WTO Agriculture Negotiators Review Buenos Aires Ministerial Options

8 June 2017

The chair of the WTO agriculture negotiations, Kenyan Ambassador Stephen Karau, has suggested that farm trade talks on domestic support may need to continue beyond the organisation’s eleventh ministerial conference, scheduled to take place this December in the Argentinean capital of Buenos Aires.

At a negotiating meeting on 1 June, Karau said some countries had emphasised that the ministerial “should not be seen as the end of the journey.” The session was the first meeting convened by the chair to report on his consultations since taking up the role in April. (See Bridges Weekly, 27 April 2017)

While there was “near universal” consensus on the importance of a Buenos Aires outcome on agricultural domestic support, countries continued to differ on how to achieve this, the chair said.

However, in a dedicated session of the negotiating body the following day, Karau reminded negotiators that the ministerial also represented the agreed deadline for establishing a “permanent solution” to the problems some developing countries say they face under WTO farm subsidy rules when buying food at minimum prices, as part of their public stockholding programmes.

“We must explore how trade can contribute to making nutritious food available to those in need, and to providing people with enough income to access this food where and when needed,” said WTO Director-General Roberto Azevêdo, in remarks at a workshop on 31 May organised by the G-33 group of developing countries. The coalition, which includes countries such as China, India, and Indonesia, has emphasised the importance of a permanent solution in this area in WTO talks.

A Buenos Aires work programme?

At the negotiating session on 1 June, Karau told trade officials that some members were considering whether the Buenos Aires ministerial should seek to agree a “work programme” setting out topics for further negotiation after the meet.

However, he also conveyed his impression that all WTO members were “genuinely and strongly committed to a successful Ministerial Conference in Buenos Aires.”

A recent negotiating paper by the Cairns Group of agricultural exporters is among those looking at options for Buenos Aires “and beyond,” while a new submission by Paraguay and Peru on market access issues also envisages talks continuing in a structured process through to the twelfth ministerial conference in 2019. (See Bridges Weekly, 24 May 2017)

At the last WTO ministerial conference in Nairobi, Kenya, in 2015, members were unable to reach consensus on whether to reaffirm negotiating mandates adopted in Doha fourteen years previously – meaning that talks are continuing without a clear roadmap for the future. (See Bridges Daily Update, 19 December 2015)

However, members did reaffirm their strong commitment to advance negotiations on remaining Doha issues, including agricultural domestic support, market access, and export competition – the latter of which refers to export subsidies and equivalent measures.

In Geneva last week, Karau cited the “current challenging environment for globalisation and international trade” as among the factors informing countries’ assessment of what would be possible in the run-up to the ministerial.

One developing country source said that a lack of clarity on the US stance in particular was affecting countries’ assessment of the negotiating process. Although the US Senate recently confirmed veteran trade lawyer Robert Lighthizer as the US Trade Representative, other senior positions in the administration remain unfilled – including the country’s WTO ambassador. (See Bridges Weekly, 18 May 2017)

Linking issues

In sessions last Friday, the chair also explained how countries were making negotiating “linkages” between otherwise discrete issues.

While G-33 members have emphasised the importance of negotiating a “special safeguard mechanism” which developing countries will be able to use to raise tariffs temporarily in cases of sudden surges in import volumes or price depression, agricultural exporters have argued that progress in this area should be linked to market access concessions.

Similarly, while the G-33 has underscored the need for WTO members to deliver on previous commitments to negotiate a permanent solution on the issue of public stockholding for food security purposes, some agricultural exporting countries have said that this should be linked to progress in addressing trade distortions arising from agricultural domestic support.

In a new negotiating submission, the G-33 argued that developing countries now have an “urgent need” for an effective and operational special safeguard mechanism, so as to be able to address the negative effects of short-term food price volatility on resource-poor small-scale farmers.

Two separate papers from the group, on public stockholding and the special safeguard mechanism, respectively, both called for more constructive engagement from others to achieve concrete outcomes by December. Exploring areas of possible compromise, such as the breadth of agricultural products to be covered by the new safeguard, could be one way forward, the group said.

New negotiating papers

The chair told trade officials that as many as 14 new papers had been tabled by WTO members since the last meeting of the agriculture negotiating body in November. (See Bridges Weekly, 24 November 2016)

These include proposals on domestic support from the Least Developed Countries (LDC) group in January, as well as from the African, Caribbean, and Pacific (ACP) group last November, and a negotiating paper from the Cairns Group. (See Bridges Weekly, 2 February 2017, 24 November 2016 and 24 May 2017)

The Cairns Group has called for new limits on trade-distorting domestic support, as well as measures to tackle the concentration of this support on a limited number of products, and has supported the initiative of the C-4 group of African countries to reduce cotton subsidies.

WTO members disagree on how best to proceed, including over how to define “trade-distorting” support and what types of special arrangements should be made for developing economies.

“I think the fact that we’ve had a lot of proposals is a good sign,” one negotiator told Bridges. However, the source also noted that countries were showing few signs of flexibility, with most members still repeating well-known positions.

Paraguay and Peru: improve access to markets

Two Latin American farm exporting countries, Paraguay and Peru, put forward a new negotiating paper calling for WTO members to agree on improving agricultural market access. The submission is dated 24 May.

The sponsors suggested that this should be done in a two-step process that simplifies complex market access barriers first, and then reduces them.

Instead of tariffs, many countries use complex formulas to limit imports of the most sensitive farm goods, which are often expressed as a function of an imported product’s weight (e.g. €100 per tonne).

The new submission argues that governments should convert barriers to their agricultural markets into simple “ad valorem” tariffs – meaning duties expressed as a straightforward percentage of a product’s value.

New WTO commitments based on these simpler duties should be established by the organisation’s twelfth ministerial conference in 2019, the proponents say.

These commitments also should lower market access barriers by tackling instances of unusually high tariffs or “tariff peaks”; reducing higher tariffs on more processed farm goods, known as “tariff escalation”; and lowering levels of in-quota tariffs.

The proponents also say that developed countries should identify unusually high tariffs set above 100 percent of the product value, and then cut the gap between the maximum WTO limit and the actual applied tariff level for these products. Developing countries should do the same for tariffs set at 150 percent or higher.

The exact level of cuts and tariff peaks would be open to negotiation, the sponsors indicated.

Karau told the meeting that many countries nonetheless saw market access talks as “a lower priority.”

Russia: eliminate special agricultural safeguard

A new submission from Russia, tabled on 29 May, calls for countries to agree to eliminate the “special agricultural safeguard” provided for under Article 5 of the WTO’s Agreement on Agriculture.

This tool was established in 1994, at the end of the Uruguay Round of trade talks, to allow some 39 countries to raise tariffs temporarily to address sudden import surges or price depressions. Russia argues that the safeguard was meant only to be a transitional tool to help countries adapt to possible adverse effects arising from the liberalisation measures agreed at the time.

Moscow also claims that continuing to allow some countries to use the safeguard is unfair to newer members who are not permitted to use the instrument under their accession terms – such as China, Kazakhstan, Russia, and Vietnam.

According to Russia’s proposal, the safeguard clause would expire immediately for developed countries, starting from the date of adoption of the relevant decision, while developing countries could continue using it for three years on a gradually dwindling percentage of their overall tariff lines.

Last November, eight agricultural exporting countries made a similar call for the special agricultural safeguard to be eliminated. However, countries that have used it remain reluctant to phase it out. (See Bridges Weekly, 30 November 2016)

Singapore: sharing information on export restrictions

In a paper dated 26 May, Singapore called for more transparency in the use of agricultural export prohibitions or restrictions. The paper builds on an earlier submission tabled last year. (See Bridges Weekly, 21 July 2016)

Consumers in food-importing countries can be adversely affected by these measures, especially at times of sudden spikes in international prices for food and farm goods.

Singapore’s new paper asks whether a 30-day advance notification period might be “practicable” for exporting and importing countries. It invites countries to explore further how to improve transparency in this area, and asks whether export prohibitions and restrictions should apply to food bought for non-commercial humanitarian purposes.

The chair told participants at the 1 June meeting that the issue of export restrictions had emerged “as being of particular interest to a number of members.”

Looking ahead

The chair closed the 1 June meeting by urging members to redouble their efforts at engagement, suggesting they table their submissions “before the summer break,” which begins in eight weeks’ time. Karau also warned that only 21 working weeks remained until the Buenos Aires conference.

Trade sources told Bridges that an informal trade ministers’ gathering in Paris in the margins of the Ministerial Council Meeting (MCM) of the Organisation for Economic Co-operation and Development (OECD) on 7-8 June could be crucial in sending political signals about key countries’ expectations for the farm trade talks – along with the overall package of deliverables for Buenos Aires.

ICTSD reporting.

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