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 US counter-notification is the first-ever counter-notification to be submitted to the Agriculture Committee. It claims that India substantially under-reported its market price support (MPS) – government purchases of farm goods at guaranteed prices - for wheat and rice in its 2010-11 and 2013-14 notifications to the WTO (G/AG/W/174 and G/AG/W/178/Corr.1). According to the United States, this was a result of the methodology used by India to calculate its MPS.
The United States said India's farm subsidy notifications lack details on spending at the sub-federal level and that it only reported the purchased production instead of all eligible production. India also reported spending in dollars instead of rupees. Furthermore, India had provided no detailed information on the value of production (VoP), which is the basis for determining "de minimis" limits. "De minimis" are the minimal amounts of domestic support that are allowed even though they distort trade.
India rejected the counter-notification and reiterated its methodology was consistent with WTO rules. It argued that it has consistently used dollars in its notifications since 1995-96. India said the WTO Agreement on Agriculture (AoA) does not define what constitutes eligible production and that the bonuses provided by some states to rice and wheat farmers are not substantive. There is no obligation to notify VoP under WTO rules, it said. In addition, all VoP data are available on seven websites. India said it was willing to submit VoP data provided other members agreed to do so.
Several members shared US concerns and worried this matter might reveal a systemic issue with India's agriculture notifications. One member asked India to resubmit its MPS calculation, data on sub-federal bonuses and VoP figures. Another member disagreed with India's interpretation of Annex 3 of the AoA (the definition of eligible production). The United States reminded India of its promise to submit VoP data soon.
Nairobi decision on eliminating export subsidies
Members undertook their third annual discussion on export competition since the December 2015 Nairobi Decision to eliminate export subsidies. The review was based on a revised background document by the WTO Secretariat (G/AG/W/125/Rev.8).
Out of the 18 members with export subsidy commitments, two members — New Zealand and Panama – had already phased out their export subsidies by the time of the Nairobi Decision. Three members – Australia, Norway and Israel - had their revised commitments to eliminate export subsidies certified.
Four other members – the European Union, Canada, South Africa and Switzerland-Liechtenstein - have circulated a revised schedule for eliminating farm export subsidies. The remaining members with export subsidy commitments - Brazil, Colombia, Indonesia, Mexico, Turkey, United States, Uruguay, Iceland and Venezuela - provided an update on their implementation of the Nairobi decision. Colombia said it hoped to submit its revised schedule within a week and Uruguay expected to be in a position to do so in the coming weeks.
The Cairns Group – a group of agricultural exporting nations lobbying for agricultural trade liberalization - circulated a document (G/AG/W/180) analysing export support policies and expressed confidence that members would soon fully implement the Nairobi decision.
Members also delved into the other areas of export competition covered by the decision - namely export finance, state trading entities and international food aid - and reviewed members' questions (G/AG/W/176).
The Cairns Group report stressed the importance of the monitoring exercise and highlighted some remaining information gaps. The Committee Chair, Debora Cumes, and the Cairns Group called for more active engagement in responding to the WTO Secretariat's Export Competition Questionnaire, in line with the annual review process under the Nairobi decision. Many members supported this call. The Chair urged members who had not yet replied to submit their answers to the questionnaire by the end of June.
Triennial export competition review
The Nairobi Decision on Export Competition instructed the Committee to carry out a triennial review of export competition "to ensure that no circumvention threatens export subsidy elimination commitments and to prevent non-commercial transactions from being used to circumvent such commitments". Members agreed on the Chair's proposal to conclude the first triennial review at the September meeting of the Committee since no member had provided additional comments since February.
Tariff rate quota administration
Members continued to review the Bali Decision on TRQ administration, with a view "to promote a continuing process of improvement in the utilisation of tariff rate quota". Two papers - submitted by the Cairns Group (G/AG/W/179) and the European Union (G/AG/W/175) - triggered some preliminary discussions.
The Cairns Group’s paper highlighted questions to deepen reflection on future Committee work on the reasons for under-fill of tariff rate quotas (TRQs). Under the TRQ system, quantities inside a quota are supposed to be charged lower import duty rates than those outside. But in some cases, the tariffs applied outside the quota are lower than those inside. This explains why these quotas are sometimes “under-filled ” or not fully used.
The EU's paper noted that not all members have the same obligations with respect to the "under-fill mechanism" contained in the Bali Decision and commented that this diminishes the mechanism's potential effectiveness. One member noted that it would be useful to have a common understanding of the implications of paragraphs 13-15 of the Bali TRQ Decision, which define the scope of the TRQ review process.
Members agreed to continue discussing all elements at the next Committee meeting.
Regular review of agriculture policies
The Committee continued to review policies related to the three pillars of agriculture trade: market access, domestic support and export competition.
Nine new questions concerned Article 18.6 of the Agreement on Agriculture (review of the implementation of commitments). India's policies on two products were questioned: rice and sugar. Canada asked the United State to explain why it issued new lenient policy terms for Commodity Credit Corporation Funds. Members also revisited questions from previous Committee meetings. Members expressed concerns about developments relating to Canada's new milk class and India's pulses policies. All the questions are available in document G/AG/W/178.
Agriculture information management system (AG IMS)
As part of the exercise to improve transparency, the WTO Secretariat is improving the AG IMS database and will introduce new features in August. Training courses will be organized based on members’ requests.
Questions and answers regarding the issues mentioned above can be viewed in the AG IMS (search the AG-IMS ID in the section "Search Q&A Submitted since 1995").
The next agriculture committee regular meeting is scheduled for 25-26 September.
During a two-day symposium, held on 13-14 June, experts in agriculture policy and trade from both developed and developing countries presented information on the latest trends in the global food and agriculture economy, the implications for farmers, consumers, and businesses and future expectations. Participants exchanged ideas on four themes: the economic significance of agricultural trade; evolving trading patterns in agricultural products; products, prices and market participation; and the agricultural trade policy landscape.
Speakers noted that the food and agriculture landscape has dramatically evolved in the past 15 years and notably developing countries are playing an increasingly important role in world agricultural markets. Population growth in many countries, land and water constraints, consumer preferences for quality products, diverse trading patterns, and increasing emphasis on intermediate agro-food products are all part of the changing dynamic of agriculture trade. Farmers face new challenges while national agriculture policies are juggling various priorities, which may also have a bearing on sustainable development at the global level.
Speakers emphasized the critical role that international trade can play in food security and in the livelihoods of farmers. Discussions highlighted that effective collaboration among countries at the multilateral level is needed to effectively address challenges, to strengthen the agriculture and food system and to build sustainable solutions. The programme and presentations are available here.
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