WTO Agriculture Talks Intensify as Buenos Aires Ministerial Approaches

23 November 2017

As trade talks in Geneva enter the final stretch, WTO negotiators have tabled new proposals on agriculture for the Buenos Aires ministerial that begins in just over two weeks. They have also put forward suggestions for a work programme to deal with unresolved topics after the conference takes place.

A new paper from Mexico has put forward proposals for a limit on trade-distorting farm support, while Norway and Singapore have tabled a draft ministerial decision on public stockholding for food security purposes. These two subject areas have dominated the WTO’s agricultural talks in recent years, including this one.

Two other proposals seek to spell out in more detail how WTO members would continue negotiations after Buenos Aires on topics that are not seen as top of the agenda for the ministerial.

While some negotiators told Bridges that they were not optimistic about the prospects for achieving an outcome on agricultural trade issues at the ministerial, others said they believed that progress was possible if ministers could reach agreement on a “package” of measures to adopt at the conference.

Mexico: cap trade-distorting support

The proposal from Mexico calls for a new ceiling on the overall amount of trade-distorting support which WTO members will be allowed to provide.

This would be composed of subsidies classified as highly trade-distorting “amber box” support, as well as “de minimis” payments, a WTO category of trade-distorting support that falls below a set share of the value of agricultural production.

The Mexican proposal comes after several other countries or groups have put forward their own submissions in recent months to establish a new limit on trade-distorting domestic support. (See Bridges Weekly, 9 November 2017, 19 October 2017, 20 July 2017, 2 February 2017)

However, the Mexican proposal argues in favour of special treatment for those developing countries that have committed not to exceed a ceiling on amber box payments at the global trade body. While most developing countries do not have entitlements to amber box support, Mexico is among over a dozen members that do, in a reflection of historical patterns of subsidy provision at the time the Uruguay Round of global trade talks was concluded over two decades ago.

Other developing countries with these entitlements include Brazil, Colombia, Costa Rica, Israel, Jordan, Morocco, Papua New Guinea, Saudi Arabia, South Africa, South Korea, Chinese Taipei, Tajikistan, Thailand, Venezuela, and Vietnam.

Three categories of countries

Mexico is proposing three categories of countries, each of which would take on different reduction commitments. One category would cover developed countries. Another would cover those developing countries that do not have amber box commitments, while a third would cover those that do have them.

In calculating their level of cuts, developed countries would first take twice their permitted “de minimis” support during a historical base period, which Mexico proposes should be 2011-15, and add this to their existing WTO commitment on amber box support. The resulting figure would be cut by a percentage, which members would need to negotiate.

Developing countries without amber box commitments would also take twice their “de minimis” support levels in the same base period, and subject this to a different percentage cut, which again would have to be negotiated.

Developing countries which do have amber box commitments would cut the sum of their amber box and “de minimis” support, by applying the same cut as other developing countries plus an “additional contribution” if their total amber box commitments exceed US$500 million, a figure which again would be negotiated by members.

Developed countries would have to implement the new limit as soon as WTO members adopt the relevant decision, while developing countries would have two extra years. Least developed countries would not be required to make any domestic support commitments.

Other unresolved domestic support topics would be addressed as part of a work programme for after the Buenos Aires conference, the proposal says.

Public stockholding

A new submission from Norway and Singapore sets out a draft ministerial decision on public stockholding for food security purposes, building on the structure of an agreement reached on this topic at the WTO’s Bali ministerial conference in 2013.

India, China, Indonesia, and other developing countries in the G-33 coalition have long argued in favour of greater flexibility for developing countries that buy food at minimum prices as part of their public food stockholding schemes. However, exporting countries have also expressed concern that exempting these purchases from WTO disciplines could distort trade and undermine food security elsewhere.

The proposal follows shortly after Paraguay and Russia tabled a separate submission on the same topic, which also seeks to build on the Bali deal. Under the latter, WTO members agreed not to challenge the legality of developing countries’ public food stockholding programmes, under certain conditions – such as more transparency about how the schemes function. (See Bridges Weekly, 9 November 2017)

A new footnote in the Norway-Singapore proposal would grant extra flexibility to new programmes, so long as these did not involve procuring more than 15 percent of the domestic crop in question. The Bali deal was limited to programmes that existed at the date it was adopted by WTO members.

Market access and export competition: revitalising talks

Argentina and four other agricultural exporting countries have tabled a draft decision which would commit ministers to reinvigorate talks on market access for farm goods. The decision specifies that talks would take place in dedicated sessions of the global trade body’s committee on agriculture, with a view to achieving tangible market access outcomes at the twelfth WTO ministerial, which is due to be held in 2019.

In addition to Argentina, the paper was co-sponsored by Brazil, Paraguay, Thailand, and Uruguay. All of those countries, except Peru, are part of the South American economic bloc Mercosur. In May, Paraguay and Peru had put forward a detailed proposal on agricultural market access, with a two-step process for simplifying and reducing trade barriers. (See Bridges Weekly, 8 June 2017)

While there has been little enthusiasm among most countries for addressing market access at the WTO ahead of the Buenos Aires conference, a number of agricultural exporting countries are eager to ensure the issue remains on the negotiating table after the ministerial.

A separate negotiating submission, backed by Canada, Chile, and Switzerland, would have trade ministers agree to continue talks on agricultural export competition, building on the decision on export subsidies and related areas that was agreed at the Nairobi ministerial conference two years ago. (See Bridges Daily Update, 19 December 2015)

Export prohibitions and restrictions

A revised proposal from Singapore seeks to improve transparency when WTO members impose temporary export prohibitions or restrictions. The paper reflects the results of consultations with other WTO members since an earlier version of the proposal was put forward in May. (See Bridges Weekly, 8 June 2017)

The decision would now also commit members to continuing talks on this area after the Buenos Aires ministerial. It also includes clauses requiring countries to provide more information to the WTO about measures they have introduced, and exempting humanitarian food aid purchased by the World Food Programme from constraints affecting exports.

Data released earlier this month by the UN Food and Agriculture Organization (FAO) shows that although food prices are now higher than in the last two years, they are still below the peaks they reached in 2008 and 2011. Export restrictions were among the measures that are believed to have exacerbated price spikes at that time, causing food import bills to rise sharply for net food-importing developing countries.

Final consultations in Geneva

Following small group meetings this week in Geneva, Kenyan Ambassador Stephen Karau, who chairs the WTO agriculture negotiations, is expected to convene an informal negotiating session on Monday to report back to the whole membership on the state of the talks.

The WTO’s top decision-making body outside of the ministerial conference, the General Council, is then due to meet from 30 November-1 December.

Trade officials who spoke to Bridges were divided over the prospects for progress on agriculture in Buenos Aires. Several delegates noted that the US in particular is sceptical about whether an outcome can be achieved, a sentiment which it has expressed in other WTO negotiating contexts, citing time constraints and the diverging views among members.

Other officials expressed cautious optimism, with some suggesting that the publishing of various proposals in recent weeks now meant that negotiators were able to discern approximate “landing zones” in some areas of the talks.

One source cautioned that political leaders could still spring surprises in Buenos Aires, even if the outline of a deal were to emerge from the Geneva process.

ICTSD reporting.

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