Ambassador Vitalis gave a detailed account of the status of the four inter-related elements of the agricultural negotiations. These are: 1) domestic support; 2) market access; 3) export competition; and 4) cotton.  He also updated members on the separate talks regarding public stockholding for food security purposes.

He reported “a very serious situation” in both the domestic support and market access pillars of the agricultural negotiations. “In fact, in my summing up of both discussions I drew the obvious conclusion: that the failure to find convergence in domestic support and market access has wider implications and these are not positive”.

On export competition — an area of the farm talks that many see as a possible key element in any Nairobi package — the Chair said that despite the perception of less divergence in this pillar, “there is not a consensus on the overall contours of such a package, let alone its precise content nor indeed how this might relate to what happens after Nairobi.”

The Chair highlighted cotton as a priority issue for Nairobi, citing the need to engage in a more focused negotiation on what could constitute a possible outcome in relation to export competition, market access and domestic support. The Bali ministerial decision on cotton stresses the need to level the playing field for cotton producers in developing countries, especially in impoverished African regions.

Finally, on public stockholding for food security purpose, Ambassador Vitalis said he would continue to consult widely on this matter and intended to hold a separate process on public stockholding in the coming weeks.

The Chair invited members to express views on the possible outcomes at the Nairobi conference.

Noting the limited time before Nairobi, many members underlined the need to focus on a smaller package. There is a shared sense that export competition is more mature and stabilized than other areas. Positive trends were noted in members' export-related policies as reflected in an earlier Secretariat report (G/AG/W/125/Rev.3).  This is in particular the case with export subsidies, which have fallen to zero, with the exception of a few members.  

Other issues mentioned as possible outcomes for the Nairobi conference include the Special Safeguard Mechanism (SSM) — a mechanism for developing countries to temporarily raise import tariffs in response to import surges or price falls. Many developing members maintain that the SSM would help to protect farmers suffering from subsidies by big players, citing that the mechanism was agreed in principle in the Hong Kong Ministerial Declaration. Opponents of the proposal, however, noted that distortions in agricultural trade should not be fought with more distortions.

Some members also listed elements in all three pillars of the agriculture talks, referring to ‘Rev 4’ (the 4th revision of agricultural modalities in July 2008), as important issues to be considered. Many reiterated that the work on removing domestic support and reducing trade barriers in the agricultural sector should not stop after Nairobi. The least developed countries (LDC) group informed members they are working on a proposal of specific issues of interest to LDCs — likely to be submitted by the end of the month — to be considered for the Nairobi conference.

In conclusion, the Chair said that members understood the centrality of agriculture and development to the wider negotiations and that there was agreement on the need to secure an agriculture outcome for Nairobi, even if there was no consensus yet on precisely what this might look like. He said there was a shared sense of urgency about the process given the limited time remaining before the WTO’s Tenth Ministerial Conference in Kenya.

The Chair further observed with regret, however, that he had not heard much that was particularly new on most of the issues considered by members in the informal session of the agriculture negotiations. Notwithstanding this, Ambassador Vitalis did observe that the exchanges on 2 October had confirmed a shared sense that the issue of export competition was both the most stable and mature of the issues under negotiation at this point. This was encouraging, he said.

Taken together, the Chair indicated that he intended to proceed by intensifying consultations with all members, recalling that the WTO could not be a “Melian Dialogue” — it had to be a fully inclusive and transparent process. In this regard, the Chair expected work to proceed with members across the entire suite of agriculture-related issues ahead of Nairobi, including in particular on export competition. In terms of the latter element, Ambassador Vitalis commented that the forward process would be shaped and informed by members’ views on the key issues through a “define by doing” approach. More broadly, the Chair underlined and welcomed the commitment of members to redouble and intensify their efforts over the coming weeks ahead of the Nairobi conference.

Earlier, in a briefing on 17 September, Director-General Roberto Azevêdo called for more clarity from members “by mid to end of October” in order to prepare the ground for a successful ministerial conference. “Given the very limited time left before the Ministerial and the sombre account the DG provided of the current state of negotiations”, the Chair told the members, “I share the DG’s view that there is an urgent need for more clarity on what can be done — or cannot be done — before Nairobi. We need to reach an understanding of what is realistic in the time we have and we clearly have no time to waste.”

For more background on the negotiations, please consult:
www.wto.org/agnegs

Groups in the negotiations:
www.wto.org/ddagroups

 

Chair's assessment of the current negotiations

Domestic support

• During the meeting on domestic support on 23 September, one member introduced ideas that had already been shared with some members in early September and subsequently outlined during a meeting on 17 September.

• That proposal combined some non-binding commitments with limited binding commitments on certain types of trade distorting domestic support, such as market price support and input subsidies.

• It’s fair to say that these ideas provoked diverse reactions from members. Some of you welcomed them with interest. Others made it clear that these ideas were not a basis for forward movement.

• If I may summarise, there appeared to me to be five specific issues identified in our discussions. These included a perception that the ideas presented:  1) may constrain developing countries' flexibilities and notably the use of their de minimis; 2) failed to distinguish between commercial and subsistence farmers; 3) targeted two programmes some developing countries are using the most; and 4) have an impact on the public stockholding debates; 5) imply that two specific programmes were considered more trade distorting than others.

• Several members, while showing a readiness to discuss new ideas, indicated their preference for limiting trade distorting support in general, and/or for the OTDS (overall trade distorting domestic support) concept in particular. 

• Some members said they were ready to work with the AMS (Aggregate Measurement of Support) concept.

• Other members focused on Rev.4 in particular, stating that this was “the most promising/viable starting point”.

• Some of you expressed an interest in transparency-related issues, with at least one member suggesting an exploration of the monitoring and transparency provisions (as per Annex M of Rev.4) as a potential deliverable for Nairobi.

• And, finally, in light of a possible nil outcome in domestic support, the question of the post-Nairobi scenario has become an increasingly important matter for many of you — indeed some of you suggested this is an urgent issue to clarify.

• In short, my conclusion was that points of disagreement — and some of these were sharp-edged — far outweighed the points of agreement.

• On the positive side, I heard an agreement about the importance of the domestic support pillar, and that the WTO remains the only place where it can be dealt with. There was a sense too that agriculture and development are closely related. There was widespread agreement too that Nairobi should include an outcome on agriculture. There was also a shared understanding that even after the Nairobi Ministerial we would need to work on this.

• Unfortunately, members disagreed on pretty much everything else. There was, for instance, no agreement on new ideas, nor was there agreement on what I called the “not so new ideas”, nor indeed on the way forward. Nor was there agreement on how to move forward on domestic support.

• As to the post-Nairobi agenda, notwithstanding the sense that domestic support would need to be focused on after Nairobi, there was certainly no agreement on how precisely this would be done and what the architecture of this would look like.

• Put simply, we are far from agreeing on the content or the contours of an outcome in domestic support. Unless I hear something new or different today — and I do hope I do (I am an optimistic person from the New World after all), we are certainly going to need to confront directly an existential question in the area of domestic support. 

Market access

• Turning to market access, in my consultations on Monday (28 September) I invited members to share any new thoughts or contributions that could make a difference and help us to move forward on this pillar of the negotiations.

• I regret to report back to you that it's clear from these consultations that we are still faced with largely the same questions that have bedevilled our process for some time now.

• Let me start with the points of agreement. There was agreement that agricultural market access mattered. There was also agreement that we have a limited amount of time to deliver an outcome for Nairobi in this area. There was also agreement that the failure to secure an outcome on market access for agriculture would have wider implications for the negotiations — and a sense that those implications were negative. Those were the points of agreement.

• Unfortunately the points of disagreement were considerable. 

• There were serious question about our shared level of ambition, with on the one hand calls for what some members called “realism” while on the other hand, there was an insistence on bearing in mind the development aspects of this pillar and therefore calling for high ambition in tariff reductions.

• There were a wide range of views of how and even whether to address other market access elements already discussed in these negotiations.

• On this list of issues you raised, there were references to minimum cuts, tariff escalation and tariff capping provisions, safeguards, including the SSM, tropical products,  tariff rate quotas, special and sensitive products, and specific provisions for special and differential treatment.

• It is clear to me that many, if not necessarily all of these, remain firmly on the agenda for some countries, while equally some, if not necessarily all of these, were equally firmly rejected — or set within the context of the overall process of the negotiations, noting in particular the lower ambition.

• More specifically, I heard a range of views about tariff reduction approaches, but again there was certainly no convergence apparent on any one approach.

• Some members suggested particular elements that could be addressed regardless of what level of ambition was chosen, but others were not prepared to consider these in the absence of possible, let alone meaningful, tariff reductions.

• As in domestic support, therefore, both the content of a possible market access outcome and the contours of such an outcome are very unclear.

• With respect to discussions relating to what would be possible for Nairobi and post-Nairobi, it's safe to say by the end of the consultations that we are no closer to reaching a common understanding on this.

• My question of how to strike the optimal balance between ambition and political viability, in the context of a low ambition outcome in this pillar, remains unanswered.

• And again, as with domestic support, members — I believe — face an existential moment on market access for agricultural products.

Export competition

• On export competition, I have started consulting with a number of delegations and these contacts are continuing. I will progressively broaden the scope of my consultations.

• I know that some of you consider this pillar as a possible key element in any Nairobi package.

• That may well be the case, but I must be very clear that there is not a consensus on the overall contours of such a package, let alone its precise content nor indeed how this might relate to what happens after Nairobi.

• I am very conscious of these inter-related elements. Indeed, be assured that I have heard these diverging views. These have helped me frame, shape and inform the way I have conducted and will conduct my consultations on this pillar.

• Let us be honest, however, this divergence does not make our task easier. Let us also be frank with one another that there are also issues within the pillar itself that we will need to grapple with.

• Some of you have raised questions about the internal balance of any outcome. And then there is the question of the “external balance” across the wider negotiation.

• And that is notwithstanding the fact that this element has been considered as more mature than the two others and that at least on this pillar we have a well-developed text to work from.

• These divergences exist — but at the same time, I sense a willingness to see what may yet be possible — a kind of “define by doing" approach at least as we take this forward.

• In my continuing consultations therefore my objective will be to identify with you the precise scope of the remaining issues and work towards agreed formulations for dealing with these.

• I will be looking for opportunities to engage in broader consultations in a variable geometry format, including formats like this one as we head towards Nairobi.

Cotton

• Let me be both clear and up front on this issue. Cotton remains a priority issue for Nairobi.

• As noted by my predecessor in July, we need to engage in a much more focused negotiation on what could constitute a possible outcome on cotton in relation to export competition, market access and domestic support. I have made it clear that I share John’s assessment and am proceeding on that basis.

• During my first round of consultations, I therefore asked very directly some of the key interested members and, in particular of course the Cotton-4 members, to detail as specifically as possible their views on what could constitute such an outcome on cotton, taking into account the overall negotiation context.

• My intention is to intensify my consultations on cotton in the coming weeks.

Public stockholding

• I continue to consult widely on this matter and I understand the importance some members attach to this, noting also the divergent views on the process going forward.

• As I noted earlier I do intend a separate process on public stockholding and I expect to hold a meeting on this in the coming fortnight or so.

Conclusion

• Taken together, I have given you a sense of where matters stand in the consultations on the agriculture components. I have explained 1) the process, 2) the context and 3) the substance of the consultations thus far, including in some detail on all of the areas we are working on collectively.

• Unfortunately, the areas of divergence remain and our challenge is to see what is still possible to narrow the gaps and precisely where.

• As I noted at the outset, these kinds of open-ended consultations matter — this negotiation is, as I have already said no Melian Dialogue. Today is another opportunity for all members — all members — large and small, developed, developing and LDCs to consult, discuss and engage with one another and to help inform and guide my process as Chair going forward.

• I look forward to hearing from you today on your assessment of where we are at, including in particular on the possible outcomes for Nairobi.