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 .
Review of the Bali Ministerial Decision on TRQ Administration
The Chair of the Committee, Ms Debora Cumes from Guatemala, noted that WTO members would seek to finalize the Committee's report and recommendations on administration of the tariff rate quota by June 2019 so that the General Council could take a decision on the recommendations arising from the review no later than 31 December 2019. The purpose of the TRQ review is to promote improvements in the use of tariff rate quotas, which allow quantities inside the quota to be charged lower import duty rates than those outside.
Members' discussions were mostly based on a draft report prepared by the WTO Secretariat (G/AG/W/192) issued on 21 December 2018. WTO members remain divided on specific elements, particularly on special and differential treatment (S&D) and TRQ reallocation.
Some members underlined the scope and purpose of the ongoing review and the need to distinguish it from the agricultural market access negotiations. They underlined the importance of paragraph 4 of the Bali Ministerial Decision on TRQ Administration in cases where members' quotas are not filled and of ensuring the applicability of the Bali decision to all members. A suggestion was also made to have a regular review of the Bali TRQ Decision in the Committee at an agreed frequency.
The Chair indicated additional informal meetings and consultations with members will be organized, with the aim of finalizing the report and the associated recommendations.
EU’s post-Brexit TRQ plan
Members reviewed the EU's newly circulated Regulation 2019/216 concerning arrangements in the event of a "no deal" between the EU and the United Kingdom on the terms of the UK's departure from the EU. They expressed concerns over the EU's proposed allocation of TRQ volumes between it and the UK as of 29 March 2019, the projected date for Brexit.
The EU said the new quantities for the EU27 will only come into effect on the day that the UK withdraws from the EU in the case of a "no-deal" Brexit. The TRQ licences issued prior to that date in the EU28 will remain valid in the EU27 with the exception of licences transferred to operators established in the UK, which will expire as soon as Article 1, Paragraph 2 of EU Regulation 2019/216 applies. The EU said the remaining quantities for the relevant quota year of any unused quantity of the licences will be calculated using the shares previously communicated to the WTO. As far as the EU is concerned, the European Commission will continue to manage apportionment of the EU TRQs in the same way as it did in the past.
The EU said it has followed all relevant WTO procedures to advance the negotiations under Article XXVIII of the General Agreement on Tariffs and Trade (GATT). It has engaged in the negotiations on a regular basis and continues the process in good faith to ensure the talks are conducted in an open and fair manner. The EU said the new regulation will empower the European Commission to amend the EU's apportionment of TRQs in order to take into account any potential agreements concluded with members under Article XXVIII while ensuring certainty for WTO members.
Some members worried that the EU’s plan could lead to it cutting back on its TRQ access commitments to the WTO, which currently reflect a carefully negotiated balance among the entire membership. They suggested the EU preserve the quality and quantity of existing quotas under the no-deal scenario. Many members shared the view that the EU’s TRQ changes could have big impacts on exporting countries and create uncertainties in the global market due to the EU’s influence as the world’s biggest agriculture importer and exporter. Members urged the EU and the UK to fully honour their commitments at the WTO and ensure no member is left worse-off as a result of Brexit.
China's domestic support under scrutiny
Members raised many questions on China's domestic support notifications for 2011-2016, submitted to the WTO Secretariat in December 2018 (G/AG/N/CHN/42 - G/AG/N/CHN/47). In general, members welcomed China's submission of the long-awaited notifications and its efforts to fulfil its WTO notification obligations. At the same time, members expressed great interest in getting more details on China's domestic support measures, and expressed particular concerns with what they said was excessive “de minimis ” support (China´s bound support level is fixed at 8.5% of the total value of production) and the big increase in blue box and green box subsidies.
Regarding the reported de minimis breaches for cotton (2011-2016), for corn (2013-2016), for soybeans (2012-2016, except in 2013), for colza (2011) and for sugar (2012), China said the main culprits for the breaches are its "Temporary Reserve" programmes, the government´s stockpiling programmes which bought farmers´ products at administered prices.
Due to the high procurement price, the volume of commodities bought under the Temporary Reserve programmes and resulting government expenditure surged unexpectedly, China said. Since 2012, the Temporary Reserve programmes have been terminated for sugar, oilseeds, cotton and corn. Instead, China has introduced target price support and producer support for corn and cotton under its "production-limiting programme". With this policy reform, product-specific support in the current total Aggregate Measurement of Support (AMS) has been largely reduced.
As a developing country, China said it has to ensure the food security of its large population while attaching great importance to its WTO commitment. China has terminated the Temporary Reserve programmes which caused excessive support above “de minimis” limits and is looking for programmes more suited to China's needs during this transition. It admitted that it faces great challenges but will make every effort to implement the new programmes in line with its WTO commitments.
As for its blue box subsidies, China is the first developing country to use them. Some members asked for further information on China's “decoupled income support”, payments to farmers not related to prices or the amount produced. China explained the sharp surge of decoupled income support was the result of the major policy changes in 2016 when support for crop strains and seed programmes and payments for general services on agriculture supplies stopped. In order to compensate farmers' losses, the government decided to give direct payments to farmers with contract land. China confirmed that this decoupled income support will remain stable in 2017-2019.
Asked why it increased direct payments in "regional assistance programmes” (2015-2016), a green box support programme, by 87% (CNY 220.378 billion), China said it is to achieve the goal of eradicating poverty by 2020, and that the large sum was allocated to support agriculture development in poverty-ridden regions where agriculture is the main source of livelihood. In that vein, the central government provides financial transfers to local government which can decide how to use the money for local development projects most suitable for local needs.
China said the notification for 2017 is now being prepared and is expected to be submitted in 2020 or 2021 depending on the availability of data.
Members thanked China for its efforts to bring its notifications up to 2016. Some were concerned that for many years, China had breached its WTO commitments on de minimis support. One member urged China to submit the outstanding notifications as soon as possible. Another member noticed China had begun to shift its support from amber box to less trade distorting support. It welcomed this trend and expressed interest in following up on this.
Counter-notification on India's domestic support to pulses
Canada and the United States submitted a counter-notification (G/AG/W/193) on India’s support for pulses during the market year 2016-2017, including chickpeas, pigeon peas, black matpe, mung beans and lentils. Three previous counter-notifications had targeted India’s support for wheat and rice (G/AG/W/174 and G/AG/W/178/Corr.1 ), cotton (G/AG/W/188) and sugar (G/AG/W/189).
Canada and the United States said that, as the world’s biggest consumer, producer and exporter of pulses, India's policies impact many exporting countries. They used publicly available data to conclude that India has substantially under-reported the value of its market price support (MPS) for pulses. Contrary to India’s reported number of 1.5% of total value of production, Canada and the US believed that India’s MPS support for pulses was actually between 31% and 85%, exceeding its de minimis limits (for India, its limit is 10% of the total value of production) and running afoul of its WTO commitments.
The US and Canada claimed there are a set of specific methodological issues in India’s notifications that are inconsistent with WTO regulations. For example, India reported support levels in dollars rather than rupees, included only volumes actually purchased as eligible production for the purpose of determining support levels and failed to report total value of production. In addition, India only provided aggregate MPS support for five pulse products without breaking down figures according to each product.
Australia registered as a co-sponsor of the counter-notification. It shared the overall concerns of Canada and flagged quantitative restriction on imports as another serious issue in India’s agricultural policy. It urged India to comply with its WTO obligation on transparency and invited India to take part in further discussions.
India reiterated its commitment to transparency and highlighted that it is keeping its notifications up to date as a developing country. India considered that the counter-notification was inaccurate because it is based on incomplete and misleading information. India said its minimum market price support for pulses, a key ingredient in the Indian diet, was to ensure nutrition supply for 195 million poor people, adding that it was a very small quantity.
India insisted that eligible production is only the volume actually purchased by the government. With respect to the methodology, India repeated that it has been consistent in its notification methodology since 1995. India said it is willing to submit value of production figures provided other members do so.
A few members agreed on the need to examine India’s policies, underlining that this is an important function of the Committee. One member supported Canada's and the US push for India to change the methodology used in the notifications.
Regular review of agriculture policies
The Committee reviewed many other policies related to the three pillars of agriculture trade: market access, domestic support and export competition. The full list of questions from members can be found in G/AG/W/194. The questions and replies can also be found in the WTO's Agriculture Information Management System (AG-IMS).
With respect to monitoring outstanding responses to questions in the Committee review process, the Chair noted that the WTO Secretariat produced a document for the meeting summarizing outstanding responses from 2012 to 2018 (G/AG/W/195). This document shows that members made good progress in addressing outstanding responses, especially from the most recent years (2016 and 2017). For those two years more than a third of the responses that were outstanding at the beginning of 2018 have now been provided.
Implementation of Nairobi Ministerial Declaration on elimination of export subsidies
The Chair noted that out of the 16 members with export subsidies reduction commitments in their schedules of commitments, eight members had their revised draft export subsidies schedule fully certified pursuant to the Nairobi Decision on Export Competition, thus making the commitments binding under WTO rules. They are Australia, Norway, Israel, Switzerland, Colombia, Uruguay, the United States and South Africa. Canada and the EU had submitted their draft revised schedules some time ago but these were not certified yet and Mexico had circulated on 10 January its draft revised schedule.
Several members provided updates on their domestic efforts to incorporate the 2015 Nairobi Ministerial Decision into their WTO schedule of commitments.
Brazil and Indonesia confirmed they were working towards finalizing the submission of their draft revised schedules. Iceland said it will formally submit its revised schedule to the WTO very soon. Turkey said it is reviewing the final version of its draft schedule and hoped to submit soon.
The 2015 Nairobi decision required developed members to immediately eliminate their remaining scheduled export subsidy entitlements and for developing members to eliminate their export subsidy entitlements by the end of 2018, with some transitional exceptions granted.
Enhancing transparency and the Committee's review process
Norway continued its appeal to improve the timeliness and completeness of notifications in its new submission RD/AG/69/Rev.2 (two earlier submissions were G/AG/W/185 in September 2018 and RD/AG/65 in November 2018). Norway highlighted that its new document had been expanded to cover more comprehensive data in order to better explain the current state of play.
Members welcomed Norway's submission. A number of developed members noted the practical challenges faced in complying with deadlines set out in G/AG/2. Members agreed that ambitious but doable deadlines for notifications in agriculture were only one element in a broader transparency picture. Equally important are the completeness and quality of the notifications. Members called for experience sharing in this regard and noted that the WTO online notification submission system would contribute to enhanced transparency.
The WTO Secretariat outlined the progress made in enhancing the functions of the Agriculture Information Management System. The new system will allow members to better track repeated questions and to track the questions with pending responses. It also informed members that the pilot phase of the new online notification function will start in March with ten volunteer members and it will eventually be ready for the entire membership to use in June. The Secretariat also announced its plan to organize an advanced workshop on 30 April-3 May to train 30 government officials from developing countries on how to use AGIMS for notifications.
The Chair noted that G/AG/GEN/86/Rev.34, circulated on 15 February, reflects the current status of compliance with notification obligations of WTO members. The Chair commended China, Turkey and Japan on their conscientious efforts to update their notifications since October 2018. Meanwhile, she pointed out that a significant proportion of domestic support (36%) and export subsidies (34%) notifications remained outstanding for the period 1995 to 2017. She urged members to keep updating their notifications, with a view to enhancing transparency in agriculture trade.
The next meeting of the Committee on Agriculture is tentatively scheduled for 25-26 June 2019. An agriculture symposium will be held on the margin of the June meetings.
More information on the work of the Committee on Agriculture is available here.
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