WTO Agriculture Talks: Chair Urges Shift from Reflection to Action

21 July 2016

The chair of the WTO’s agriculture negotiations has told delegations that they need to move from reflection to action, in an informal meeting on Monday that was open to all members of the organisation.

Vangelis Vitalis, the New Zealand ambassador chairing the talks, also shared a set of questions which he said could now be used to structure the negotiations on farm trade issues, sources confirmed to Bridges.

These drew on a flurry of recent communications from negotiators responding to his call for their inputs to the talks, and covered long-standing issues such as farm subsidies as well as newer topics like export restrictions. (See also Bridges Weekly, 23 June 2016 and Bridges Africa, 6 July 2016.)

Vitalis said that the “specific suggestions” members were now sharing supported his assessment that negotiators are indeed moving towards a more active phase in the talks.

Domestic support the “clear priority”

Vitalis said that agricultural domestic support remains “the clear priority for the overwhelming bulk” of the trade body’s membership.

He also said that most are convinced that the issue should be a central plank of any negotiated outcome emerging from the next WTO ministerial conference, due to be held at the end of next year.

However, trade sources told Bridges that the positions of key countries remain far apart. The US in particular is adamant that China must agree to make concessions on its own farm subsidy schemes as part of any negotiated outcome – which Beijing says would be unacceptable.

Measuring support: different approaches

An informal paper tabled on 12 July by four agricultural exporting countries sought to shed more light on aspects of the issue.

Australia, Chile, Colombia, and New Zealand, who co-sponsored the paper, examined data on trade-distorting support for nine different agricultural products between 2008 and 2010, as well as non-product specific support that was classified as trade-distorting.

Although the four countries do not present any conclusions from this data, the numbers suggested that, relative to the other countries examined, China’s non-product specific support was unusually high in dollar terms – although was less than the support provided by Brazil, Canada, and the US when seen as a percentage of the value of production.

EU and US support for products such as dairy and sugar was high in both absolute terms and relative to the volume of production, while for other products – such as cotton – support was relatively low in absolute terms but not as a share of the production value.

Vitalis again reminded members of the difficult state of their farm subsidy notifications, citing widespread delays in reporting current data to the trade body’s secretariat. (See Bridges Weekly, 12 May 2016).

Some negotiators also noted that the chair had asked members whether product-specific limits were needed to prevent trade-distorting farm support from being disproportionately concentrated on a handful of farm goods.

Market access: a trade-off with domestic support?

The chair told the meeting that some delegations had floated the possibility of a trade-off between the level of ambition in market access and domestic support, an option which he said was “intriguing.”

However, he noted that while some members were seeking tariff cuts and other market access concessions, others had defensive interests, with some fearing the loss of existing preferential access.

An informal paper from Paraguay, tabled on 15 July, was among those setting out further questions for members to address – although, as with other recent submissions, many members told the meeting that they had not had enough time to review it properly.

The Paraguayan paper looks at issues around tariff peaks and escalation – the latter involving the practice of levying progressively higher duties on more heavily-processed products.

Export competition

Vitalis said that some members were keen to pursue further talks on issues around agricultural export competition – an area of negotiations dealing with export subsidies and other measures with similar effects, such as export credits.

However, a breakthrough agreement establishing new rules in this area at the WTO’s Nairobi ministerial conference last December has dampened the appetite of some countries to pursue further talks on this subject. (See Bridges Daily Update, 19 December 2015)

The chair said that one member had suggested that negotiators should not be diverted into addressing “an unproductive line of enquiry.”

However, many negotiators from the Cairns Group of agricultural exporting countries were determined to pursue talks in all three agricultural negotiating areas identified in the Nairobi declaration, namely market access, domestic support, and export competition.

Vitalis reminded members that they had received specific instructions from ministers to address all three areas.

Transparency on export restrictions

A set of questions tabled by Singapore on 13 July called for more transparency on agricultural export restrictions – a topic which the chair said he was classifying among “other issues” in his consultations.

Singapore asked whether members had enough clarity on existing rules governing requirements on notifying agricultural export restrictions to the WTO, along with exceptions to these requirements for developing countries.

Vitalis said that reactions to the proposal in his bilateral consultations had been broadly supportive – although he also said that some countries had indicated they would not be prepared to begin talks on further disciplining export restrictions.

Public food stockholding: what approach for “new” programmes?

Vitalis convened a separate meeting on Tuesday, again open to all members, to discuss public food stock purchases in developing countries at government-set prices.

WTO members agreed at their Bali ministerial conference nearly three years ago that they would not bring these programmes to dispute under the trade body’s farm subsidy rules while they negotiate a permanent solution to the problems that some developing countries say they face. (See Bridges Daily Update, 7 December 2013)

However, trade sources told Bridges that many developing countries wanted any such solution to cover new programmes that might be introduced in the future – a demand which agricultural exporting countries reportedly found unacceptable.

The Bali agreement only refers to programmes “existing as of the date of this Decision” – thereby covering those in countries such as India that were buying food at administered prices as part of their public stockholding schemes at the time, but not others, including in many poorer countries, that lacked the financial resources to do so.

Special safeguard mechanism

WTO members were also due to convene on Thursday 21 July, at the chair’s invitation, to discuss progress towards a new special safeguard mechanism that developing countries would be able to use to protect domestic producers from sudden import surges and price depressions.

A decision at the Nairobi ministerial conference last year confirmed that developing countries would be able to make use of this instrument, but without giving any details of how it would work in practice.

Farm exporting countries have argued that any such instrument should be part of broader talks on agricultural market access, although the G-33 coalition of developing countries with significant populations of smallholder farmers have resisted this assertion.

Vitalis told WTO members that further negotiating sessions would be held in October on the special safeguard mechanism and public stockholding, alongside a meeting of the special session of the Committee on Agriculture, which is tasked with farm trade talks at the organisation.

ICTSD reporting.

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