AGRICULTURE: FORMAL MEETING
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.
The Committee’s review of agricultural export policies is part of the monitoring of how the Nairobi decision on farm export subsidies is being implemented. Members decided at the December 2015 Ministerial Conference in Nairobi to eliminate agricultural export subsidies — widely seen as an unfair trade practice that distorts trade and undermines food production in vulnerable countries — and to strengthen rules on other forms of export support.
The WTO Secretariat circulated a new, revised background document G/AG/W/125/Rev.6 with its four addenda on export subsidies, export finance, international food aid and agricultural exporting state trading enterprises (STEs). The Cairns group of agricultural exporting nations and the Russian Federation circulated document G/AG/W/164 analysing the information on export support policies. It noted that this was the first annual review based on members’ reporting for 2016, i.e. the beginning of the Committee’s assessment of members’ implementation of the Nairobi Ministerial Decision.
Among the 18 members(1) that have scheduled export subsidy commitments as a result of the Uruguay Round, two members — New Zealand and Panama – have already phased out their export subsidies. Australia was the first member that submitted an amended schedule to the WTO to give up its export subsidy entitlement effective as of 22 May 2017. Several members provided updates on the steps being undertaken domestically to prepare for the modification of their schedules of commitments The European Union, Israel and Norway indicated that they expected to notify their revised export subsidies schedules before the end of 2017.
Members exchanged information on other aspects of export competition disciplines – export financing support, agriculture exporting STEs, and international food aid.
On export financing support, “just under half of the programmes reported have repayment terms that exceed the 18 months maximum repayment period established in the MC10 decision,” the paper by the Cairns group and Russia noted, while “sixteen members notified or reported agriculture exporting STEs covering a wide range of products”.
The Chair of the Committee, Mr Alf Vederhus of Norway, noted that members still need to beef up their efforts to share information. “I urge members, developed and developing ones in a position to do so, to make all possible efforts to provide in an accurate and timely manner, and when possible improve, the information provided to inform this dedicated discussion on export competition”, he said.
Members also exchanged information on their farm policy practices. The questions and answers to each query can be found in the Agriculture Information Management System.
Canada — new milk ingredients policy
Australia, New Zealand and the United States submitted over 80 questions about Canada’s new pricing policy for milk ingredients. This policy has generated strong reactions in the Committee since it was first raised in 2016.
The new pricing policy is one part of Canada’s National Ingredient Strategy currently being negotiated between Canada’s dairy farmers and its dairy processors. The Canadian dairy industry created a new group of milk products – “Class 7” – to price ingredients like protein concentrates, skimmed milk and whole milk powder used to make dairy products such as cheese and yogurt. Members argue that the new ingredients strategy gives an incentive for Canadian dairies to produce protein substances using Canadian milk by making domestic milk protein cheaper than imported milk protein.
New Zealand, noting the numerous questions posed, expressed disappointment that they remained in the dark on many issues, including the relevant timelines for implementation of these measures. Australia, the European Union, Mexico and the United States stressed concerns about the potential effects on international trade.
Canada – cheese tariff quota, domestic support and export subsidy for butter
The United States and New Zealand questioned Canada on the allocation of tariff quotas on cheese that permits the import of a certain quantity of cheese at a lower duty rate and quantities exceeding the quota at a higher duty rate. They noted that in the context of the Canada-EU Comprehensive Economic Trade Agreement (CETA) negotiations, Canada had reallocated 800 tonnes of the WTO cheese tariff quota to the EU. They also drew attention to an announcement that the Canadian government had provided 350 million dollars of domestic subsidies to assist dairy farmers. Canada confirmed the programmes for Canada’s dairy sector aimed at helping farmers adjust to increased EU cheese imports under CETA, and said it will notify the changes to WTO members through the normal WTO channels.
Canada informed members that, due to a shortage of butter in its domestic market, it did not provide export subsidies for butter in the 2015-2016 dairy year. It said that this information will be included in its export subsidy notification. Australia, New Zealand, the EU and Russia registered their interest in this matter and reminded Canada of WTO members’ commitment to eliminate export subsidies at the 2015 Nairobi Ministerial Conference.
India’s wheat stocks
Australia and the US questioned India about its programmes to procure and stock wheat under its market price support programme.
India provided information on the operation of the wheat stock programme, noting that the procurement targets are decided to meet domestic requirements and that no stocks of wheat have been sold under the open market sales system for 2017-18.
Australia commented that India’s procurement policy seemed to apply to all wheat production, noting that there seemed to be some restriction on exporting wheat stocks. The US, the EU, Ukraine, Russia, New Zealand, Paraguay, Canada, Colombia, Costa Rica, Thailand, Mexico, Argentina and Pakistan urged India to share more information on its price support programmes. Members stressed that transparency on this subject is particularly important in the context of discussing a permanent solution for public stockholding programmes for food security purposes, in preparing for the 11th Ministerial Conference at the end of this year. Some noted that such schemes could potentially distort markets and negatively affect trade.
Philippines’ rice waiver
Members questioned the Philippines about its plan to convert its import restrictions into tariffs. The WTO General Council of 24 July 2014 granted a special waiver to the Philippines allowing it to keep its rice import quantity restrictions up until 30 June 2017. At an earlier meeting, the Philippines had informed members that the process to turn import restrictions into tariffs (“tariffication” in WTO jargon) might encounter a delay.
The Philippines informed members that the President and the cabinet had already initiated the process to convert rice import restrictions into tariffs, and the Filipino congress was currently considering the issue. The tariffication will be implemented once the congress passes the legislation.
Australia, Thailand, the US, the EU, Canada and Viet Nam signalled their interest in this matter, and will closely follow further updates. They stressed the importance of respecting WTO commitments within the agreed deadlines.
The Chair recognized the efforts made by some members to bring their notifications up to date. At the same time, he highlighted that, according to the latest summary of members’ notifications (G/AG/GEN/86/Rev.28), a significant proportion of domestic support and export subsidies notifications remain outstanding.
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