AGRICULTURE

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Presentations

Presentations by the WTO Secretariat, Paraguay, the United States and the Russian Federation prepared the ground for the discussions on agricultural market access, an important topic that has not been the subject of active engagement among members since the preparatory process for the Nairobi Ministerial Conference in 2015.

In response to the request of members, the Secretariat made a presentation on agricultural tariffs and the various data systems and online tools that members can consult to access the relevant information on tariffs and other market access issues. These data sources include the WTO's World Tariff Profiles, the Tariff Download Facility (tdf.wto.org), Tariff Analysis Online (tao.wto.org) and the International Trade and Market Access Data interactive tool on the WTO website. The Secretariat also highlighted its ongoing efforts to further improve and streamline the various data systems that it maintains.

Stressing that “market access has a big contribution to make to the reform process as envisaged in Article 20 of the Agreement on Agriculture”, Paraguay presented its joint paper with Uruguay that was submitted in July (JOB/AG/139 ) entitled “Market access alternatives”. The paper points out some major issues in market access, including the tariff overhang (“water” between the bound tariff and the applied tariff), high tariffs and complex tariff structures.

Offering a recap of the previous negotiating approaches and tariff reduction formulae, Paraguay underlined some specific market access restrictions currently faced in agricultural trade - namely non-ad valorem (AV) tariffs, tariff peaks, tariff escalation (higher import duties on finished or semi-processed products than on raw materials), tariff rate quotas (TRQs), the special agricultural safeguard (SSG) and non-tariff measures. Paraguay also reminded members of the various challenges faced in the market access negotiations and posed specific questions on the desired level of ambition in market access and potential sequencing of the various issues forming part of the discussions.  

The US presentation took a closer look at the six areas it identified in its July paper (JOB/AG/141 ), namely bound versus applied tariffs, complex tariffs, high tariffs, issues with TRQs, the special agricultural safeguard (SSG) and regional/preferential trade agreements. It presented data in respect of these six themes and highlighted the performance of certain members, including the biggest importers and exporters.  

The United States stated that the implementation of tariff policies and their complexity vary across members and emphasized the need for technical engagement towards a greater understanding of such policies. It urged members to enhance transparency with regard to tariffs and other market access policy instruments through timely notifications and invited other members to undertake technical analysis of the relevant issues. 

Russia highlighted its continued interest in the SSG issue with a new technical paper entitled “the usage of special agricultural safeguards” (JOB/AG/145 ). Following the agriculture tariffication process of the Uruguay Round negotiations, the SSG mechanism allows about 30 WTO members to temporarily increase import tariffs on specific agriculture products in cases of import surges or a decline in prices.

Russia noted that the usage rate of the SSG is very low: only eight out of 33 members entitled to apply the SSG used this instrument in the past five years. It begs the question as to whether the SSG is truly needed, Russia said. In response to specific questions on data and methodology, it emphasised that its paper is a result of preliminary research and work would be undertaken to further investigate the matter.

Members' discussions

Members engaged in a discussion on a wide range of issues, including water in the tariffs, tariff reduction formulas, tariff simplifications, tariff peaks, TRQs, regional trade agreements (RTAs), erosion of preferences, tariff escalation as well as the SSG.

Discussions on various technical issues, which were taking place after a break of several years, were welcomed by many members, but there were clear differences between members on the broad issues of linkage and sequencing between market access and domestic support. Some members also referred to the linkage with market access in sectors outside of agriculture.

On the issue of tariff simplification, some members stressed the varying level of complexity that the various types of non-ad valorem tariffs entail. The point was also made that "water" in tariffs may be an important policy flexibility and reducing it would constitute a concession in the negotiations.

A number of developing members emphasized the importance of special and differential treatment (S&D) for developing countries while some importing members referred to non-trade concerns. Members who have joined the WTO since 1995 - through accession negotiations - emphasized the need to acknowledge the extensive commitments taken on during their membership negotiations.

Regarding the SSG, some members called for eliminating the SSG as an early confidence-building outcome since it was rarely invoked and seemingly easy to abolish. However, members with SSG rights said the elimination can only be considered in the wider context of the reform process.

Some members referred to broader food security and sustainability challenges and highlighted the need for a balance between domestic production and accessing international markets to fulfil domestic food needs. In addition, some members shared concerns about the "thin" global agriculture markets and the associated price volatility risks and emphasized the need to strengthen global trade through open markets and enhanced market access.  

In spite of the complexity and divergences in the discussions, the Chair was "heartened" by the fact that all members stand ready to constructively engage in further discussions and to advance agricultural reform.

Special Safeguard Mechanism (SSM)

On behalf of the G33 (Coalition of developing countries pressing for flexibility for developing countries to undertake limited market opening in agriculture), Indonesia made a presentation in the dedicated session on the SSM. It recalled the repeated mandates from the Doha Ministerial Declaration (WT/MIN(01)/DEC/1), the Hong Kong Ministerial Declaration (WT/MIN(05)/DEC) and the Nairobi Ministerial Decision (WT/MIN(15)/43- WT/L/978) for an SSM for developing countries. The SSM, once agreed, would  allow developing countries to temporarily increase import tariffs in cases of import surges or a decline in prices.

Indonesia reiterated the socio-economic conditions in developing countries, especially in low-income and least developed countries (LDCs), where 60%-70% of employment depends on the agriculture sector and where the average landholding size is very small. Indonesia justified the need for an SSM to support food security and rural development by highlighting international price volatility and its potential impact on the livelihoods of many small and poor farmers. Indonesia also associated the importance of the SSM with the United Nations’ Sustainable Development Goals (such as SDGs 1, 2 and 17.4).

A number of developing members supported the G33 demand for an SSM. One member shared its own experience of increased sugar imports, which put severe pressure on its domestic sugar sector and strongly supported the case for a safeguard mechanism for developing countries. Some G33 members expressed the view that an SSM was not intended to block normal international trade but to address the impact on small farmers' livelihoods.

Other members stressed that they could envisage an outcome on an SSM only in the context of a broader outcome improving market access. These members questioned some of the underlying assumptions behind the G33 position and asked proponents a number of specific questions, including on the country exemptions, the need for an SSM despite "water" in tariffs, transmission of internal prices to domestic markets, the effect of an SSM in potentially aggravating price volatility and why the negotiating efforts should not be devoted to addressing agriculture distortions rather than seeking an SSM to remedy those distortions.  

On the issue of "water" in tariffs, the G33 argued that the SSM would be a more targeted remedy compared to the general raising of tariffs on the relevant products. The G33 also expressed a willingness to further engage in technical discussions.  

Next steps

Commending the good interactions and candid substantive exchanges among members, the Chair encouraged WTO members to engage in further technical discussions in the coming months. He cautioned against invoking difficult linkages at this stage. Based on members' engagement and written contributions, he proposed to keep open the possibility to revert to the topics already addressed - i.e. domestic support, public stockholding for food security purposes, market access and the SSM - during the forthcoming Committee meetings in November and December.  

The Chair underlined the concerns expressed regarding the current adverse global trade environment and said that this has a broader effect on the negotiations and is not just limited to agriculture. "Therefore, we should continue our efforts and engagement so that we can get ready to make decisions and compromises in a more enabling and conducive negotiating environment," he said. He also urged members to adopt a sense of urgency, especially as they move into 2019, when there would normally be a Ministerial Conference, even if the dates for the next Ministerial Conference have been fixed for June 2020.

The next meetings of the Committee on Agriculture are scheduled for 15-16 November. They will include discussions on export competition and export restrictions.

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