G33 insist on unambiguous outcomes at MC11 on food security

In the face of the push for investment facilitation and e-commerce talks, the G33 developing-country coalition are confronted with the uphill task of securing development-friendly reforms to agricultural trade at the coming WTO Ministerial Conference.

by D. Ravi Kanth

GENEVA: Developing countries with hundreds of millions of resource-poor and livelihood farmers face a do-or-die battle, ahead of the WTO’s eleventh Ministerial Conference (MC11) in Buenos Aires in December, to secure a permanent solution for public stockholding programmes for food security and a simple and effective special safeguard mechanism in agriculture trade, trade envoys told the South-North Development Monitor (SUNS).

Perhaps Buenos Aires is the only chance for the G33 group of developing and least-developed countries to secure unambiguous outcomes on the permanent solution for public stockholding programmes, the special safeguard mechanism and other developmental issues, said a trade envoy who asked not to be quoted.

This is more so, at a time “when the WTO Director-General Roberto Azevedo and a group of developing countries led by Brazil and Argentina are making a concerted effort to shift the focus of the eleventh ministerial meeting to e-commerce and investment facilitation among others, instead of securing the developmental outcomes as set out in the Doha Work Programme”, the envoy said.

“The Buenos Aires meeting is being prepared as a venue for launching the so-called 21st century issues, such as e-commerce and investment facilitation, by two countries – Brazil and Argentina – which had till now insisted that agriculture and other unresolved developmental issues of the global trading system of the 20th century must remain at the centre,” the envoy said.

The Director-General – who has been all over the place with Alibaba Group’s chairman Jack Ma extolling gains from e-commerce – is queering the pitch for both e-commerce and investment facilitation as though it is a WTO secretariat-driven process, the envoy suggested.

In the face of such an unprecedented effort by the WTO secretariat under the leadership of Azevedo and by neoliberal governments in Brazil and Argentina, the G33 not only faces an uphill battle but, in all probability, could well be asked to make a heavy payment even for securing less-than-credible outcomes on the permanent solution for public stockholding programmes for food security and the special safeguard mechanism, the envoy maintained.

G33 submission

Against this backdrop, the G33’s submission “Reaffirming Development – MC 11” circulated on 25 April assumes importance.

The group renewed the “longstanding calls for global trade reforms that address inequities and imbalances in the Uruguay Round Agreement on Agriculture (AoA) so that all WTO Members would be governed by a multilateral trading system (MTS) under the WTO which is not only open, transparent, and market-oriented but also, more importantly, development-oriented, fair and provides a level playing field.”

It is well established by several studies that the Uruguay Round was a sweetheart deal between the then two major agriculture subsidizers – the United States and the European Union – which was poetically concluded at Blair House in Washington in 1990.

Attempts to address the inequities arising from the Uruguay Round were started by Brazil, which created the G20 group of developing countries in 2003. On the eve of the WTO’s fifth Ministerial Conference in Cancun in 2003, the US had reversed course from its longstanding focus against EU agricultural policies and joined hands with the EU to accommodate each other’s policies and mount a joint assault on the agricultural markets of developing countries. In response to this, Brazil had then reached out to India and China to form the G20, much to the chagrin of the EU which denounced the move at the WTO.

But the G20 is now dead for all practical purposes and is hardly interested in addressing the inequities at this juncture, in the face of opposition from the US and the EU.

The G33 pointed out in its submission that “developed Members have expansive flexibilities in the AoA, which make their farmers and exporters artificially competitive. These flexibilities include, amongst others, high AMS [Aggregate Measurement of Support] entitlements with no product specific caps on AMS; very high levels of total per capita domestic support; non-transparent and complex tariff-rate quota (TRQ) and non-ad valorem tariff systems including tariff peaks and escalation; and highest entitlements to the special safeguard provisions (SSG), among others.”

Agricultural tariffs in the developing countries, the G33 argued, “have not been able to match these wide-ranging flexibilities causing periodic import surges and almost permanent market distortions in agriculture trade to the disadvantage of developing Members where agriculture is characterized by small subsistence farming and market failure”.

Despite the WTO Agreement’s built-in agenda of continuing the reform process in agriculture trade, which was exhaustively negotiated and clarified in the 2001 Doha Work Programme as well as the revised draft agriculture negotiating modalities of December 2008, attempts are now being made to kill those developmental commitments once and for all.

In the face of these developments, the developing countries can achieve a development-oriented outcome only if they remain solidly united to ensure that “the negotiations must continue towards and after the 11th Ministerial Conference (MC11) at Buenos Aires, building on the various Ministerial decisions/declarations and the development framework we have agreed to date since 2001.”

A credible and balanced outcome

The G33 maintained that it is ready to “engage constructively and contribute to a credible and balanced outcome, which withstands the test of development at MC11 at Buenos Aires and beyond”.

It maintained that “as part of the balancing and S&DT [special and differential treatment] instruments, the G33 has long been calling for meaningful Special Products (SP), an accessible and effective Special Safeguard Mechanism (SSM) and a permanent solution on Public Stock Holding (PSH) for food security purposes.”

Further, “these tools,” the G33 argued forcefully, “are needed for sustaining investments in agriculture for food security, livelihood security and rural development, as well as addressing the destabilizing and crippling effects of import surges and downward price swings in the increasingly volatile global agricultural markets largely due to huge subsidies in productions and exports by the developed Members.”

It said “there should be a permanent solution on public stockholding for food security purposes and a Special Safeguard Mechanism for developing Members as mandated. There is a clear mandate to arrive and adopt a permanent solution on Public Stock Holding (PSH) for food security purposes by 2017.”

“The Nairobi Ministerial Decision on SSM for developing Members has reinforced and strengthened the mandate in the Hong Kong Ministerial Declaration to establish both price and volume-based SSM,” the G33 maintained.

The G33 urged WTO members to “constructively and meaningfully engage on the two most important issues of SSM and PSH with a view to deliver them in MC11 so that developing Members are equipped with these tools to counterbalance some of the inequities built into the WTO rules in favour of the developed Members.”

This can happen only if the developing countries remain united in thwarting the “stonewalling” and “diversionary” tactics adopted by the US and the EU, aided by the WTO Director-General and Brazil, said several envoys who had participated in the Nairobi Ministerial Conference in 2015.

The recent appointment of a new WTO agriculture negotiating chairperson, in which the Director-General played a major role, has only revived memories of the manner in which the Nairobi outcomes were finalized, said several African and Asian envoys who asked not to be quoted.

The new chair, Ambassador Stephen Karau from Kenya, said on 26 April that he is capable of overseeing the negotiations given his role in overseeing the discussions on finalizing the Nairobi Ministerial Declaration in 2015.

Unless the G33 wages a do-or-die battle to secure its two goals at Buenos Aires, however, the writing on the wall is anything but encouraging, several trade envoys said. (SUNS8452)              

Third World Economics, Issue No. 638, 1-15 April 2017, pp6-7