WTO Agriculture Talks: Members Evaluate Negotiating Submissions, Eyeing 2020 Ministerial
The WTO’s agriculture negotiations resumed last week after the organisation’s annual August hiatus. While the discussions were mainly limited to reviewing negotiating submissions, analysis, and data, some sources indicated that the level of engagement seemed noticeably improved from recent meetings, with more planned to help refine the direction of the talks further.
Ambassador John “Deep” Ford of Guyana, the chair of the WTO’s Committee on Agriculture “special session” tasked with negotiating new farm trade rules, convened delegates for informal meetings on Friday 21 September, at which Australia and Canada both made presentations based on recent negotiating submissions.
The talks covered agricultural domestic support and the separate, though related, topic of public stockholding for food security purposes. Various low- and middle-income countries have argued that the WTO’s current domestic support rules do not provide enough flexibility for them to buy food at subsidised prices as part of their public stockholding programmes.
Canada presented analysis on domestic support by the Cairns Group of agricultural exporters, drawing on figures presented in a submission that the group tabled in July. The paper reviews domestic support from 2001 to 2014 for select WTO members that are significant exporters, importers, or producers, drawing on data that the countries themselves have reported to the global trade club.
Members also discussed a separate paper from Australia, which also looked at domestic support trends. In addition, the chair reported on his consultations on cotton, where the US has also tabled an informal paper. Sources said this could be followed by submissions from other members soon.
One Geneva-based trade official said that the talks were characterised by “frank discussion of details,” and a greater willingness of negotiators to engage more openly with one another, with another noting that the level of engagement seemed significantly improved from last year.
The reports of relatively improved optimism come just months after WTO members sparred over how to approach a possible work programme for the negotiations, in the wake of last December’s ministerial conference in Buenos Aires, Argentina, that led to no substantive outcomes on agriculture. (See Bridges Weekly, 31 May 2018)
What remains unclear at this stage, however, is what issues farm trade negotiators may prioritise in the months to come, as they work to determine what may serve as possible deliverables for the next WTO ministerial conference, which is planned for June 2020 in Astana, Kazakhstan.
Though many WTO members have repeatedly stated that reforming the organisation’s rules on the subsidies that governments can grant their farmers is a priority, political differences as well as disagreements over how to approach the issue on a more substantive level remain. The question of whether and how to tackle other topics, such as liberalising agricultural market access, has seen less engagement. Members have also shown diverging views on whether to negotiate more stringent disciplines on agricultural export restrictions.
At a negotiating meeting in May, Ford identified seven outstanding areas which members had told him they saw as priorities for the negotiations. In addition to domestic support, market access, export restrictions, and public stockholding, these included a “special safeguard mechanism” for developing countries to use in the event of sudden import surges or price depressions; export competition, covering measures seen as similar to export subsidies; and cotton. (See Bridges Weekly, 31 May 2018)
Ford is expected to convene further talks on other outstanding issues in the negotiations in the weeks and months ahead. Meetings are already scheduled on market access and a special safeguard mechanism, with the chair convening delegates for informal talks on 22 and 23 October.
However, Ford also emphasised the need for greater urgency in the negotiations if these are to deliver an outcome ahead of the next ministerial conference in June 2020.
Global trade climate looms over WTO negotiations
According to a Geneva trade official, tensions among major economic powers over trade were referred to repeatedly in the negotiating meeting last week. Drawing particular scrutiny was a planned domestic support package that the US Department of Agriculture announced in late July, which is due to take effect this month and could amount to US$12 billion.
This support is meant to help offset the costs that some US farmers are facing due to higher tariffs that other countries have imposed on their products, which are in response to tariffs that Washington itself has placed on various trading partners. The farm aid would be provided by the Commodity Credit Corporation (CCC) Charter Act, a law from 1948 that changed the CCC into a federal corporation. The original CCC dates back to 1933.
“The CCC Charter Act, as amended, aids producers through loans, purchases, payments, and other operations, and makes available materials and facilities required in the production and marketing of agricultural commodities,” according to a USDA description of some of the law’s capabilities.
The US farm support package prompted numerous questions from trading partners at meetings of the WTO’s regular committee on agriculture this week, having already led to some questions at last Friday’s negotiating session.
Australia, Canada, the EU, India, Japan, and New Zealand were among those asking for more details of the planned support package.
Trading partners asked how the US would ensure that the support provided would not distort markets; whether measures were in place to prevent support from exceeding limits that Washington has agreed at the WTO; how the payments would be made; and when details of the support would be formally notified to the global trade body.
At the meeting, Australia also asked how the US could prevent payments being made in excess of the value of the actual tariffs imposed, according to a copy of the questions submitted prior to the meeting and seen by Bridges.
New Zealand also said it was concerned that the new support “risks taking the United States close to its AMS limit of US$19.1 billion” – a reference to current WTO limits on the aggregate measure of support (AMS). These are dubbed “amber box” subsidies by negotiators, within the Agreement on Agriculture’s overall taxonomy for different farm support types. Amber box subsidies are considered highly trade-distorting under the organisation’s rules.
Aside from questioning the US over the planned aid package, countries also questioned India over its policies on sugar, pulses, and skimmed milk; Canada over its dairy and wine programmes; and Indonesia over its soybean and dairy policies. India also reiterated a question about how trade preferences for developing countries would be affected by the UK’s withdrawal from the European Union, which is due to take effect from the end of March next year.