Azevêdo warns WTO Members of "precarious" situation as TFA, food stockholding talks resume (republished)

24 September 2014
A resolution to the deadlock over whether to link the implementation of the WTO’s Trade Facilitation Agreement (TFA) to finding a permanent solution on public food stockholding is still “far from evident,” Director-General Roberto Azevêdo told ambassadors in Geneva on 15 September.

The informal meeting at the level of Heads of Delegation held on September 15 – HoDs, in trade shorthand – kicked off what is expected to be a busy period of consultations as WTO members try to break through the impasse, which caused them to miss a key deadline for ratifying the Protocol of Amendment for the TFA in late July. (See Bridges Weekly, 31 July 2014)

The Protocol is necessary in order to bring the TFA – a global deal aimed at easing customs procedures and reducing red tape at the border – into the WTO’s legal framework. From there, WTO members will then be able to individually ratify the agreement, which was finalised at their ministerial conference in Bali, Indonesia last December, in their domestic legislatures.

Azevêdo: “strict parallelism” impossible

Advancing the TFA protocol, however, now appears to be intrinsically linked to finding some sort of deal between India and its fellow WTO members that answers both New Delhi’s concerns regarding public food stockholding while at the same time preserving the integrity of the Bali package.

India has insisted that it will not back the adoption of the TFA protocol unless it sees significant progress on a permanent solution on food stockholding. India said in July that it hopes to see this permanent solution by end-December of this year.

An interim solution is currently in place, having also been agreed at December’s WTO ministerial conference in Bali. This solution was meant to serve until a permanent one could be negotiated, with the understanding that the latter should be ready in time for the WTO’s 11th ministerial conference in 2017.

The interim solution essentially involves the adoption of a due restraint mechanism, or “peace clause,” which commits members not to file legal challenges on subsidised purchases of farm goods under existing public food stockholding programmes. In turn, those WTO members wishing to use the flexibility provided by the peace clause would need to provide more information on the scale and type of support being provided to their farmers.

“On the issue of the Bali decisions, there seems to be a clear interplay between concerns relating to the negotiations on public stockholding for food security purposes and the adoption of the protocol of amendment on the Trade Facilitation Agreement,” Azevêdo during the HoDs meeting.

“However, we know that strict parallelism is not possible,” he continued, noting that the different Bali components were designed with their own individual timetables.

US and EU back peace clause “clarification”

In his intervention during the informal meeting, US Ambassador Michael Punke confirmed that his country would be willing to provide some clarifications to India regarding how long the interim solution would hold, should a permanent solution not be ready by the original 2017 target.

“If the issue is one of clarification, the United States is ready – as we were in July – to clarify ambiguity concerning the duration of the due restraint mechanism, so long as such clarification occurs coincident with adoption of an appropriate [Trade Facilitation] protocol of amendment and does not entail a reopening of the Bali package,” Punke said. 

The US will not, however, accept anything that would entail linking TFA implementation with determining a permanent solution on food stockholding. “We and many others would see it as fundamentally rejecting the Bali package,” he said. “That is untenable.”

The US ambassador highlighted, however, that it is still not clear to all WTO members what India actually wants – and knowing the answer to that question is key to determining “whether breaking the current deadlock is possible.”

“The simple, threshold question is, which position does this member hold?” he asked.

Separately, the EU confirmed that it too would be open to backing a “confirmation of the open-ended nature of the interim solution,” if that is what India seeks. However, the EU added, the only “realistic way” to move forward will require a clear understanding that the TFA Protocol will be adopted “without links or conditions.”

TNC meeting on 6 October

An informal meeting the following day of the Committee on Agriculture also failed to yield significant advances, with members reportedly differing on whether talks on the “post-Bali” issues could continue if the TFA protocol had not been adopted.

Sources say that members were also at odds over which forum to use for the food security discussions. At the WTO, discussions on agriculture are held either in the regular Committee on Agriculture, which deals with implementing the existing Agreement on Agriculture as well as monitoring members’ commitments, or in the “special session,” which involves agriculture-related negotiations. 

The agriculture special session is slated to meet next week, and the Preparatory Committee on Trade Facilitation will be meeting on 29 September. Negotiating group chairs have also been directed to hold consultations of their own. (See Bridges Weekly, 10 September 2014)

The results of these upcoming meetings will be reviewed at a 6 October meeting of the Trade Negotiations Committee (TNC), Azevêdo said during the HoDs meeting. The TNC is tasked with the overall Doha Round trade talks, and is chaired ex-officio by the Director-General.

In the meantime, the WTO chief told members, the upcoming weeks of consultations should show a “sense of real commitment and real urgency,” cautioning them against pursuing a business-as-usual approach.

The negotiations are still in a “very precarious” situation, the global trade chief said, noting that he was “not sure that the scale of the risk is fully appreciated by all.”

ICTSD reporting

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