AG/25

For the “interregnum” until the Agriculture Agreement has been amended — three options: altering the AMS calculation by recalibrating the external reference price, alternative method taking inflation into account, or a “peace clause.” This is the first time that adjusting reference prices or a “peace clause” appears in a paper

7 December 2013

Bali Ministerial Decision WT/MIN(13)/38

“Peace clause” shields existing programmes of developing countries against legal challenge if support leads them to exceed agreed limits

17 July 2014

G–33 proposal for a permanent solution JOB/AG/27

(Repeats 2012 proposal) Excluded from AMS calculations, effectively putting the programmes supporting low-income or resource-poor producers in the Green Box. Calls for a permanent solution by 2017 (11th Ministerial Conference)

Note: some proposals would also have implications for this issue without referring specifically to public stockholding. For example in 2001 India proposed (G/AG/NG/W/102) that all product specific support given to low income and resource poor farmers should be excluded from calculations of trade-distorting support (AMS).