Agricultural domestic support in focus

Members presented three new submissions on domestic support to the agricultural sector — which is widely seen as a priority in the talks by WTO members because of its impact on the ability of producers to compete fairly in global markets. The submissions included two that had been prepared by groups of countries — the African Group (JOB/AG/242) and the Cairns Group of agricultural exporting economies (JOB/AG/245) — and one by  Costa Rica (JOB/AG/243).

The African Group reiterated its call for caps on domestic support that exceeds the “de minimis” threshold, which is defined as a share of the value of agricultural production and set at different levels for developed and developing economies. They also proposed limiting some types of support which is currently classified as “green box” — meaning it is allowed without limit so long as it does not cause more than minimal distortion to trade and production.

The African Group submission analyses domestic support patterns across the WTO membership, drawing on a previous submission from Canada (JOB/AG/219). It also includes a proposed draft ministerial decision for adoption at the WTO’s 13th Ministerial Conference (MC13).

The Cairns Group submission focuses on support that is targeted at specific products and which is classed in the “amber” and “blue” boxes at the WTO (intended to cover the most trade-distorting forms of support and production-limiting programmes respectively). The group analysed the “entitlements” of WTO members to support their farm sector under current WTO rules, making the case that these entitlements are highly concentrated among a few members and on a few agricultural products, such as rice, wheat, dairy, bovine products and maize. The 29-page submission, which was circulated as an unrestricted document, includes graphs and tables setting out the group’s analysis.

Costa Rica’s submission proposes a new approach to capping, adjusting and reducing over time WTO members’ “entitlements” to provide domestic support. Costa Rica sees its proposal as a negotiating platform from which to kick off discussions. The proposal sets out a methodology for cutting these entitlements at the global level by 50 per cent over a ten-year period. Adjustments to a calculated baseline level would ensure developing economy WTO members would retain sufficient “policy space” — or flexibility — to support their farm sectors. Least developed countries (LDCs) would be exempt from the proposed caps and cuts, Costa Rica said.

After the submissions were presented, members discussed how best to define the scope of trade-distorting domestic support that should be reduced, the issue of the concentration of support on specific products, and the flexibilities for LDCs and net food-importing developing countries (NFIDCs).

United Kingdom highlights food export restrictions

A submission by the United Kingdom (JOB/AG/244) made the case that WTO members should pursue more focused discussions on the food security impact of export restrictions on agricultural products, based on data and informed by members’ experiences.

It reviewed the impacts of export restrictions as well as recent WTO discussions on the topic and current WTO rules and suggested a number of areas that trade officials could explore further. It also signalled the United Kingdom’s intention to make further submissions and proposals on the topic.

In the discussion at the meeting, several WTO members highlighted the importance of strengthening transparency regarding export restrictions, considering it an achievable outcome at MC13. The impact on LDCs and NFIDCs was stressed by several members, with some of them expressing their willingness to explore the suggestion of exempting the most vulnerable members from such food export restrictions.

However, a few members cautioned against diverting attention from issues such as domestic support, market access or public stockholding for food security purposes. Some members also emphasized the importance of export restrictions in safeguarding in some instances developing economies' food security, notably to address shortages, hoarding and speculation.

African Group reiterates call for new “special safeguard mechanism”

A submission from the African Group (JOB/AG/205/Rev.1) reiterated the group’s call for a new “special safeguard mechanism” (SSM) that would enable developing economies to raise tariffs temporarily in the event of a sudden import surge or fall in food prices.

The submission reviewed historical data on import surges in developing economies and presented a draft ministerial decision for members to consider for adoption at MC13.

In the subsequent exchange, which took place as part of a dedicated discussion on the topic, other WTO members reiterated their long-standing position that discussions on a new SSM take place as part of negotiations aimed at expanding market access for agricultural goods. Members in the discussions on SSM also referred to the “special countervailing measure” proposed in Costa Rica’s domestic support submission (JOB/AG/243) as a possible mechanism against subsidized imports.

Given the differences between members’ positions, the Chair noted that no workable way forward had yet been found. He emphasized that members needed to develop a common understanding of their expectations for possible outcomes at MC13.

Focused discussion on public food stockholding

The Chair convened a dedicated discussion on public stockholding for food security purposes  — where WTO members have agreed to pursue a “permanent solution” to the challenges some developing economies face under WTO rules when buying food at government-set prices under the programmes they have established in this area. Prior to MC12 in June 2022, a joint proposal (JOB/AG/229) was put forward on this topic by three negotiating coalitions: the African Group; the African, Caribbean, and Pacific Group; and the G-33, a group of developing economies which includes major traders such as China, India and Indonesia as well as smaller WTO members.

The Chair noted that proponents of this proposal favoured text-based negotiations on the topic with a view to achieving a permanent solution at MC13. However, other WTO members continued to argue for progress on the issue to advance as part of the overall negotiations on agriculture trade reform. These members emphasised the importance of basing negotiations on evidence about policies and markets. They also underscored the need to ensure that an outcome on public food stockholding is coherent with the broader outcome on agricultural domestic support.

Way forward

The Chair commended delegations for their hard work on the new submissions. He said that the progress in the talks was in line with the positive political momentum that was apparent when a sub-set of WTO trade ministers met in Paris in early June, many of whom recognised the importance of an outcome on agriculture at next February’s ministerial conference.

The Chair said that, following the meeting, he would carefully consider how to guide the ongoing discussions. He also encouraged members to meet and consult with him.

Next meeting

The next agriculture negotiation meetings are scheduled for 17-18 July.

More

The WTO's agriculture negotiations encompass various topics, including domestic support, market access, export competition, export restrictions, cotton, public stockholding for food security purposes, the special safeguard mechanism and the cross-cutting issue of transparency.

More on the WTO agriculture negotiations: WTO | Agriculture — negotiations

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