WTO Members Sign off on Food Stocks, Trade Facilitation Decisions

27 November 2014

WTO members signed off on Thursday on a set of decisions that together resolve a months-long impasse over the implementation of the “Bali Package,” which was agreed last December.

The news, officials say, could also help re-energise talks at the global trade club, which have languished in the wake of the deadlock.

Negotiators have clarified that a deal not to challenge developing country food stockholding schemes under farm subsidy rules will not expire in 2017, while they work under an accelerated timetable to find a “permanent solution” to problems these countries face.

A separate decision also integrates the Trade Facilitation Agreement (TFA) into the WTO’s legal framework – which supporters say could help lower customs barriers and ease red tape at borders.

Thirdly, a new July 2015 deadline was also set for completing a work programme on the remaining Doha Round issues, as officials acknowledged that the previous target of December this year was no longer realistic.

“Work shall resume immediately and all members shall engage constructively on the implementation of all the Bali Ministerial Decisions,” the new agreement says.

Flurry of consultations

Over the last few days, WTO Director-General Roberto Azevêdo has organised a series of consultations with negotiators to test whether other WTO members would be willing to accept the conditions of an agreement made between the US and India in talks earlier this month (See Bridges Weekly, 13 November 2014).

This included an informal meeting at the level of Heads of Delegation on Monday, where the WTO chief circulated draft decisions on the TFA protocol and public food stockholding, as well as a draft statement from the General Council chair.

The TFA and public food stockholding decisions floated on Monday were then approved, without changes, at Thursday’s special meeting of the General Council – the WTO’s highest decision-making body outside of the ministerial conference – drawing applause from the room. After the decisions were gavelled, sources say at least 30 members took the floor to make a series of statements.

While the meeting had originally been slated for Wednesday this week, it was pushed back until today to ensure that all countries’ capitals would have time to review a revised version of the texts, namely the addition of a third draft decision on the subject of post-Bali work and some changes to the draft chair’s statement.

Trade sources told Bridges that Argentina and some developing countries had raised concerns about the extent to which the original proposed language managed to reflect an appropriate balance between the relative significance of the public stockholding issue and the broader trade policy agenda.

“Maybe it’s a question of ‘optics’ – but optics are also important,” one source observed.

TFA opens for ratification

The Protocol of Amendment adopted on Thursday integrates the new TFA into the overall WTO Agreement, now allowing governments to begin the ratification process domestically. Ratification by two-thirds of the membership is required for the deal to enter into force for those members.

The TFA was the pinnacle of the Bali deal, and is the first global trade agreement that has been reached since the WTO opened its doors in the mid-1990s.

Notably, the trade facilitation accord includes language saying that developing countries will not be required to implement the commitments they take unless they receive the technical assistance to do so.

The deal therefore allows developing countries and LDCs to categorise their commitments in one of three ways: Category A commitments, which take immediate effect once TFA enters into force; Category B commitments, which require a transition period; and Category C commitments, requiring both a transition period and technical assistance.

The General Council has now annexed to the agreement the Category A notifications received so far, which numbered 49 as Bridges went to press.

The Protocol itself also does not make any mention of paragraph 47 of the Doha Declaration, which at one point had been requested by the African Group – and later dropped – earlier this year. The associated General Council decision does “recall” it, however.

This Doha Declaration paragraph refers to the concept of the “single undertaking” - in other words, that the negotiations be concluded as a whole, with the possibility of reaching agreements at an earlier stage that “may be implemented on a provisional or definitive basis,” to later be reviewed for balance with the other Doha agreements once these are completed.

Accelerated food stockholding timetable

The new decision on developing countries’ public food stockholding schemes effectively ensures the “peace clause” agreed in Bali will not expire in 2017. Under this, members agreed to refrain from challenging these programmes under WTO farm subsidy rules, while a “permanent solution” is negotiated.

A number of developing countries had complained that their freedom to buy food at government-set prices under these schemes has been gradually reduced by price inflation over the two decades since the Agreement on Agriculture was originally agreed.

Other countries have called for more information on how these stockholding programmes operate, so as to ensure that producers in other countries should not be harmed by any revisions to the trade body’s rules in this area.

As part of the G-33 coalition of developing countries, India has spearheaded the move to expand flexibility on these schemes, not least due to plans to increase the volume of subsidised food available to poor citizens as part of the country’s new Food Security Act.

Meanwhile, Thursday’s decision now commits WTO members to reaching agreement on this permanent solution by 31 December 2015, essentially bringing forward the previous target date.

Commitment for action

A previous deadline set by trade ministers last year had committed negotiators to doing so by the body’s eleventh ministerial conference – which under normal circumstances would be held in 2017.

“This is a political commitment to deal with this expeditiously,” one source told Bridges, referring to the combination of a modified timetable for the food stockholding discussions and the clarification on the peace clause’s duration.

Related talks on subsidy and market access reforms under an eventual Doha Round accord will continue under a parallel but separate negotiating track, trade sources told Bridges.

Other aspects of the Bali accord remain unchanged, trade sources said. The extended peace clause deal still only applies to “traditional staple food crops,” and relates only to programmes “existing as of the date of the Bali decision.”

It would also still require countries to respect a number of other clauses under the original Bali deal.

These require countries to provide other WTO members with detailed information about their farm subsidy programmes, including their food stockholding schemes; to respect certain anti-circumvention and safeguard clauses, such as those ensuring that food purchases do not “distort trade or adversely affect the food security of other members”; and to hold consultations with other countries on their programmes.

Big decisions still remain

Trade officials this week expressed cautious optimism about the breakthrough, noting that it could provide a significant boost to the upcoming resumption of talks on the work programme.

Another meeting of the General Council is slated for 10-11 December, with the goal of restarting the post-Bali discussions quickly, especially given the limited time between now and the new July 2015 deadline for the work programme.

“People are talking about completing the Doha Development Agenda at the next ministerial conference,” one negotiator told Bridges, adding that it will depend on how much progress can be achieved during the first half of next year.

Others have also noted that trust lost from the past few months of discord could be hard to restore quickly, even given this extended deadline.

Another questioned whether the new July deadline would be manageable if delegates were hoping by then to develop a clear draft text with agreed formulas and exceptions for tariff and subsidy cuts.

“There are some quite big decisions to be made,” the source warned.

Talks earlier this year on a potential work programme had largely agreed that any scheme would need to revolve around agriculture, non-agricultural market access (NAMA), and services – the most contentious areas of the Doha Round.

Sources have acknowledged, however, that these preliminary discussions had not been very far along when the July impasse on TFA implementation and food stockholding occurred.

ICTSD reporting.

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