WTO Farm Talks Chair Urges Members to Accelerate Work for Buenos Aires Ministerial

27 July 2017

Governments must “significantly accelerate” their work on farm trade topics ahead of the WTO’s eleventh ministerial conference in Buenos Aires this December, says a new report from the chair of the agriculture negotiations, Kenyan ambassador Stephen Karau.

The report, prepared for a negotiating session late last week, was read out by Norwegian ambassador Harald Neple, who stood in for Karau in his absence.

The document summarises the results of the chair’s informal consultations with negotiators, and came as governments submitted various new negotiating proposals and informal papers. (See Bridges Weekly, 20 July 2017)

Karau concluded that “different topics are at different levels of maturity.” For example, many delegations considered that a substantial outcome at the ministerial conference was “within reach” on agricultural domestic support and in talks on how current farm subsidy rules affect developing countries’ ability to buy food at minimum prices under their public stockholding programmes.

He described talks on cotton and on agricultural export restrictions as being at a similar stage of progress. However, he also noted that some members “expressed doubts about the possibility of reaching substantial outcomes on any of the topics under consideration.”

Twelve working weeks left

However, Karau also warned trade officials that only twelve working weeks remained ahead of the conference in Argentina, and noted that talks had not yet moved into “a real intensive negotiation mode.”

Members would need to move into text-based negotiations soon, both for topics on which a substantial outcome is expected in Buenos Aires and for issues which could be addressed as part of a work programme to be agreed at the ministerial, Karau said.

He also underscored that progress on agricultural trade topics was inevitably linked to countries’ broader objectives for the ministerial conference.

“Priorities, process, and prospects in agriculture must be seen in the context of overall priorities, process and prospects for MC11,” Karau said, using an abbreviation to refer to the eleventh WTO ministerial conference.

Domestic support

The chair reported that WTO members are roughly split into two groups. One group favours an overall limit on agricultural domestic support, either as a fixed monetary value or as a “floating” limit related to the value of production. The other group calls for the elimination of current entitlements to use trade-distorting support classified as “amber box” as a prerequisite for any other reforms.

While the EU and Brazil have put forward a proposal for an overall limit on domestic support, China and India have argued that existing amber box entitlements should be eliminated first. (See Bridges Weekly, 20 July 2017)

Karau also said that countries favouring an overall limit had different views on what this should cover. In particular, they diverged on whether production-limiting support in the WTO’s “blue box” should be included, and whether developing countries’ input and investment subsidies for low-income, resource-poor producers should be covered.

The EU, Brazil, and a group of some Latin American countries have said that the priority should be tackling trade-distorting support, irrespective of whether this is allowed under “amber box” limits or whether it is counted under “de minimis” ceilings that are calculated as a share of the value of production.

In last week’s meetings, Japan, Switzerland, and other countries in the G-10 group of countries with highly-protected agricultural sectors were critical of the suggestion that blue box support should be subject to new disciplines, trade sources told Bridges.

Meanwhile, most developing countries oppose any suggestion that limits be introduced on their ability to provide input and investment subsidies for low-income, resource-poor producers. This support faces no limits under current WTO rules.

“Reducing trade-distorting domestic support is a priority for virtually all delegations,” Karau said in his report, while adding that countries’ views on how to go about it still differ “significantly.”

Public stockholding: G-33 proposal

The G-33 coalition of developing countries tabled a new proposal on public stockholding for food security purposes, which would exempt developing countries from having to count food purchased at minimum prices towards their overall limit on trade-distorting support at the WTO.

The proposal is almost identical to an earlier submission from November 2015, but includes the addition of an annex requiring developing countries to submit further details about the programmes that would be covered. (See Bridges Weekly, 26 November 2015)

Agricultural exporting countries have argued that more transparency is needed on how developing countries buy food for these programmes, and have warned that the release of food stocks on global markets could distort trade, potentially also undermining food security elsewhere.

The G-33 would require countries benefitting from the new arrangements to provide data such as the quantity of food purchased and released under the programme; the prices at which the government buys and sells the stock; the total volume of production; as well as trade data on the value and volume of any exports and imports.

However, many agricultural exporting countries have said that they would prefer to use a decision agreed at the 2013 Bali Ministerial Conference as a template, rather than the November 2015 proposal from the G-33. (See Bridges Daily Update, 7 December 2013)

At the WTO’s Nairobi ministerial conference in 2015, trade ministers reiterated their intention to pursue a “permanent solution” to the problems that many developing countries say they face under existing WTO farm subsidy rules in this area. In Bali, ministers had said they would do so by the time of the eleventh ministerial conference, though the Nairobi decision does not refer to this date. (See Bridges Daily Update, 19 December 2015)

While last week’s paper from the EU and Brazil proposed addressing public stockholding jointly with domestic support, the G-33 have argued against establishing a linkage between the two areas.

Export restrictions

Karau also reported that “broad support” existed among countries for Singapore’s ideas on how countries could improve transparency around the use of agricultural export prohibitions and restrictions.

A new proposal from the Asian trading nation would have countries provide at least 30 days’ notice before introducing these measures. Current WTO rules simply require countries to provide written notice “as far in advance as practicable.”

Least developed countries (LDCs) would be exempt from any new commitments, the proposal says. The LDC group had proposed stronger rules on agricultural export restrictions in a separate negotiating submission two years ago. (See Bridges Weekly, 22 October 2015)

Singapore’s proposal would also require WTO members to refrain from imposing export prohibitions or restrictions on humanitarian food aid that is bought by the UN’s World Food Programme (WFP). At their Cannes summit in 2011, the leaders of the G20 group of major advanced and emerging economies agreed to ensure that food aid purchases were unaffected by such measures, but trade ministers meeting at the WTO biennial ministerial conference shortly afterwards were unable to agree on a similar commitment. (See Bridges Weekly, 9 November 2011 and 7 December 2011)

Cotton: draft proposal discussed

Karau reported that he had convened meetings on cotton which had included discussion of a draft proposal prepared by the C-4 group of West African cotton-producing countries – Benin, Burkina Faso, Chad, and Mali.

The C-4 countries have long argued for cuts in the level of trade-distorting support provided by wealthier countries, on the basis that this disadvantages poor producers in West Africa.

The EU-Brazil proposal tabled last week singled out cotton for special attention, and recalled ministers’ past commitments to ensure that the sector is addressed “ambitiously, expeditiously and specifically.” (See Bridges Weekly, 20 July 2017)

The chair said that he had convened consultations on cotton involving the C-4 countries and also Argentina, Australia, Brazil, China, Colombia, the EU, India, Pakistan, and the US.

“Most participants reiterated their support for a meaningful and specific outcome on cotton domestic support,” the chair observed. However, he also noted that “a couple of participants” were less optimistic, given their assessment of the overall prospects for the negotiations.

In the US, ongoing lobbying efforts by domestic cotton producers have recently led to lawmakers from the US Senate and House of Representatives writing to President Donald Trump and Secretary of Agriculture Sonny Perdue to call for a temporary support programme for cotton ginners to be made permanent. (See Bridges Weekly, 16 June 2016)

Trade sources told Bridges that the US Administration’s stance on farm trade and the WTO was still one of the major unknowns in the run-up to the Buenos Aires ministerial. US Trade Representative Robert Lighthizer said in June that Washington does “not advocate a meeting that seeks major deliverables or significant negotiated outcomes,” while saying the ministerial should still be a success. (See Bridges Weekly, 29 June 2017)

While Dennis Shea, vice chairman of the United States-China Economic and Security Review Commission, has been nominated to the post of US Ambassador to the WTO, he is still pending Senate confirmation.

ICTSD reporting.

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