Info Service on WTO and Trade Issues (Jul14/08)
US table proposals on food security
Geneva, 18 Jul (Kanaga Raja) - Both the United States and the G-33 group of developing countries at the World Trade Organisation (WTO) this week tabled separate proposals on the issue of public stockholding for food security purposes.
In the Bali Ministerial Decision of 7 December 2013, Members agreed to put in place an interim mechanism, and to negotiate on an agreement for a permanent solution, for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference.
According to the Decision, in the interim, until a permanent solution is found, and provided that the conditions set out are met, Members shall refrain from challenging through the WTO Dispute Settlement Mechanism, compliance of a developing Member with its obligations under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of this Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the AoA when the developing Member complies with the terms of this Decision.
The G-33's draft proposal, titled ‘Proposed Permanent Solution on Public Stockholding for Food Security Purposes', was issued on 15 July.
(A footnote to the proposal says that this is without prejudice to the position of Pakistan.)
In its proposal, the G-33 recalled the Bali Decision on public stockholding for food security purposes, and invited special attention to paragraphs 8-10 of that Decision.
Paragraphs 8-10 of the Decision are as follows:
"8. Members agree to establish a work programme to be undertaken in the Committee on Agriculture to pursue this issue with the aim of making recommendations for a permanent solution. This work programme shall take into account Members' existing and future submissions.
"9. In the context of the broader post-Bali agenda, Members commit to the work programme mentioned in the previous paragraph with the aim of concluding it no later than the 11th Ministerial Conference.
"10. The General Council shall report to the 10th Ministerial Conference for an evaluation of the operation of this Decision, particularly on the progress made on the work programme."
The G-33 also drew attention to the proposal (JOB/AG/22) that it had submitted in November 2012 to deal with some specific concerns on food security in developing countries.
The proposal involved amendments to Annex 2 of the Agreement on Agriculture on the basis of the following three elements:
i. To add new sub-paragraph (h) to the existing Paragraph 2 of Annex 2 of the Agreement on Agriculture with a view to include certain policies and services designed to promote rural development and poverty alleviation adopted in developing countries.
ii. To modify the existing footnote 5 of Annex 2 of the Agreement on Agriculture so as to provide that acquisition of stocks of foodstuffs by developing country Members with objective of supporting low-income or resource-poor producers shall not be required to be accounted for in the AMS.
iii. To modify the existing footnote 5 and 6 of Annex 2 of the Agreement on Agriculture with a view to reinforce and supplement the proposed modification to footnote 5 and also strengthen the existing footnote 5 and 6 further so as also to cover the programmes designed to lowering prices to more reasonable levels.
In its current document, the G-33 reiterates its proposal under items (ii) and (iii) above of JOB/AG/22 dated 30 November 2012, and requests other Members to make submissions, if they so desire, to facilitate discussions on these issues.
The Group also urged the Members to start early on the work programme with the aim of arriving at a ‘permanent solution' no later than the 11th WTO Ministerial Conference.
The US proposal (G/AG/W/134), issued on 14 July, elaborates on the elements for a work programme on food security, such as evaluation of the implementation of the Bali Decision, Members' experiences with food security, and food security policies, as well as the development of best practices and recommendations.
In its communication, the US said that it recognises that food security "is an enormously complex topic affected by a number of policies, including trade-distorting domestic support, export subsidies, export restrictions, and high tariffs. These policies can impede the food security of food insecure peoples throughout the world."
The United States said it also recognises the goal expressed in the Doha Ministerial Declaration to "maintain the process of reform and liberalization of trade policies" and the acknowledgement of the major role international trade can play "in the promotion of economic development and the alleviation of poverty."
The United States also recognises that food security policies are to be pursued consistent with, and will be supported by, "the long-term objective referred to in the Agreement [on Agriculture] to establish a fair and market-oriented trading system through a programme of fundamental reform."
The US maintained that public stockholding is only one tool used to address food security, and disciplines regarding its application are already addressed in the Agreement on Agriculture.
Moreover, it added, under the Bali Decision, Members commit to ensure that "programs do not distort trade or adversely affect the food security of other Members."
In this context, the United States proposed that Members agree to consider the following elements for a Work Program on food security, including the issue of public stockholding for food security, which will provide the Membership with a basis for recommending a permanent solution pursuant to the Bali Decision.
On the evaluation of the implementation of the Bali Decision, the US proposed that:
"a. The Secretariat should compile a report as soon as possible for Members to consider in the Committee on Agriculture regarding food security policies based on the list of information included in the Annex of the Bali Decision on Public Stockholding and current notification obligations; and
"b. Based on the report and information made available through notifications, Members should assess the context under which a permanent solution could be considered and recommended."
On evaluation of Members' experiences with food security, the US proposed the following:
"a. Members should make brief submissions to the Committee on Agriculture regarding their experiences with:
"i. achieving food security for their people, including existing or past challenges; and
"ii. public stockholding and other food security-related policies, including how specific programs are implemented (i.e., how the program operates, what are its objectives, and how each Member determines success in meeting the stated objective), and how programs are notified to the WTO.
"b. The Secretariat should compile a report, including information from past submissions, on the various categories of food security policies and programs that have been implemented by Members and factors that have affected Members' success in achieving food security."
On evaluation of food security policies, the US communication said:
"1.6. Members should review food security policies, across all three pillars, to determine their efficacy as food security tools and their effects on trade.
"a. The Secretariat should compile an economic literature review from established peer-reviewed journals and international governmental organizations on each category of food security policy and the resulting effects of each category on trading partners.
"b. In light of the Bali Decision, the literature review should take particular account of public stockholding for food security programs with a focus on measures within such programs that can be taken to minimize their potential to distort trade and to cause adverse effects on the food security of other Members, particularly LDCs.
"c. In light of the Bali Decision, Members should also review, taking into account relevant academic literature and country experiences, the potential for stockholding or other food security programs to provide support within the limits of the Total AMS or de minimis threshold while achieving food security goals."
The US proposal also referred to the development of best practices and recommendations, as follows:
"1.7. Taking into account the outcomes of the implementation and evaluation aspects of the work program proposed above, Members should work toward:
"a. developing a set of best practices for food security policies, including public stockholding policies, which will:
"i. identify policies that can address Members' food security objectives in an economical, targeted, and effective manner, taking into account the directive in the Bali Decision that programs shall not distort trade or adversely affect the food security of other Members;
"ii. identify policies that promote trade liberalization and food security as broadly as possible for all Members; and
"iii. establish an exhaustive list of notification and monitoring procedures;
"b. recommending a permanent solution pursuant to the Bali Decision."
Meanwhile, the Times of India (TOI) reported Thursday that India rejected the US proposal on food security and said the US sought to reopen the debate on food security and that India is willing to thwart attempts by developed countries to push through an agreement on trade facilitation by the end of the month, without addressing the concerns of the developing and least developed countries.
Senior commerce department officials told TOI that the US proposal was a delaying tactic. "We are yet to get the detailed document but they are going back to the pre-Bali days without addressing any of our concerns," a top-ranking officer said.
The strong resistance from India has now forced the WTO leadership to acknowledge its concerns on agriculture and convene a special meeting on 23 July. "We paid a price for our demand on food security by agreeing to trade facilitation but they want to have their way. We will be forced into paying more for it if developed countries don't meet our demands now," a top commerce department official told TOI.
"In Bali, we agreed in good faith that work will start but they have shown bad faith," said another commerce department official.
The sources added that a permanent solution needs to be found by 31 July, otherwise the WTO should defer the deadline for the trade facilitation protocol.
Sources in the Indian government also attacked WTO Director-General Roberto Azevedo for suggesting that India had agreed to an interim solution as a trade-off for the trade facilitation agreement. On 10 July, Indian ambassador Anjali Prasad met the WTO boss in Geneva and is learnt to have said that "India is unwilling to make any further payment for food security" and suggested that a decision be taken by the end of the month.
"It is not a very time-consuming exercise, you need to decide on the modalities such as the inflation and the implementation details. If they have the will we can clinch it by the month-end," the top-ranking Indian officer said.
Other Indian media reports, citing Ministry sources, said that the Commerce and Industry Minister Nirmala Sitharaman, who will be attending the G-20 Trade Ministers' meeting in Sydney on 19 July, would reiterate India's position with regard to implementation of the food security issues and other concerns of the developing nations in the meeting.