AGRICULTURE NEGOTIATIONS: INFORMAL MEETING

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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 discussions confirmed a certain number of key findings, in particular the near universal support among the membership for an outcome on domestic support,” concluded the chairperson of the agriculture talks, Ambassador Stephen Ndung’u Karau of Kenya. Meanwhile, “several delegations stressed again that market access nevertheless cannot be absent from an outcome at MC11”.

On public stockholding, Ambassador Karau stated that he had detected some flexibility in the talks. “My conclusion from this meeting is that members need to engage pragmatically with each other,” he said. “I am convinced that there are practical solutions that could help to narrow the gaps between your positions.”

The chair also reported that divergent views persisted among members on the topic of a special safeguard mechanism (SSM) for developing countries.

The discussions revolved around over a dozen submissions WTO members have tabled since the last full-membership meeting in November 2016. Some of these papers focussed on curbing domestic subsidies in agriculture, while other papers looked at options to reduce farm trade barriers. Two papers addressed export restrictions and food safety measures, and a few other submissions from the G33 group of developing countries focussed on policy tools to address food security and price volatility faced by small farmers in developing countries.

Domestic support

Ambassador Karau reported that most of the members he had consulted considered curbing domestic support as the priority for the Buenos Aires Ministerial Conference in December 2017. However, members were “clearly aware of the contextual difficulties surrounding this issue”, and “have revised their expectations about what could be achievable by MC11”.

Several members also raised the issue of how to ensure that work will continue on domestic support after the Buenos Aires Ministerial Conference. “There is an emerging consensus that whatever the outcome at MC11, it should not be considered as a final outcome on domestic support”, the chair said.

Members’ submissions on domestic support include a paper by the group of least developed countries and one by the African, Caribbean, and Pacific group of states. Both advocated a substantial reduction in trade-distorting domestic support in agriculture.

The Cairns Group of agriculture exporting countries circulated a paper on the group’s objectives for MC11 and beyond, laying down elements of a possible outcome on domestic support and in other areas. Some members of the group also issued a technical analysis detailing four different scenarios of subsidy curbs aimed at limiting different types of domestic support.

Public stockholding for food security purposes

Public stockholding is a policy tool used by governments to purchase, stockpile and distribute food when needed.  While stocking and distributing food is permitted under WTO rules, governments purchasing food at prices higher than market prices are considered to be subsidizing its farmers.

Members agreed on a “peace clause” in Bali, under which they agreed to refrain from initiating legal disputes challenging such programmes under the Agreement on Agriculture. A number of conditions were also imposed on countries which might avail themselves of the programme, namely the need to avoid distorting trade or impacting negatively on other countries’ food security, and to report information about the support provided.

The Nairobi ministerial decision reaffirmed the commitment “to engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution” to the public stockholding issue by the 11th Ministerial Conference, to take place in Buenos Aires in December 2017.

Ambassador Karau reported that all members recognised there was a firm deadline and very clear ministerial mandates to find a permanent solution on this topic. One of the key questions that remained open was the starting point for the discussions. “The G33 maintain that their proposal should be the basis, while many others prefer the Bali Decision”, he said.

He had nonetheless detected some flexibility in the talks: “as compared to previous reports, what has been new to me is the increasing number of members indicating that they see the permanent solution somewhere in-between.”

Market access

“In my consultations, many members expressed the view that an outcome in agriculture market access was a lower priority”, the chair reported to members, noting that some members considered that it would be difficult to secure an outcome addressing significant trade barriers in agriculture in the absence of outcomes in other areas.

Nonetheless, other members continued to stress the importance of achieving commercially meaningful results with a view to laying the groundwork for future work in the area. “Members acknowledged the difficulty of achieving outcome in this pillar giving the current negotiating context, but several members insisted on the need to ensure the work continues after MC11”, the chair said.

Paraguay and Peru introduced a paper that sought to address high trade barriers in agriculture, including complex tariff structures, relatively high tariffs (“tariff peaks”) and higher import duties on finished or semi-processed products than on raw materials (“tariff escalation”).

The proponents suggested that members pursue some deliverables on these issues in Buenos Aires, with a view to agreeing on modifications of members’ schedules of concessions by the twelfth Ministerial Conference. As a next step, based on these modified schedules, members would pursue their efforts to achieve meaningful market access  through reductions of tariffs and non-tariff barriers.

Russia put forward another paper, arguing that members should phase out the special agriculture safeguard (SSG) mechanism that allows 39 members to temporarily increase import tariffs on specific agriculture products in cases of import surges or price depression.

“While some members support the elimination of the SSG, others do not see this as a realistic outcome,” the chair reported.

Special safeguard mechanism

  • In a dedicated discussion on a special safeguard mechanism (SSM) for developing countries, the chair of the agriculture talks reported that divergent views still persisted among members on this topic. The SSM would allow developing countries to temporarily increase import tariffs in cases of import surges or price depression.

The G33 presented two written submissions: one describing the need for an SSM to address the negative impacts of short-term international price volatility on the resource-poor small-scale farmers, and the other underlining some outstanding issues on which the G33 sought the engagement of members towards finding a solution. Other members, while agreeing on the potential harmful effect of price volatility on agricultural producers, did not, however, believe that an SSM would be the best remedy to counter volatility. Persistent disagreement was again evident regarding the linkage between the SSM and broader market access negotiations.

“I would encourage you to engage pragmatically and to talk to each other, and focus on identifying practical solutions to address the remaining obstacles in our negotiations,” the chair said.

Export competition

Ambassador Karau reported that none of the delegations had classified export competition as a priority for MC11 and that several delegations had stressed that the current priority was the implementation of the Nairobi decision on export competition.

Cotton

Ambassador Karau reported that an overwhelming majority of members supported a meaningful and specific outcome in addressing subsidies in cotton that  should go “one step further than for domestic support in general”.

The co-sponsors of the cotton initiative – Benin, Burkina Faso, Mali and Chad – stressed that an outcome on cotton domestic support in Buenos Aires was their top priority as confirmed by the ministerial declarations of Bamako, Mali (October 2016), and  Cotonou, Benin (April 2017) urging  an ambitious reform in world cotton trade.

Other issues: export restrictions and food safety standards

“The issue of export restrictions emerged as being of particular interest to a number of members which have been seeking to strengthen disciplines in this area,” the chair reported to members.

Building on an earlier submission, Singapore introduced a paper advocating more transparency in export restrictions. The paper raised some specific questions, including on advance notification periods and the application of export-limiting measures on foodstuffs purchased for non-commercial humanitarian purposes.

Brazil and Argentina introduced a discussion paper focussing on sanitary and phytosanitary measures. The paper highlighted issues related to rules and practices of WTO members as they relate to food safety and animal and plant life or health standards which deserved further consideration. The proponents said that the science-based approach embedded in the WTO’s SPS Agreement needed to be reinforced, so as to prevent the maintenance of food safety and animal and plant life or health measures without scientific evidence.

Some members said they needed more time to consider the proposal. Others noted that the SPS Committee would be a more suitable place to discuss the paper.

Way forward

The chair concluded that the situation today was still characterised by a wide range of expectations amongst members on the prospects for MC11.

He highlighted the need to deepen the work, topic by topic, based on the communications and submissions received so far and he invited members still working on some new submissions to make all possible efforts to circulate them by end of June.

“Although many positions on the negotiating issues remain entrenched, let me remind you that (in Swahili) palipo na nia pana njia – where there is a will, there is a way,” the chair stated.

More on agriculture negotiations
https://www.wto.org/english/tratop_e/agric_e/negoti_e.htm

Groups in agriculture negotiations
https://www.wto.org/ddagroups

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