Regular review of members' agricultural policies
The committee continued to examine members' agriculture support policies, including those related directly or indirectly to exports. Twenty-one issues of concern were raised for the first time in the committee regarding agriculture programmes, policies and restrictions in Argentina, Canada, China, India, Japan, Morocco, South Africa, Tajikistan, Turkey, Ukraine, the United Kingdom, the United States, Viet Nam and four EU member states (Austria, France, Germany and Italy).
Argentina was asked to explain its new export restrictions on beef, including on how the measure conforms to the WTO rules. Turkey and Ukraine also responded to members' concerns on actual or proposed export-limiting measures. Canada received specific queries on its recent announcements to support the wine sector and measures to improve vulnerable consumers' access to food in the wake of the COVID-19 pandemic. Agricultural policy developments and financial support in some EU member states were subject to review. Japan explained its newly launched market development support for rice paddy renovation. Tax and tariff policy developments in Morocco, South Africa and Tajikistan were also subject to specific queries by members.
Members welcomed the United Kingdom's 2020 Agricultural Act and the direction of agricultural support policies that it intended to pursue; they simultaneously questioned the UK's calculation and amount of its proposed aggregate measurement of support (AMS) entitlement for farm subsidies in its WTO schedule of commitments.
India explained the reasons behind the recent increase in its cotton support and the US responded to some specific questions on its environmental and other support policies.
A number of specific notifications in the areas of tariff quotas as well as agricultural subsidies were reviewed at the meeting. India's two recent domestic support notifications invoking the Bali Ministerial Decision on Public Stockholding (PSH) for the breach of its rice de minimis limit received numerous questions, including on how India complies with the specific terms of that decision. In light of the safeguard provisions of the Bali PSH decision, India was also asked when it could provide outstanding information on support for rice other than under public stockholding.
Domestic support policies in the United States and recent support interventions, including in response to the COVID-19 pandemic, were subject to extensive review. Concerns were expressed on a sharp increase in the US's current total AMS in 2018 compared to a much smaller total amount in 2017. There were questions to the Republic of Korea, which reported a sharp rise in its current total AMS in 2017. Other domestic support notifications, including by Brazil, the EU, China and Nigeria, also figured in the committee discussions.
All questions submitted for this meeting are available in document G/AG/W/212. All questions and replies received are available on the WTO's Agriculture Information Management System (AG IMS).
Enhancing transparency in the committee
On the issue of transparency and efficiency of the committee's process for reviewing members' agriculture-related notifications to the WTO, the chair Maria Araceli Escandor of the Philippines noted two elements of the issue being: 1) timeliness and completeness of notifications from members, with specific concern regarding the large number of overdue notifications — especially in relation to domestic support and export subsidies; and 2) the importance of the timely and complete responses to questions raised in the review process. The chair urged members to redouble efforts in both these areas.
Follow-up to ministerial decisions
The monitoring of the Bali Tariff Rate Quota (TRQ) Decision was discussed. Members also continued the follow-up discussions on the recommendations approved by the General Council in 2019 following a review of the implementation of the decision.
The discussion on the Bali Decision focused on the future operation of paragraph 4 of the underfill mechanism, with the key issue being how to arrive at “closure” of an underfill matter for a developing importing member which does not achieve the required increase in the fill rate in the final stage of the mechanism. The deadline to reach an agreement on this matter is the end of 2021.
TRQs allow import quantities inside a quota to be charged lower duties than those outside. The mechanism was agreed as a means of allowing exporters some access to other countries’ markets when the normal tariffs on imports are high. The underfill mechanism deals with cases when the fill rate of a TRQ in any given year is below 65% or the fill rate is not notified. In the absence of an improvement in the fill rate or a satisfactory resolution of the concern, the importing WTO member may be obliged to change the management of its TRQs.
Follow-up on the Nairobi Decision on Export Competition
Members continued discussions on the implementation of the Nairobi Export Competition Decision, which commits WTO members to eliminate subsidies for farm exports. The decision was described by the WTO Director-General at the time as the most significant outcome on agriculture since the WTO was established in 1995.
With regards to the modification of schedules of commitments pursuant to the Nairobi ministerial decision, the situation has not changed since the last committee meeting: out of the 16 members with exports subsidy reduction commitments at the time of adoption of the Nairobi decision, 12 members had their revised schedules certified; Canada and the European Union circulated their draft schedules in 2017, but they are not yet certified. Brazil and Venezuela have yet to circulate their draft schedules. Brazil said it had nothing new to report beyond what it told the committee at its March meeting, that the Nairobi decision had been approved by Brazilian Congress.
The 2021 dedicated discussion on export competition will be conducted at the next committee meeting in September. The chair informed the committee that 24 replies to the WTO Secretariat questionnaire have been received so far. The 2021 export competition exercise is important, as for the first time all members, including developing members, are expected to reply to the questionnaire following the expiry of the five-year grace period for developing members.
The chair also reported on members' discussions on the second triennial review of the Nairobi Export Competition Decision. Paragraph 5 of the decision mandates members to review the disciplines contained in this decision every three years. The chair invited members to continue work aimed at identifying which deliverables could be envisaged in the context of this second review. She also asked them to identify which issues could be included as part of a specific post-review work programme and which issues are not mature enough to require any action as a result of the review, or that would be better addressed under the negotiations track.
COVID-19 and agriculture
Since September 2020, WTO members have included discussions on trade measures taken in response to the COVID-19 pandemic as a standing item on the committee agenda.
The WFP said it was of paramount importance to ensure well-functioning food supply chains; any export restrictions or quotas would inevitably hamper the timely and efficient delivery of life-saving assistance to the most vulnerable. The WFP considers the 12th Ministerial Conference to be a key opportunity for the WTO to contribute to Sustainable Development Goal 2 towards ending hunger and malnutrition. Any measure adopted by WTO members to facilitate the smooth movement of the WFP's goods for humanitarian purposes will help save lives, it said.
The FAO submission examined developments in global food and agricultural markets and trade in 2020 and 2021. Despite initial predictions of a likely significant contraction resulting from the COVID-19 pandemic, global trade remained remarkably resilient, with world agri-food markets and trade emerging as the most robust sector. Since mid-2020, a significant increase has been registered in the prices of agricultural commodities, with many reaching multi-year highs. The provisional forecast for the world food import bill in 2021 points to a record US$ 1.715 trillion, suggesting a 12% increase from the previous year. This may not, however, translate into a uniform increase of food availability as rising prices may raise unit costs of imports.
The World Bank said its Agricultural Commodity Price Index remained near its highest level since 2013, and as of 15 June was approximately 35% above its January 2020 level. Cereal prices remained approximately 43% higher than their January 2020 levels. These trends were observed despite the favourable overall agricultural commodity assessment. Strong demand for feed commodities, continued weakness of the US dollar, weather uncertainties in North and South America, higher energy and fertilizer prices, and policy initiatives in favour of biofuel production appear to be driving these price increases, which have been substantial and affect all commodity groups, it said.
Several WTO members took the floor to comment on the submissions, with many stressing the need to keep markets open and avoid disruptions to supply chains to ensure the food needs of vulnerable populations. Several underlined the importance of securing a WTO agreement on the exemption of WFP purchases from export restrictions.
The chair noted that these discussions provide an important opportunity for holistic engagement on COVID-19-related matters in order to appreciate the challenges posed by the pandemic on global agriculture and food systems and collectively reflect on ways to deal with the crisis and its aftershocks.
The chair also noted the creation by the Secretariat of a separate page on the WTO website for COVID-19 agricultural measures in an effort to enhance transparency on the actions of WTO members in this area.
Argentina, Brazil, Chile, Paraguay and Uruguay presented to WTO members the agricultural ministerial declaration by the Southern Agricultural Council (CAS) on “Principles and Values of the Region Regarding the Production of Food Within the Framework of Sustainable Development” (G/AG/GEN/187). The co-sponsors also shared the communication with the WTO Committee on Trade and Environment.
The next Committee on Agriculture meeting is scheduled for 23-24 September.
More information on the work of the Committee on Agriculture is available here.