WTO: 2014 NEWS ITEMS

AGRICULTURE NEGOTIATIONS: INFORMAL 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.

“INFORMAL MEETING” means there are no minutes.

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The story so far 

2000: Agriculture negotiations launched(March). See backgrounder

2001: Doha Development Agenda launched. Agriculture included (November)

2004: “Framework” agreed (August)

2005: Further agreements in Hong Kong Ministerial Conference (December)

2006: Draft modalities (June)

2007: Revised draft modalities (July)

2007-2008: Intensive negotiations with working documents (September-January)

2008: Revised draft modalities (February, May and July)

2008: The July 2008 package full coverage and the chair’s report

2008: Revised draft modalities (February, May, July and December)


We still have some days before that TNC so today is not the day for making the final determination


They remained deadlocked over India’s refusal to adopt a legal text (or “protocol”) on trade facilitation (streamlining customs and other border procedures) until a permanent solution is found to replace the interim Bali decision on public stockholding in developing countries; and its insistence that the permanent solution be agreed by the end of 2014 instead of 2017 as envisaged in the Bali decision (explained below).

About 35 speakers intervened in the two-hour meeting, a larger number than the week before, when the regular Agriculture Committee met informally on 16 September, although some of the arguments followed a similar pattern. (The regular committee usually deals with monitoring implementing existing agreements rather than negotiating new ones.)

“I don’t think it will come as any surprise to members that my general conclusion as of now is that in the absence of a solution to the current impasse, there is no consensus on how the negotiations mandated for this committee can be taken forward,” said chairperson John Adank, who is New Zealand’s ambassador.

He said he would report on what he had heard to Director-General Roberto Azevêdo, who plans to call a meeting of the umbrella Trade Negotiations Committee in early October. (Ambassador Adank’s statements in audio and text are below.)

 

Some details back to top

 

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In this meeting

About 19 speakers — developed and developing countries in roughly equal numbers — objected directly or indirectly to the trade facilitation text being held up despite consensus being reached on the contents in Bali, where members also agreed to adopt it in a proper legal form by 31 July.

Among them, several repeated their view that the hold-up on trade facilitation amounted to a betrayal of trust, which made it impossible engage in further work in good faith. As one put it, the trade facilitation negotiation had been concluded in Bali, leaving only the technical task of cleaning up the text by July. Several called for the text to be adopted within the next few days. Some called more generally for all the Bali decisions to be respected.

Some other speakers called for the impasse to be resolved quickly. Several said a work programme to conclude the Doha Round should be agreed by the end of the year (a target set in Bali), some arguing that the impasse on trade facilitation should not hold up the development of the work programme. Some highlighted issues of particular concern to them.

The least developed countries said provisions in the Bali decisions for their group should not be held up by the impasse. The G–33 group highlighted its proposals on public stockholding, special products (which would have smaller tariff reductions than normal) and the special safeguard mechanism (for raising import duties temporarily to deal with import surges or price falls).

One member said eliminating all forms of export subsidies is becoming more urgent since agricultural prices are falling and pressure to subsidize is increasing.

India reiterated its position that adopting the trade facilitation text should be delayed until the end of the year and for a permanent solution on public stockholding also to be agreed by then — by referring to a statement made in a heads of delegations meeting earlier. India countered the charge of bad faith by arguing that its accusers were also showing bad faith by questioning the feasibility of the December 2008 draft deal in agriculture, which is the only one currently on the table and in turn was based on a framework agreement reached in 2004 and the mandate of the Doha Round.

Meanwhile, the G–33 and some others argued that negotiations on a permanent decision on public stockholding in developing countries should take place in these “special sessions” the term used for negotiations meetings of the Agriculture Committee. Some said it did not matter to them whether it was here or in the regular committee. One said the question “does not make sense in the present crisis of the organization.”

 

Next

To be announced

 

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Explanation

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 back to top

Audio

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

The chair’s statements:

 

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Opening

As indicated in my convening fax, and as part of the follow-up to the 15 September Heads of Delegation meeting convened by the DG [director-general] as Chair of the TNC [Trade Negotiations Committee], this meeting provides a further opportunity to the members to take stock of their positions concerning the way ahead for the negotiations and the work programme mandated at Bali.

But before opening the floor to discuss these issues, I wanted to provide a short report of where we stood just before the summer break as well as on developments since then so as to refresh everyone’s memories.

Report: During the last meeting on 23 July, I reported on my informal consultations that had been aimed at clarifying the perspectives Members have on the way forward for the Bali work programme in agriculture.

I also reported on the two technical workshops that the Secretariat held following a request from some members, to help deepen understanding at the technical level of issues that have come up in the course of the negotiations so far. As you may remember, the first one was on domestic support and took place on 8 July and the second, on market access, and took place on 10 July.

I noted on 23 July that based on the exchanges up to that point it was clear that more focussed and indepth discussions would be required in a range of areas if we were to take our work forward and I had circulated prior that meeting a set of questions aimed at encouraging greater engagement.

In the same meeting, the G–33 introduced three proposals — on public stockholding (JOB/AG/27), Special Products (JOB/AG/28), and SSM (JOB/AG/29) — that had been circulated to the members a week before. The G–33 were also asked to clarify how they see the respective roles of the Regular CoA [Committee on Agriculture] and the CoA in Special Session regarding the public stockholding issue. I understand that the G–33 wish to share their further views with us today in this regard.

But as many of you have noted on past occasions, this Special Session does not exist in isolation from our broader work on Doha and Bali follow-up. So before opening the floor, I want to say a few words about the general situation or backdrop to this meeting that I hope most of you are by now fully aware of.

As you will recall, at the end of July, WTO members failed to meet the deadline set by ministers in Bali for the protocol on the Trade Facilitation Agreement. It would appear from reactions both in the lead up to and since July that this has a broader impact on work within this and other bodies tasked with Bali and Doha follow-up.

Given this situation, in his message of 2 September 2014 the DG highlighted the need to re-engage quickly to discuss the situation with a view to finding solutions to the implementation of the Bali outcomes. The DG called on the relevant chairpersons to immediately begin consulting with members on those issues so that he could report on the outcome of these consultations at a TNC meeting latest in early October. So that is what I have been doing now as well as in bilateral meetings with a range of delegations who were able to meet with me in recent days.

 

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Closing

We heard today from a total of around [35] speakers, and I think that highlights along with the views that members have expressed, a significant concern with which members view the current situation.

We have heard a range of different perspectives or takes on what this all means for the work of the Special Session.

A number of members have underlined that unless the Trade Facilitation Protocol can be adopted and opened for signature, it will not be possible to advance further work here or in other committees mandated to pursue follow-up negotiations to Bali, on those issues agreed in Bali. Those delegations have pointed to the fact that the Bali decisions were a package and that in order for work to be advanced across the board, it has to be advanced — as a whole — as envisaged in the Bali decisions in accordance with the sequential milestones outlined there. So that was one set of views that was heard.

Now we’ve also heard other members in contrast suggesting that notwithstanding the current situation affecting trade facilitation that work should continue within this committee as envisaged prior to the summer break. Some of the members that have commented along these lines have suggested that all issues in Bali decisions should be the subject of independent follow-up without linkages between those  issues. We clearly have a contrast between those views from members.

More generally we’ve also heard a range of members highlight the importance they place on the work within this committee given the importance of agricultural reform more broadly and the unique role that the WTO has to play in this regard. While a number of these members have highlighted how much they want to see progress there’s also been a recognition that this will be extremely difficult in the current context given that advancing issues substantively quires a willingness for genuine engagement amongst members on the range of substantive issues that will feature in any post-Bail work programme. So the current impasse on trade facilitation is seen as representing a significant hurdle in this regard.

That would be a general overview of the views that we have heard. We’ve also heard comments on a number of specific issues, not necessarily from all members, but we have heard from some members commenting on the on-going priority attached to LDC [least developed country] issues, and various members highlighting the difficulty they can see in taking forward negotiations in the current circumstances have in some cases mentioned their on-going commitment to engagement on LDC issues.

We’ve also heard from a number of members who have commented on the relationship that they see between the interim solution on public stockholding for food security and the permanent solution, and the duration of the interim solution, and the assurances they are willing to provide and convey in that regard. So there have been various messages sent by some members in that area.

We have had clarification which were requested in the last meeting from the G–33, that would see this committee, rather than the Regular Committee, as the place for taking forward negotiations regarding the public stockholding permanent solution issue. Some members have commented further on that position.

At the same time, it is also clear that the willingness of many members to move this work or other negotiations work forward is dependent on progress made on the adoption and opening for signature of the Trade Facilitation Protocol.

Finally, having listened to everyone, I’ve noted the concerns that many members have expressed hoping that the current impasse can be resolved before the TNC meets in early October, given the consequences they perceive for the work of this committee if it remains unresolved. And as members have noted, we still have some days to go before that TNC, so today is not the day for making the final determination of where things are or will be on that day.

But I don’t think it will come as any surprise to members that my general conclusion as of now is that in the absence of a solution to the current impasse, there is no consensus on how the negotiations mandated for this committee can be taken forward.

And so I would plan to report these views to the director-general, in my view, the views that I’ve expressed represent an accurate summary reflection of the range of views we’ve heard today.

 

Background back to top

The Bali decision on stockholding arises because some developing countries fear they could breach the limits they have agreed on trade-distorting domestic support, when they implement stockholding programmes involving purchases at supported prices. (Purchases at market prices are not counted as support.)

Technical note

Trade-distorting domestic support (the “aggregate measurement of support“ or AMS, sometimes called “Amber Box” support) is calculated as the difference between the present support price and the 1986–88 reference price multiplied by production that is eligible for the support.

For most developing countries, the resulting amount has to be within 10% of the value of production (the “de minimis“ level). The few that started off with higher support levels ended up with agreed AMS limits that are above the 10%, provided they reduced their support:

(Support pricereference price) x (eligible production) ≤ 10% of the value of production (or other agreed limit)

Some members see the fixed references prices as a way to prevent countries — particularly major players in agricultural trade — from using inflation to increase the support they are allowed. The reference period was 1986–88, the first three years of the Uruguay Round negotiations which produced the present Agriculture Agreement and members’ commitments.

The concern is only on the purchasing side because there are no limits on supplying cheap or free food specifically to the poor or malnourished.

The “public stockholding” proposal dates back to the early years of the agriculture negotiations and was first tabled officially in a proposal from the African Group in 2002 (see “evolution” below). For over a decade, various versions of the proposal sought effectively to add this to policies in the “Green Box”, which are allowed without any limit because they do not distort trade or do so minimally (see Annex 2 of the Agriculture Agreement).

However, the Green Box explicitly excludes price support. A number of countries were concerned that stockholding proposals involving support prices would alter the Green Box’s definition (and therefore the whole “architecture” of the Agriculture Agreement itself). As a result, some of the suggested compromises included changing the agreed limit without putting these purchases in the Green Box. There was no consensus on any of these ideas.

It wasn’t until 2013 — a few months before the Bali Ministerial Conference — that alternative ideas surfaced in the talks (see the chairperson’s 23 May 2013 report to members and “evolution” below). They included altering the way trade-distorting support is calculated by recalibrating the external reference price instead of fixing it in 1986–88, using a different method of taking inflation into account, or a “peace clause” shielding any breaches of the agreed limits from legal challenge. Also discussed was redefining “eligible production” — which is one part of the calculation of trade-distorting support (see technical note) — to mean the amount actually bought instead of all the produce that could have been sold to the government.

The “peace clause” was the approach adopted in Bali, but with conditions added to deal with fears that stockholding programmes involving purchases at supported prices could affect other countries. Governments seeking the shelter of the peace clause have to avoid distorting trade (ie, affecting prices and volumes on world markets) and impacting other countries’ food security, and to provide information to show they are meeting those conditions.

There was no consensus on other proposals because a number of members — developing and developed — had concerns about changing the disciplines on domestic support, particularly the nature of the Green Box.

The “peace clause” is an interim solution. Members agreed in Bali to find a permanent solution by 2017 (the 11th Ministerial Conference). One question that has arisen is what happens to the interim solution if members fail to agree on a permanent solution by the 2017 deadline: a number of members have said they are prepared to clarify that the interim solution will remain until a permanent solution is agreed.

After Bali, the first proposal for a permanent solution came from the G–33 on 16 July 2014, which essentially repeated the group’s 2012 pre-Bali proposal to move these programmes into the Green Box. The proposal also called for a permanent solution by the 2017 deadline agreed in Bali. In the General Council on 25 July 2014, India, a G–33 member, complained of slow progress on the permanent solution and called for a decision on this by the end of 2014. Because of the slow progress, India said, it could not proceed with adopting the legally polished trade facilitation text despite agreement in Bali to do so by 31 July. Since then, members have been deadlocked on how to proceed.

 

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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.

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 other 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:

 
About negotiating texts:

• bracketed

• “Job document”

• modality, modalities

• schedules

• templates

 
Issues:

• Amber box

• Blue box

• box

• de minimis

• distortion

• export competition

• Green box

• pro-rating

• sensitive products

• special products (SP)

• special safeguard mechanism (SSM)

• tariff line

• tariff quota

• the three pillars

> More jargon: glossary
> More explanations

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