Prospects for credible outcomes at Buenos Aires bleak

Differences and manoeuvrings among countries in the WTO agriculture negotiations leading up to the yearend Buenos Aires Ministerial Conference have extended to the selection of a chair for the talks.

by D. Ravi Kanth

GENEVA: Efforts are currently underway to nominate Kenya’s trade envoy Ambassador Stephen Ndung’u Karau as the chair of the Doha agriculture negotiating body in the WTO, with the African Group, at the behest of some powerful developed and South American countries, apparently asking Karau to assume the post to break the current impasse.

That impasse arose after major industrialized countries – the European Union and Canada with their allies – blocked the nomination of Irene B.K. Young of Hong Kong (China) on grounds of affiliation to China.

The Asian Group’s nomination of Young was blocked following sustained attempts by major developed and some developing countries to deny a credible permanent solution for public stockholding programmes for food security at the WTO’s eleventh Ministerial Conference, to be held in Buenos Aires in December, trade envoys told the South-North Development Monitor (SUNS).

Young, who is currently the chair of the WTO Trade Policy Review Body, was nominated by the Asian Group of developing countries on grounds that the chair for the Doha negotiating body on agriculture ought to be from a developing country.

In a bid to stall Young’s appointment, the developed and a few developing countries in South America first proposed Uruguay’s Ambassador Gustavo Miguel Vanerio Balbela. Despite Uruguay being a strong member of the Cairns Group of farm exporting countries, the industrialized countries insisted that the Uruguayan ambassador would be a good choice instead of the Asian Group’s nominee. But, for some inexplicable reason, Balbela withdrew from the race.

Subsequently, Balbela’s sponsors opted for Mexico’s new trade envoy Ambassador Roberto Zapata Barradas. They argued that Barradas is not affiliated to any coalition or country despite Mexico’s close proximity to major industrialized countries.

When the Asian Group remained firm on its choice, some powerful developed and a few South American countries approached Morocco to nominate an African candidate to chair the Doha agriculture negotiating body, according to trade envoys familiar with the development.

Morocco, which is the coordinator of the African Group, asked Karau of Kenya whether he would be willing to chair the Doha agriculture Special Session knowing full well that he is currently chairing the negotiating body for improving various provisions in the WTO Dispute Settlement Understanding.

At a time when the Doha agriculture negotiating body is tasked with delivering the permanent solution for public stockholding programmes and the special safeguard mechanism (SSM) at the Buenos Aires Ministerial Conference, the African choice of Karau has come as a surprise, said several trade envoys familiar with the development.

“Unfortunately, Ambassador Karau’s nomination has revived the ugly memories of the WTO’s tenth Ministerial Conference in Nairobi, Kenya, in December 2015, when the chair of the conference [Kenyan Foreign Affairs Cabinet Secretary] Amina Mohamed along with the WTO Director-General Roberto Azevedo navigated five major countries – the United States, the European Union, China, India, Brazil – to produce a dubious outcome,” according to participants who took part in the Nairobi meeting.

“Our ministers were relegated to coffee cup bearers instead of negotiating their trading rights,” Uganda complained after the ministerial meeting. “We were never consulted,” Uganda said, commenting on the questionable Nairobi Ministerial Declaration.

As fallout from the Nairobi meeting, Kenya  suffered  a setback  when its  candidate Amina Mohamed was not elected for the top executive job in the African Union last year, said an African trade envoy familiar with the development.

Kenya, which is a major user of public stockholding programmes for food security, had campaigned hard for a credible and strong permanent solution for public stockholding programmes at the WTO’s ninth Ministerial Conference in Bali in 2013. At present, Kenya, which is suffering a major drought, has crossed the limits for de minimis support for maize. Kenya is also a key member of the G33 farm coalition of developing countries led by Indonesia.

Against this backdrop, serious doubts are being expressed as to whether Karau will be allowed space by major industrialized and powerful agricultural exporting countries to arrive at a credible permanent solution for public stockholding programmes for food security and an outcome on the much-hurdled SSM for developing countries, according to trade envoys familiar with the agriculture negotiations.

Major industrialized countries along with their allies such as Pakistan and Paraguay have already made it known in unmistakable terms that the permanent solution for public stockholding programmes for food security should include numerous conditionalities that would make it nearly infructuous, according to trade envoys who attended a Green Room meeting convened by WTO Director-General Azevedo on 17 March with 27 countries.

But Indonesia, which is the coordinator of the G33, made it clear at the Green Room meeting that the G33 members want a credible and legally sound agreement for the permanent solution (see following article).

It remains to be seen whether Karau will go ahead with the proposal of the African Group to chair the Doha agriculture negotiating body or politely refuse the offer on the grounds that Kenya is an active demandeur of a strong covered agreement for the permanent solution for public stockholding programmes for food security at Buenos Aires, trade envoys said.

Agriculture deliverables

In a development related to the Buenos Aires meeting, eight South American countries – Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, Peru and Uruguay – circulated a decision reached by their foreign ministers on the deliverables they will seek at the meeting, including the permanent solution for food security.

In a restricted document issued on 10 March, the eight countries said that the Buenos Aires meeting “provides a valuable opportunity to continue taking significant steps in the process of reforming the multilateral system for trade in agricultural products and food, eliminating the currently severe distortions that prevent agro-exporting developing countries from achieving their production potential and fully contributing to global food security.”

The eight countries underscored the need to find “a permanent solution to the issue of public stockholding for food security purposes, ensuring that it does not distort international trade or production.”

They argued that “protectionist measures include tariff peaks, tariff escalation, small tariff quotas and distorting production subsidies, resulting in situations which in many cases are compounded by the proliferation of non-tariff import restrictions in the form of sanitary, phytosanitary and technical measures applied in an unjustified and arbitrary manner.”

Therefore, “fairer and more transparent and open international trade is an invaluable tool for sustainably increasing food production” and is essential at this juncture, they maintained.

WTO members must focus on their discussions “primarily on trade- and production-distorting domestic support and on securing improvements in current market access conditions,” the eight countries argued.

Significantly, the eight countries failed to mention the need for an SSM for developing countries. Barring Bolivia and Peru, the remaining six countries had opposed the SSM until now.

At a time when the United States under President Trump’s administration wants to pursue bilateral agreements instead of multilateral outcomes on trade, the prospects for any credible outcomes at the Buenos Aires meeting seem bleak, according to trade envoys who asked not to be quoted. (SUNS8434)                     

Third World Economics, Issue No. 635, 16-28 February 2017, pp2-3