WTO Farm Talks: Negotiators on Final Lap Before Bali Ministerial

17 October 2013

Trade officials have entered the last stretch of talks before the WTO's ninth ministerial meeting in Bali, Indonesia, with an outline deal for a "small package" of measures now due to be wrapped up by the first week of November - a month before the conference.

Sources told Bridges that only a few issues would remain for ministers to decide upon after 8 November, with members now set to make a concerted bid to close outstanding gaps during the next two weeks.

Negotiators are aiming to develop a three-pronged package for the Bali ministerial, drawn from the overall Doha Round - a series of trade talks that were launched in 2001, but which ministers later declared at an ‘impasse' when they met in Geneva two years ago. This December's package would, if achieved, ideally include an agreement on trade facilitation, select agriculture issues, and some components related to developing countries.

The chair of the agriculture negotiations, New Zealand ambassador John Adank, was this week expected to prepare draft negotiating text that trade officials could consider, following an informal meeting open to all WTO members which he convened last Friday.

"The priority now is to capture in a more concrete way the convergence that I have described earlier," he told members at the end of the meeting.

The chair reported on consultations he has held on three topics: food purchases at administered prices in developing countries, as part of public stockholding programmes; disciplines on export subsidies and similar measures; and new rules on the administration of tariff rate quotas for imports.

Food stockholding: possible waiver?

Adank told members that he had held consultations on eight aspects of an eventual deal on food stockholding, where the G-33 developing country coalition has sought greater flexibility to purchase food at administered prices from low-income, resource-poor producers. (See Bridges Weekly, 14 November 2012) The group argues that price inflation in recent decades has eroded their ability to run some types of programmes covered under WTO rules, although a number of other countries are eager to ensure that any additional flexibility does not create new trade distortions or undermine food security in other countries.

Trade officials are exploring whether countries could temporarily agree to refrain from bringing legal disputes, in exchange for various safeguards and conditions that would apply to any country wishing to make use of this flexibility.

Legal analysis at the WTO secretariat has indicated that members could consider four main options for a possible agreement in this area, Adank said. These included a waiver; a different form of ministerial decision; a ministerial declaration; and a chairperson's statement.

Adank told the group that, by discussing in some detail transparency requirements, conditionality, and safeguards, "members had already taken steps towards elaborating quite specific requirements on which the flexibility will be dependent" - suggesting that the agreed mechanism might be more likely to take the form of a ministerial decision rather than one of the other options.

However, he warned that many countries saw the legal form of the agreement as being linked to associated conditions and safeguards.

He also said he expected the mechanism to apply automatically to countries, once the agreed conditions and safeguards had been fulfilled.

Coverage: a limited number of crops?

Adank told the meeting that members had "informally agreed" on the broad scope of application of the proposed new flexibility, which he said would cover cases in which there is "a clear risk" of breaching countries' agreed ceiling on trade-distorting amber box payments - known as AMS, or the "aggregate measure of support" at the WTO.

However, they remained divided over whether countries should have to commit to a limit on the number of staple crops that would be covered by the new flexibility or not. Some negotiators had suggested that countries should agree to limit the coverage to "traditional" staple crops.

Transparency: "most convergence"

"It is fair to say that this has been the element on which we have seen the most convergent and detailed focused discussion so far," Adank told the group with regards to transparency.

Trade officials have said over the last two weeks that they feel optimistic about the progress that had been achieved in this area. (See Bridges Weekly, 3 October 2013)

Adank said that, in order to benefit from new flexibility in this area, governments would have to ensure that their farm subsidy notifications to the WTO were up-to-date. They would also have to provide some additional information to other members.

"We have already had a very extensive discussion in this area and are, I believe, close to an agreement on these various elements," the chair said.

Safeguards: are other countries affected?

Negotiators had also had a "rather conceptual" discussion around safeguards that could help ensure that other countries' trade or food security was not harmed by food stockholding programmes elsewhere in the world, Adank reported - although he noted that "more discussion" on this topic was required.

On the duration of the flexibility, the chair told the meeting that two groups of countries could be identified. One group would like a clear time-bound solution - for example a two-year period - while the other would like the flexibility to apply until a permanent solution could be found.

A third option could be to establish a time-bound arrangement and a work programme aimed at a more permanent solution, but without any direct relationship between the two, the chair said.

Post-Bali: members' views diverge

"Work of some sort will need to continue post‑Bali to explore progress on more enduring solutions," Adank told the group, although he warned that views still diverged on what form this future work should take.

Although some countries had emphasised the importance of addressing the issues raised by the G-33, others had advocated for a "more open approach."

Export competition: no legal changes?

Trade officials told Bridges that they were concerned that Bali might not deliver more than a political declaration of the importance of action on eliminating export subsidies. "There is no appetite to change current rules," one source said.

Adank told the meeting that a number of members "do not see a legal change to commitments as possible in the context of Bali" - despite others seeing this as "the central part" of talks over agricultural export subsidies and equivalent measures.

WTO members agreed to eliminate these instruments at the global trade body's fifth ministerial conference in Hong Kong, eight years ago. A proposal to cut current ceilings for export subsidies, submitted last year by the G-20 developing country group, has made little headway in the face of opposition from the US and EU.

Adank told the meeting that work on this issue after Bali would need to take into account "the wider context of the WTO agriculture negotiation and more generally the context of the Doha Round as a whole."

TRQ administration: US, China at odds

Trade sources told Bridges that differences between the US and China were preventing further progress on a proposal to overcome administrative barriers to imports, as part of a review of rules on tariff rate quotas, or TRQs in the jargon used by negotiators.

However, Adank told the meeting that "there are fewer issues remaining to be resolved" on TRQ administration than there are on either the G-33 proposal or on export competition issues.

Members continue to differ, though, on the extent to which developing countries should be able to benefit from "special and differential treatment" on proposed new arrangements aimed at easing import requirements in cases where quotas are persistently not being filled.

New text, more consultations

Adank told the meeting he would continue to hold consultations "in different formats" throughout this week. He would then hold another informal negotiating meeting with all members before the end of the month.

The chair said his aim was "to continue to extend the areas of convergence and progressively build upon them elements of drafting for further consideration."
"This week, I expect John Adank will come up with draft text on a peace clause," one source familiar with the consultations confirmed.

ICTSD reporting.

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