The meeting marked the end of the facilitator-led informal process of technical discussions under the guidance of the negotiations chair, Ambassador Gloria Abraham Peralta(Costa Rica), which started last September. Facilitators made their last oral reports. In early June, they will submit their written reports presenting the state of play on the possible elements for an agricultural outcome at MC12. The chair intends to draw key ingredients from these reports to form a consolidated assessment report and a negotiating text before the summer break.
Australian Ambassador George Mina delivered the joint statement on behalf of the Cairns Group and the African Group. “This ministerial decision must be of sufficient ambition and specificity to enable meaningful reform of trade and production domestic support, with a view to enabling fairer trade in agriculture,” the two groups proclaimed, stating their shared objective is to realize “ambitious, concrete and equitable” agriculture reform which “forms part of an essential response of the multilateral trading system to the global impact of the COVID-19 pandemic.”
Domestic support is considered by most delegations as the most crucial topic, yet many divisions remain. The statement, however, shows the two groups' commitment to the same goal and to surmount the hurdles together. As Mauritius put it for the African Group: “We may not always agree on everything, but it's important that we have the same objectives, and that we keep moving towards actually achieving something that would help us.”
Many members expressed support for the joint statement and declared a strong desire for a substantive outcome on agriculture with domestic support at its core.
In addition, calls for a permanent solution on the issue of public stockholding (PSH) for food security purposes have continued to enjoy broad support. Many members acknowledged the need to reach an outcome on PSH at MC12 given the unprecedented challenges regarding food security caused by the pandemic. Members continued to hold divergent views on several technical issues, such as programme and product coverage of a permanent solution and transparency requirements as well as how to enhance safeguard provisions. More broadly, members also debated the question of whether a permanent solution should be a stand-alone outcome or part of an overall package on domestic support.
Transparency has been widely reaffirmed as a “low-hanging fruit” for an MC12 outcome. Apart from the general call for improving transparency on notifications, members highlighted two particular aspects: improving the transparency of members' applied tariffs, especially for shipments en route, and submitting notifications on COVID-19-related export-restrictive measures. Members also explored ways to enhance transparency on cotton-related policies as well as on measures related to export competition.
Many members emphasized repeatedly that transparency outcomes for MC12 is not enough on their own. A considerable number of members considered it doable to reach consensus on an export restriction exemption for World Food Programme (WFP) humanitarian food purchases. Some members suggested a work programme on market access in parallel to the domestic support reforms to maintain balance in eventual outcomes. The need to reach a balanced and fair result across the board acceptable to all was also stressed by some delegations.
With regard to the proposed special safeguard mechanism (SSM), the G33 (a group of developing members) is continuing to conduct a review of past SSM documents and ways to calibrate its ambition, eyeing a meaningful outcome at MC12. Some members cautioned about the time constraint and stressed the lack of political will to move forward.
As members enter the last leg of negotiations in the run-up to MC12, they praised the successful conclusion of the facilitator-led process, which has provided a useful complementary tool for in-depth analysis in support of the formal negotiation track. Some members asked to maintain such an exercise in the future to continue building trust and laying the foundation for common ground.
New submissions and members' discussions
WTO members tabled five new submissions for discussions.
Brazil made a presentation on two new papers (JOB/AG/195 and JOB/AG/196) which analysed members' use of subsidies under Articles 6.2 and 6.5 of the Agreement on Agriculture respectively. In the discussions that followed, some members said the blue box support (Article 6.5) is a legal tool to help reform support from the amber box to the green box. Some members argued the Article 6.2 subsidies (subsidies in favour of developing countries to address development needs) should not be considered as trade distorting as other forms of support under Article 6. Some members stressed the most distorting support is the aggregate measurement of support (AMS) entitlements above de minimis levels enjoyed by a few members. In response, Brazil said the reason to examine all boxes of support is for inclusive rulemaking in order to achieve an outcome acceptable to all.
Canada introduced its paper (JOB/AG/197) entitled “Transparency Issues in Domestic Support Notifications”. Cairns Group members supported Canada's view that “Value of Production” (VoP) should be included in members' notifications to help with cross-country comparisons and calculations. They argued it would not add new burdens to members since they already used this data under the existing rules for notifying subsidies. Some developing members, however, asked for their capacity constraint to be considered in meeting this requirement.
Costa Rica's paper (JOB/AG/199) offers a detailed, formula-based methodology for setting subsidy entitlement reductions, a proposal which triggered a heated discussion among members. Several other Cairns Group members supported placing a fixed cap on subsidies and applying the proportionality principle (members reduce their domestic support in proportion to their contribution to the problem). Some developing members said the proportionality principle is “too simplistic” without examining the exact distorting effect of each box of subsidies. Some developing members also said Article 6.2 subsidies should be excluded from reductions. Costa Rica said the purpose of including all boxes of subsidies in the analysis is to establish a starting point for discussions and does not imply that all boxes have the same trade-distorting effect. It invited all members to use the formula to do a simulation on the exact reduction that would be the result for its domestic support entitlements. This way, each member can be better prepared for future discussions, it said.
Paraguay presented its joint paper (JOB/AG/198) co-sponsored by Argentina, Brazil, Ecuador, Ukraine and Uruguay, proposing a framework for negotiations on market access leading up to and beyond MC12. Several Cairns Group members agreed it is both realistic and necessary to achieve an outcome on elements of market access at MC12. Some members welcomed the paper's acknowledgment of need for sequencing in the implementation of reforms, given the different negotiating priorities.
Members heard the facilitators' final oral reports on the seven main topics of the agriculture negotiations, including domestic support, market access, export competition, export restrictions, PSH and the SSM.
On domestic support, the facilitators — Mr Greg MacDonald (Canada), Ms Fenny Maharani (Indonesia) and Ms Elisa Olmeda (Mexico) — recapped the discussions, which included some key cross-cutting issues (special and differential treatment, transparency, proportionality, and per-farmer support). In their preliminary assessment, they reaffirmed members' commitment to achieving an outcome on domestic support at MC12. However, they noted that positions remained far apart and that not one proposal, idea or concept had so far attracted consensus. To reconcile the calls for an outcome on domestic support at MC12 with the divergent views and priorities, the facilitators suggested members make a timely assessment of the level of ambition they wish to achieve for an MC12 outcome (e.g. substantive rules, framework, work plan, transparency) and to avoid further entrenchment of long-standing positions.
On market access, the facilitator — Mariya-Khrystyna Koziy (Ukraine) — summarized the exchanges in the technical discussion and an open-ended meeting held in May, which examined two papers: JOB/AG/198 and JOB/AG/185/Rev.2. She noted members' continued interest in transparency, the possibility of an agreement on a future work programme as well as a suggestion about the Bali TRQ review as a potential outcome for MC12.
On export competition, the facilitator — Ms Laura Gauer (Switzerland) — said she convened a small group meeting in May with the proponents of export competition — the African, Caribbean and Pacific Group, and the African and LDC Group members. This allowed proponents to provide some clarifications on the transparency elements they envisaged. She noted the insufficient sense of urgency for a substantial outcome on export competition at MC12 but members seemed to support the notion that the transparency element could contribute to a broader transparency outcome. She also acknowledged the synergy between the negotiation track and the on-going second triennial review of the Nairobi Decision.
The facilitator on export restrictions, Mr Leonardo Rocha Bento (Brazil), updated his work on transparency and the proposed World Food Programme (WFP) exemption. He remains optimistic that despite the current stalemate on the proposal, it is realistic to expect an outcome on the matter at MC12. He continues working with non-proponents of the WFP initiative to resolve their concerns, with an aim of facilitating an agreement with proponents on compromise language. Proponents of the transparency issue will submit a concrete proposal before the summer break, he said.
The facilitators on cotton, Mr Sergio Carvalho (Brazil) and Mr Emmanuel Ouali (Burkina Faso), said recent discussions in various formats confirmed the transparency issue is the starting point for cotton outcomes. It was, for instance, suggested that the cotton questionnaire could be incorporated into existing notification tools.
The facilitator on SSM, Ms Renata Cristaldo Oviedo (Paraguay), reported on discussions at a recent meeting involving both the proponents and non-proponents. She is of the view that regardless of the fundamental political division on how to interpret the mandate for SSM (a standalone issue or linked to market access), “it appears to be unlikely” to reach agreement on the technical design of an SSM within the next six months prior to MC12. She hopes that ministers can “set a clear set of objectives and principles that will deliver the needed political momentum to move the discussions and technical engagement post MC12”.
The facilitator on PSH, Mr Craig Douglas (Jamaica), reported on discussions in the recent meeting on safeguards and anti-circumvention and summarized members' replies to his questions. He outlined the seven ideas he had heard during his consultations that may assist in arriving at an outcome, including ways to avoid the trade-distorting effect of stockholding, differentiated treatment for PSH programmes based on their size, and agreeing on a list of products that could be eligible for inclusion in a PSH programme.
The chair thanked facilitators for their valuable work over the past few months and offered her preliminary assessment on the state of play of agriculture negotiations.
The chair said the unprecedented COVID-19 crisis has ramped up the urgency and the importance of achieving an outcome aimed at improving global food security and livelihood security. The current question, she pointed out, is not about the ambition per se with most members agreeing in particular on the need to reform domestic support disciplines. The real question is “about the size and the nature of the next step to be agreed at MC12 to prepare the ground in the best possible manner for effective and successful post MC12 negotiations,” she said.
She summed up three groups of divergent thoughts dominant in the meeting's discussions: 1) the first group, composed of developed and developing members (referring to the Cairns Group), is of the view that the central piece for a MC12 outcome is a framework agreement on domestic support that would set a goal and include some principles and parameters for the reduction of trade-distorting domestic support entitlements. 2) the second group, composed of a large group of other developing country members, argues that an outcome on agriculture should address as a priority the following topics: domestic support with the elimination of AMS above de minimis as a first step while preserving Article 6.2 support; and a permanent solution on PSH, SSM and cotton. 3) the third group insists that a realistic outcome on agriculture should focus on transparency enhancing elements, including on changes in applied tariffs and consignments en route, with only a few additional immediate deliverables, such as a decision on an exemption from export restrictions for World Food Programme (WFP) humanitarian food purchases and a roadmap on the post-MC12 way forward on the various topics under negotiations.
To bridge the gaps among different groups, the chair urged members to move swiftly from talk to action, and to contribute new submissions and inputs to overcome differences. In that vein, she proposed a two-pronged approach. First, heads of delegations will be engaged in the collective effort to search for consensus on what could form a balanced and realistic yet ambitious MC12 outcome on agriculture. In her view, domestic support will constitute the core of the MC12 outcome package, supplemented by public stockholding and the WFP export restrictions exemption. She also stressed the importance of all topics and the necessity of keeping a balance among them. Second, members need to intensify the technical work and fine-tune possible options that could potentially garner consensus, including in particular on transparency-related issues.
Moving forward, the chair reiterated the sense of urgency, asking members to switch to the focused negotiations immediately with a spirit of compromise and flexibilities. “The focused negotiations have to start now and not after my first draft text is issued,” she said. She also announced her plan to meet with heads of delegations in coming weeks, with the full support of Director-General Ngozi Okonjo-Iweala and her possible involvement as necessary.
The next meeting of the Committee on Agriculture in Special Session is tentatively scheduled for 21 June.
Background information on the work of the Committee on Agriculture is available here.
The agriculture glossary is available here.