Info Service on WTO and Trade Issues (Jul13/08)
29 July 2013
Third World Network
Agriculture: Chair reports on consultations on G-33, G-20 proposals
Published in SUNS #7631 dated 22 July 2013
Geneva, 19 Jul (Kanaga Raja) -- The chair of the agriculture negotiations
at the World Trade Organisation (WTO) on Thursday reported to the
full membership on his consultations since May on the G-33 proposal
on public stockholding for food security, and the G-20 proposal on
In a statement at an informal open-ended meeting of the Special Session
of the Committee on Agriculture, the Chair, Ambassador John Adank
of New Zealand, reminded members of the time that is remaining in
the lead up to the Bali Ministerial Conference (to take place in early
"As members will be aware, the end of next week marks the beginning
of the summer break, with many WTO delegates taking leave during August
and no expectation of a real resumption of WTO work until September.
That, of course, is the case each year but this year is different
as when delegations return in September we can expect our work to
intensify significantly if we are to prepare effectively for the Bali
Ministerial in early December," he said.
He added that it's important that all members recognise that they
will have at the very most around two months - perhaps only 6 to 8
weeks - when they return after the summer break to prepare the ground
for the Ministerial.
"As I'm not in a position to announce today that we have consensus
in any area of our work in relation to Bali, this means that the period
after the summer break will necessarily need to be extremely focussed
and intensive if we are in fact to deliver on the expectation that
has been set now for several months that ‘elements of agriculture'
will form part of a suite of Bali decisions," the Chair said.
"So, delegations need to adjust their mind-set to take into account
this timeframe. I would encourage you before you depart for the summer
break to register where things are with your capital, and ensure that
both you and they are focussed on the challenge that will need to
be met if we are to arrive at convergence on agricultural elements
for the Bali Ministerial," he stressed.
On the G-33 proposal on public stockholding for food security, the
Chair said that since members last met in May, he had continued to
hold consultations on this proposal, based on the four questions that
he had initially outlined at a senior officials' meeting on 30 April.
Question I states: "Are members willing to consider that the
Bali Declaration/ decisions include recognition that, subject to the
fundamental requirement of the Green Box relating to no or minimal
trade or production distortion, the Green Box needs to be flexible
enough to encompass a wide range of general services policies in developing
countries along the lines indicated in the proposed paragraph (h)
(which the G-33 proposal suggests be added to the Illustrative List
of Green Box measures)?"
On this question, the Chair reported that further progress has been
made in clarifying views of members on a number of issues that they
have had regarding the "general services" elements outlined
in proposed paragraph (h) referred to in the G-33 proposal.
Following some initial discussion which highlighted potential overlap
between some elements in the proposed paragraph (h) and existing elements
of the Green Box lists contained in Annex 2 of the Agreement on Agriculture,
it was suggested by Indonesia, on behalf of the G-33, to delete "provision
of infrastructure services" and "nutritional food security"
from the list of general service programmes, given that both of these
aspects are addressed in other parts of Annex 2.
According to the Chair, the suggestion was positively received by
Overall, there seemed to be some convergence emerging around declaration/communique
language for Bali that would recognise in general terms that the policies
and programmes mentioned in the first part of the G-33 proposal -
with the suggested modifications - could be considered to fall within
the scope of "General Services" of Paragraph 2 of Annex
2 to the AoA (Agreement on Agriculture), provided that the declaration
makes clear that the chapeau contained in Paragraph 1 of Annex 2 would
fully apply to such policies and programmes.
Ambassador Adank viewed this as positive news.
Question 2 states: "Taking into account what the Ministerial
Conference has said in the past (including in the Implementation Decision
of 2001), can we use Bali to send a convergent political message that
recognises the role played by public stockholding and similar policies
in some developing countries?"
According to the Chair, the response to Question 2 has also been positive
at a general level.
However, divisions remain between: those who have expressed their
readiness to start working without delay on text for a possible Bali
Communique or Declaration and those who consider that the debate on
Question 2 should take place once the "contours" of the
possible outcome on the other elements of the G-33 proposal (notably,
replies to Questions 3 and 4) are clearer.
"So, currently while no consensus has been reached about any
specifics of the potential elements to be included in the Bali outcome
text, I remain hopeful that, as members reflect further, a broader
convergence should be possible on this political messaging issue."
Question 3 states: "Are members prepared in the lead up to Bali
to agree on any amendment or interpretation of existing WTO AoA disciplines
that might provide greater flexibility in this area of public stockholding
than is currently the case? If so, what is this amendment or interpretation?
If not, are members prepared to consider further work on these issues
in the post-Bali period, and how would this work be framed?"
On this, Ambassador Adank said that the situation has not changed.
Members' opinions are still divided between those favouring a general
systemic solution to the issue for Bali (through an amendment or interpretation
of the existing rules); and those questioning whether such amendment
or interpretation is either possible or desirable by Bali.
Members were also asked to comment specifically on the various ideas
raised by the G-33 for amending or interpreting the rules relating
to: (i) de minimis criteria; (ii) the external reference price; (iii)
the "eligible production"; and (iv) the administered price.
The Chair reported that many felt that modifying any of the four sub-items
would have implications that go far above the public stockholding
and therefore too-big an issue for Bali.
About the further work on these issues in the post-Bali period, while
some members have suggested focussing now on what a post-Bali work
programme might look like, others have suggested that the focus must
necessarily remain on what is doable for Bali and only after this
is clear should the focus revert to the post-Bali issue.
Question 4 states: "Are members willing to consider a mechanism
or process whereby any member with specific concerns that their public
stockholding policies aimed at addressing food security objectives
were at risk of breaching their WTO commitments could bring those
concerns to the attention of members and seek additional flexibility
on an interim basis, pending any broader agreement to modify the disciplines
According to the Chair, this question about a possible interim mechanism
has made probably the most progress since members last met in May.
Different positions on the threshold conditions and the main characteristics
of a potential mechanism have been expressed more clearly and some
elements of convergence have been starting to emerge.
For example, it has been generally agreed that the mechanism could
cover public stockholding programmes of developing countries related
to food security, and be applicable to staple crops, given the food
In addition, that its use could be subject to an on-going provision
of information that would allow members to monitor the situation;
that members could look at safeguards or guarantees aimed at avoiding
potential spill-over effect on markets; and that the Committee on
Agriculture would be the appropriate home for the mechanism in terms
of notification and monitoring discussions.
There is also a general sense that any flexibility delivered under
a mechanism should be time-limited and the mechanism itself should
be an interim one.
Among the threshold conditions to access the mechanism, it has been
also generally suggested that the member must find itself in a situation
of near-breach of its commitments, said the Chair.
Other conditions that might justify recourse to such a mechanism have
been noted as possibly including: (i) extraordinary and sudden increases
in food prices; (ii) the presence of market failure; (iii) respect
of the existing notification requirements; and (iv) the importance
of ensuring that recourse to the mechanism does not displace a general
policy orientation towards economic reforms.
Despite this progress, some crucial questions remain, said the Chair,
adding that these include notably, the question whether the flexibility
delivered under such a mechanism should be: (i) automatic; (ii) non-automatic;
or (iii) a hybrid arrangement that would involve some degree of automaticity
as well as case-by-case elements.
He stressed that members have yet to determine which of these three
general directions they prefer to pursue.
He further said that some members have also highlighted the need to
ensure that any flexibility delivered under any such mechanism would
need to be legally robust to ensure that members were not challenged
under the Dispute Settlement mechanism. How would the mechanism be
packaged to provide appropriate legal flexibility? Would it be like
a WTO waiver, or something else?
"So, to sum up, the consultations have moved into serious consideration
of the parameters of possible solutions. Members have a considerable
number of elements to consider, and I have been careful to allow them
the space to do so."
The Chair added: "Time is however now pressing and I think it's
important that members start to deepen the discussion of the most
appropriate models for delivering flexibility under an interim mechanism,
assuming that this is what members are prepared to envisage as an
outcome for the Bali meeting."
According to trade officials, members of the G-33, at the informal
meeting Thursday, said that they would need some "legal certainty"
that their use of the mechanism would not be subject to legal challenge.
Other members said that they sought a mechanism with time limits,
transparency and a means of preventing a "spill-over" that
would distort markets.
Trade officials said that at the informal meeting, Norway proposed
an idea on how to allow developing countries to purchase and stock
produce for food security without breaching their committed limits
on domestic support.
One of the problems raised by the G-33 is the possibility that when
a government purchases at a "reference price" instead of
the market price, it risks exceeding the country's limit on domestic
support, particularly when prices are high, on account of the size
of the support calculated, using the difference between reference
prices and those of the 1986-88 base period when prices were considerably
lower than they are now.
According to trade officials, Norway's proposal envisages a downward
adjustment in the reference price when markets can be shown not to
function properly, although Norway said how the adjustment would be
determined still needs to be discussed.
According to trade officials, on the G-20 proposal on export competition,
Ambassador Adank said that the debate on the proposal is clearly still
at an early stage and that members need to discuss it seriously further
in order to get a better idea of what could be possible in Bali.
"I think it is probably fair to say that the overall political
acceptability of recourse to export subsidies has diminished significantly
as these unilateral reforms, undertaken in preparation for the day
when export subsidies would need to be eliminated entirely, have been
implemented," he said.
"This trend for reform has positively contributed to the environment
for broader reform in agriculture and the WTO more broadly and members
may want to think about the importance of encouraging further efforts
in this area."
The Chair went on to report that on the one hand, the G-20 and a group
of other members, including some who may still have questions related
to the G-20 proposal including the references to Article 9.4 of the
AoA, clearly want a step forward in Bali on export competition, including
in terms of legal commitments. This position is presented as in keeping
with the 2013 deadline agreed in Hong Kong in 2005 for the elimination
of all forms of export subsidies, which was of course also incorporated
in the Rev. 4 draft modalities text.
On the other hand, some of the members with the largest export subsidy
commitments, have underlined that while they remain committed to the
elimination of export subsidies, the conditions under which they could
modify the legal commitments in the field of export competition are
in their view not met. And this is notwithstanding that their actual
use of export subsidies has significantly decreased in recent years.
For them, the text agreed at Hong Kong in 2005 and the Rev. 4 text
on export competition that followed on from this was conditional upon
the overall conclusion of the Doha Development Agenda, as was the
implementation of the Rev. 4 text overall. A partial implementation
of the export competition pillar - or even the full implementation
of the export competition pillar without accompanying delivery of
other key elements of the Doha package - is therefore not seen as
a viable option for the Bali meeting.
According to the Chair, there is also another group of members with
export subsidy commitments who point out that the G-20 proposal would
have real practical impacts for their use of export subsidies rather
than just "cut water" out of their scheduled commitments.
While not ruling out a discussion, these members have pointed to the
additional difficulty this would cause and highlighted, along similar
lines to the previous group of members, that any move in the direction
of the G-20 proposal would only be possible in the context of a wider
package of reform both across and beyond the agriculture pillar of
Summing up, the Chair said that there is some way to go in this area
to locate any convergence, which in his view remains a further task
members will need to pursue in the weeks ahead.
A number of members spoke during the discussion of the G-20 proposal
on export competition.
According to trade officials, the US and the EU voiced strong objections
to a decision in Bali on eliminating or reducing export subsidies,
as well as dealing with other export competition issues. In their
view, this is not well calibrated for a deal in Bali.
Trade officials pointed out that the US' and EU's concerns are that
the original agreement (which came out of the Hong Kong Ministerial
Conference in 2005) to eliminate export subsidies by 2013 was based
on agreement on the whole agriculture package, and not on an isolated
commitment on export subsidies.
The EU said this is not doable before the Bali Ministerial, and puts
at risk a successful outcome at that meeting.
According to trade officials, the US said that it was joining the
EU as the "skunk of the picnic", noting that people are
disappointed that we are not addressing export competition.
The US also has its disappointments about other issues such as non-agricultural
market access (NAMA), services, fisheries subsidies, and agricultural
Japan said that countries should think about things that could be
agreed. "Members should seek realistic solutions that are acceptable
to all," it said.
Others broadly said that this is an important issue and should be
dealt with, adding that export subsidies have long been a part of
agricultural trade policy that is most damaging.
For example, Mexico, supported by Uruguay, called it an outdated policy
because in other areas in the WTO, export subsidies are illegal, but
they are still allowed in agriculture.
Brazil (for the G-20) said that it was very disappointed with the
lack of progress in the discussions on export competition, adding
that it had already recognised that the G-20 is not going for full
elimination of export subsidies in Bali.
Export subsidies are an unfair practice prohibited in other goods,
and that it's one of the most serious imbalances in WTO rules, it
said, adding that members must not allow reforms that have already
been made to be rolled back.
According to trade officials, Argentina, New Zealand, Thailand, Costa
Rica, Chile, Mexico, Paraguay, Uruguay, the Philippines, Pakistan,
Bolivia, China, and Cuba supported the G-20 and the Cairns Group (represented
On the G-20 proposal on Tariff Rate Quota (TRQ) administration, the
Chair reported that there have been no further consultations specifically
on this proposal, although he has continued to meet with delegations
to hear their views on this issue.
Since the last meeting in May, members continue to see this as a useful
one to explore for possible decision in Bali, even though there are
some sensitivities about aspects of the proposal that members have
reflected to the Chair in various consultations.
In his statement, the Chair said that these concerns can be divided
into two different areas: first, some concerns about the actual text
and specifically the special and differential treatment elements of
it; and more general questions that some members have raised about
how the mechanism would operate in practice and the need to ensure
that it does not end up targeting a situation where the under-fill
was due to market conditions unrelated to quota administration conditions.
According to trade officials, most members that spoke on this issue
said they considered it to be a candidate for agreement in Bali, describing
the proposal as less complicated, technically. Some others said that
it was simply implementation of the present Agreement on Agriculture.
On the other hand, several others voiced concerns over the special
and differential treatment (S&D) provisions.
According to trade officials, some (the US and EU) said that it would
allow developing countries to have persistently under-filled quotas
without having to act on the administration method.
Several developing countries including Chinese Taipei, Republic of
Korea, the Dominican Republic, El Salvador, China, Venezuela, Barbados
and the Philippines stressed the importance of S&D.