Agriculture policy review
Referring to the record number of questions raised in the committee in 2018 (close to 190 questions), the chair commended the high level of engagement which "reflects the value that members place on the review function of the committee". Lively discussions ensued as members exchanged views on various agriculture policies.
United States: Market Facilitation Package
Some members raised concerns over the US announcement on 23 May that it would initiate a second tranche of the Market Facilitation Package (MFP), with funding of up to US$ 16 billion to assist farmers hurt by trade disruptions. Some members recalled that in the last committee meeting in February, the United States stated its MFP, initially announced in 2018, was intended as a one-time, short-term package to assist farmers affected by "unfair" treatment from US trading partners. Members asked the US to provide more detailed information on its overall expenditures in 2018 and 2019.
The United States said payments to producers for the MFP for the 2018 crop year totalled US$ 8.57 billion as of 7 June. It stressed that the MFP for the 2018 crop year and the MFP announced on 23 May 2019, are separate programmes. The US also said that the MFP announced on 23 May is currently in a rule-making process and will be notified as appropriate in its 2019 domestic support notification.
Some members expressed concerns that the United States would implement similar subsidy packages in the future. They said these measures are unprecedented and will have an impact on both world market prices and trade flows. Members said they look forward to examining more information on the new measures.
European Union: TRQ plan after Brexit and Irish beef compensation
Members asked the European Union for more clarity on its proposed apportionment methodology for its WTO in the case of Brexit without a withdrawal agreement (EU Regulation (EC) 2019/216). The methodology was criticised for not taking into account trade flows between the EU-27 and the United Kingdom and for leaving other WTO members to compete with the UK for reduced EU-27 WTO TRQ volumes should the United Kingdom leave the EU without an agreement.
The European Union repeated its commitment "to achieving the orderly withdrawal of the United Kingdom from the EU, including a comprehensive trade arrangement with the UK for the future". It further stressed that the EU continues to believe that continued free trade between the UK and the other member states of the EU is the best way to ensure access to markets without the need to use each other’s WTO TRQs in the future. Noting the difficulty in predicting the future, the EU said it will continue the negotiations under the terms of Article XXVIII of the General Agreement on Tariffs and Trade (GATT) and try to be open and transparent in the process.
One member voiced its deep concerns with the changing EU TRQ schedule and warned it risks decreasing other members' import quota access in favour of the United Kingdom. It urged the EU not to alter its commitment to other WTO members because of its changing relations with the UK. Some members registered interest in the issue and said they will closely follow future developments.
Meanwhile, the European Union explained its plan to compensate Irish beef farmers for any fall in beef prices suffered as a result of the United Kingdom’s exit from the EU. This package would include €50 million from the EU, and the Irish government would be able to match EU funding, bringing the package to €100 million. The EU said the legislation fixing the details for the announced measures has not yet been adopted. Ireland has until 31 July to inform the EU how it plans to implement the measures. The EU will come back with a more detailed reply once the measures are adopted. The EU also indicated that it does not have a plan to compensate farmers in other agriculture sectors.
India: agriculture policies
India received the most questions in the committee's policy implementation monitoring process. The queries targeted multiple agriculture policies, including some new export subsidy programmes, an income guarantee scheme to support small farmers, and the outstanding issue regarding the methodology used in its notifications.
India admitted the new Transport and Marketing Assistance (TMA) scheme is an export subsidy but insisted that, as a developing member pursuant to paragraph 7 of the 2015 Nairobi Ministerial Decision on Export Competition, India "shall continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture until the end of 2023". As India's TMA scheme was introduced in 2019, it is in compliance with the Nairobi decision, India said.
One member welcomed India's Pradhan Mantri Kisan Samman Nidhi Yojana (PM-KISAN) income guarantee scheme for its switch from indirect income support to direct income support, and encouraged India to further expand such schemes to cover more products.
A number of questions were posed to India on its domestic support notifications (G/AG/N/IND/12, G/AG/N/IND/13, G/AG/N/IND/15) covering varied themes including the classification of support measures, calculation methodology, request for separate notifications to explain new or modified exempt measures and the inclusion of the value of production data (VoP) data.
India said it will submit notifications to explain its new support measures which are claimed as exempt from reduction. It will also submit its value of production data (VoP) through the WTO's Agriculture Information Management System (AG-IMS) soon. In response to questions on the issue of calculation methodology, India argued that the same methodology had been consistently employed in its notifications since 1995-96.
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/199. The questions and replies can also be found in the WTO's AG-IMS (in the section "Search Q&A Submitted since 1995").
With respect to monitoring pending responses to questions in the committee review process, the WTO Secretariat document circulated on 28 May (G/AG/W/195) finds that, as of 13 June 2019, the number of pending replies for the period 2012-2017 had been brought down to 55. The chair encouraged members to continue their efforts to reduce outstanding responses and collectively enhance transparency in the committee.
Fourth Annual review of the Nairobi Ministerial Decision on Export Competition
Members undertook their fourth annual review of export competition aimed at monitoring the implementation of the Nairobi Ministerial Declaration on Export Competition of 19 December 2015, in relation to export subsidies, export financing support, agricultural exporting state trading enterprises and international food aid.
The discussion was based on a revised background document circulated by the WTO Secretariat (G/AG/W/125/Rev.10) on 10 May, which noted that 29 replies to the Secretariat questionnaire were received. The chair urged members who had not replied to submit their answers by 12 July. The Cairns Group– a group of agricultural exporting nations lobbying for agricultural trade liberalization - also circulated a document (G/AG/W/201 and its corrigendum 1.) on 29 June which laid out its observations on members' implementation of the Nairobi Decision based on the data compiled in the Secretariat's background document and members' notifications.
Speaking on behalf of the Cairns Group, New Zealand reminded members that the monitoring function of the committee is "fundamental to achieve transparency of the WTO". It called for members' further efforts to improve transparency through notifications and questionnaire responses.
Members took the floor to answer the questions contained in document G/AG/W/198. Many members echoed New Zealand's concern and supported the call for addressing information gaps in the committee.
Meanwhile, updating the situation regarding modification of schedules pursuant to the Nairobi decision, the chair noted that, as of 15 June, out of the 16 members with export subsidies reduction commitments in their schedules of commitments at the time of adoption of the decision, ten members had their revised draft export subsidies schedules fully certified. They are: Australia, Norway, Israel, Switzerland, Colombia, Uruguay, the United States, South Africa, Mexico and Iceland. Canada and the European Union submitted their draft revised schedules which are awaiting certification, and Turkey circulated its draft revised schedule a few days ago.
Brazil, Indonesia and Venezuela provided updates on their domestic efforts to incorporate the 2015 Nairobi Ministerial Decision into their WTO schedule of commitments.
Brazil and Indonesia both confirmed they were going through internal processes towards finalizing the submission of their draft revised schedules. Venezuela was still awaiting further information from its capital.
The 2015 Nairobi decision stipulated that developed members immediately eliminate their remaining scheduled export subsidy entitlements and that developing members eliminate their export subsidy entitlements by the end of 2018, with some transitional exceptions granted.
The chair declared the next dedication discussion on export competition will take place during the June 2020 meeting of the committee.
Review of the Bali Ministerial Decision on TRQ Administration
The committee continued its deliberations on the review of the operation of the Bali TRQ decision in its informal meeting on 24 June, with the goal of finalizing a report on the review at the meeting 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. TRQs allow quantities imported within the quota to be charged lower import duty rates than those imported outside the quota.
The discussion was principally based on the revised draft Report of the Review that the chair circulated among all members prior to the meeting, incorporating inputs from the informal committee meetings and the chair's consultations with members since February.
Progress was made with regard to the text. However, one member submitted drafting suggestions for the recommendation dealing with the extension of the timeline in relation to paragraph 4 of the underfill mechanism. Some members indicated that more time is needed to study the new proposal.
Members supported the chair's proposal to extend the timeline for the committee to finalize the review to the October 2019 meeting of the committee. To that end, the chair expressed her intention to organize additional informal meetings and consultations to assist members in their efforts.
Counter-notification of the Philippines' special safeguard measures
In its counter-notification(G/AG/W/200), Indonesia took issue with the Philippines' trigger price for instant coffee and extracts of coffee within its special safeguard (SSG) measures notified to the WTO on 23 September 2002 and 30 April 2018. Indonesia is of the view that the Philippines' trigger price fails to take into account the import price for the reference years 1987 and 1988 but is solely based on the import price for 1986, which "far exceeded the correct average price of imports of instant coffee and extract coffee as determined by Article 5.1(b) of the AoA".
The Philippines explained that, as no importation of instant coffee and extracts of coffee happened in 1987 and 1988, it made sense that only the price of 1986 was taken into consideration. Indonesia contested the product scope of instant coffee and coffee extracts used by the Philippines in calculating the trigger price and argued against the exclusion of roasted chicory, a major substitute ingredient in instant coffee. Indonesia urged the Philippines to correct its trigger price notifications accordingly.
The Philippines took note of Indonesia's concerns and hoped the dispute could be resolved through bilateral channels.
Enhancing transparency and the committee's review process
Norway introduced a new room document, a summary of members' notifications on domestic support and market access. Norway noted the situation on pending notifications had slightly improved compared to last year. Outstanding domestic support notifications were down from 36% to 34% and outstanding market access notifications were down from 9% to 8%.
Some members welcomed Norway's submission and noted their readiness to engage in discussions on this topic. Some agreed with Norway in considering the existing G/AG/2 notification timeframes to be unrealistic. Other members were not convinced that extending G/AG/2 timelines would necessarily improve transparency.
The WTO Secretariat reported on the progress made in enhancing the functions of the Agriculture Information Management System. Modifications to the system will improve members' ability to track repeat questions in the AG IMS and to identify which questions still have pending responses. These enhancements to the system were expected to be completed by the second half of 2019.
Information session on online notification system
The Secretariat held a short information session on 25 June to update members regarding the work on a web-based notification system. The Secretariat reported that the system is now being tested by a group of ten pilot members and is expected to be launched to all members in the third quarter of 2019. Since the system went live for the pilot members in April this year, all ten members have started using it to draft notifications and five have already submitted notifications online.
The Secretariat also informed the committee of the advanced workshop on agriculture notification taking place on 30 April-3 May which trained 32 government officials from developing countries on how to use AG IMS for notifications.
The chair noted that G/AG/GEN/86/Rev.35, circulated on 14 June, reflects the current status of compliance with notification obligations of WTO members. The chair commended Cote d'Ivoire, the Republic of Korea, the Philippines and Thailand for making conscientious efforts to bring their notifications up to date. Meanwhile, she pointed out that a significant proportion of domestic support (34%) and export subsidies (33%) notifications remain pending for the period 1995 to 2017. She urged members to keep updating their notifications and engage actively in the review process.
Symposium on the role of trade in the global agri-food system
During the two-day symposium, held on 27-28 June, members and experts in agriculture policy and trade from both developed and developing countries met to discuss the role of trade in the global agri-food system. The agri-food system is increasingly being shaped by climate stress and resource depletion, digital and technological innovation, as well as evolving consumer preferences. Discussions focused on four main dimensions: the role of trade in the agri-food system, the impact of border measures on economic outcomes, public spending in agriculture, and innovations in addressing the challenges faced by small producers.
Participants stressed the important role that agriculture can play in poverty reduction and discussed ways to further explore the potential of technological innovation to help build resilient agri-food systems, particularly in structurally disadvantaged rural areas. Big data and IT have potential, but for that to be beneficial to farmers cost reductions are necessary in both software and hardware, and some consideration has to be given to address the specific constraints faced by smallholder producers.
On the policy dimension, while examining some traditional government interventions to enhance rural incomes and livelihoods, such as border measures and support mechanisms, participants discussed the importance of creating the enabling conditions for sustainable agri-food systems, including investments in infrastructure and research. Many recommended that governments consider how their policy interventions will enhance or restrict flexibilities, especially in a world where there is increased uncertainty due to climate change.
Participants also reaffirmed the importance of WTO rules in enhancing connections within the agri-food system. Through constantly improving its rules, a more nimble WTO framework can provide the flexibility for WTO members to respond to changing conditions, such as climate change and digital innovation, so that trade can continue to play a vital role in creating resilient, inclusive global food systems.
The full programme is here.
Information session on international food aid
A half-day information session on international food aid was held on 24 June, with the participation of high-level representatives from the UN Food and Agriculture Organization (FAO), the World Food Programme and the OECD as well as the Chairman of the Food Assistance Convention. This session provided a comprehensive overview of the current landscape regarding international food aid and food assistance disciplines, the role of the respective international actors, and food assistance data collection practices, including the current challenges faced in this regard and the efforts undertaken to overcome them. Presentations were delivered on the following themes: food assistance, statistic framework, world food programme, monitoring food aid, agreement on agriculture, LDCs and NFIDCs.
The concept note is here.
The next meeting of the Committee on Agriculture is tentatively scheduled for October 2019.
More information on the work of the Committee on Agriculture is available here.