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TWN Info Service on WTO and Trade Issues (Nov14/13)
26 November 2014
Third World Network
 

CSOs voice concerns over the TFA/food security issue
Published in SUNS #7924 dated 26 November 2014
 
Geneva, 25 Nov (Kanaga Raja) -- Some 116 civil society organisations (CSOs) across the globe have voiced their deep concern over the process and content of what is currently being negotiated at the World Trade Organisation (WTO) on the ‘peace clause' with respect to food security and the Trade Facilitation Agreement (TFA) as part of the Bali package.
 
These concerns have been voiced in a letter dated 24 November to the WTO Members. The letter appears to have been released just before the draft decisions on the Protocol of Amendment for the Trade Facilitation Agreement and on public stockholding for food security purposes were handed out to the Members on the same day.
 
In a separate letter sent to Indian Commerce and Industry Minister Ms Nirmala Sitharaman on 25 November, Indian farmers' organisations as well as other civil society groups in the country raised serious concerns over the India-US agreement on the TFA/food security issue (see below).
 
Both the draft decisions on the TFA and food security have been accompanied by a statement by the Chair of the General Council, to be delivered at a special meeting of the Council on 26 November. That meeting is to be preceded by a meeting of the WTO Preparatory Committee on Trade Facilitation (PrepCom) earlier in the morning on the same day.
 
These developments have come following an official announcement by the United States and India on 13 November that both governments had reached an agreement aimed at breaking the current deadlock on the TFA/food security issue. Unlike at Bali, the two governments had negotiated directly, bypassing the WTO Director-General.
 
The draft decision on public stockholding for food security purposes, amongst others, states that until a permanent solution is agreed and adopted, and provided that the conditions set out are met, Members shall not challenge 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.
 
According to the draft decision, Members are to engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes by 31 December 2015.
 
It also says that if a permanent solution for the issue of public stockholding for food security purposes is not agreed and adopted by the 11th Ministerial Conference (to be held in 2017), the mechanism (referred to in paragraph 1 of the Bali Decision, and as set out in paragraph 1 of this Decision) shall continue to be in place until a permanent solution is agreed and adopted.
 
The accompanying statement by the Chair of the General Council proposes that in adopting the two decisions, the General Council also agrees to complete the Work Program on the remaining Doha Development Agenda (DDA) issues by July 2015. (See SUNS #7923 dated 25 November 2014.)
 
In their letter to the WTO Members, the CSOs underlined that the Bali package was a highly unfair and unbalanced agreement in the first place. It included a permanent Trade Facilitation Agreement that was extracted by the developed countries while including only best endeavour clauses on the development package for least- developed countries (LDCs).
 
In addition, said the letter, the Bali package included only a "temporary" peace clause on the G-33 proposal on food security, which was further weighed down by stringent conditionalities.
 
"The G-33 proposal was a genuine demand by a number of developing countries, led by India, to change the WTO rules to allow domestic subsidies to producers in developing countries and LDCs for public food stockholding programs, to be given without limit."
 
Among the international and regional organisations signing onto the letter are LDC Watch; the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF); South Asia Alliance for Poverty Eradication (SAAPE); the Pacific Network on Globalisation (PANG); Third World Network (TWN); Third World Network-Africa; and the ACP Civil Society Forum.
 
The letter was also signed by a host of national organisations encompassing consumer groups, environmental groups, trade unions, farmers' groups, and women's organisations.
 
The CSOs said that the current WTO rules have been identified by the UN Special Rapporteur on the Right to Food as a barrier to global food security.
 
"Given the impacts of global climate change, food price speculation, and rich country subsidies, it is immoral that developing countries and LDCs are still prevented by WTO rules from investing in domestic small-holder production, which has been repeatedly identified as one of the most important globally-agreed poverty-reduction strategies," said the letter.
 
According to the groups, this shows the importance of changing the WTO rules to allow these public food stockholding programs for the food security of developing countries and LDCs and how essential these subsidies are for supporting food production, procurement as well as for farmers' livelihoods.
 
The CSO letter drew attention to media reports citing the United States and India as having reached a deal on public stockholding for food security purposes, and that the text of the deal between India and the United States will only be released on 24 November 2014 and countries will be required to decide on it two days later, on 26 November 2014.
 
The CSOs stressed that this process is too rushed for such a vitally important issue and is extremely non-transparent.
 
"A deal reached between two countries does not mean that it suits all other countries. There should be a proper process to include the views of all other WTO member countries after having given them long enough to carefully and thoroughly consider all the implications for current and future programs of the deal reached between the US and India," they said.
 
The CSOs further emphasised that for it to be adequate for food security, the text of the US-India deal must contain the following provisions:
 
* "An unambiguous statement that the peace clause lasts until there is a permanent solution.
 
* "That any peace clause applies to existing as well as new programs. The Bali Ministerial Conference Public Stockholding for Food Security Purposes Decision is grossly inadequate because it only applies to programs existing as of 7 December 2013. This unnecessary restriction punishes those who did not have programs in place at the time they were asked to rapidly agree to this Decision. Many other developing countries and LDCs may want to have these programs in future, for example, when the global financial crisis is over and so they are able to afford them. It is very unfair that the Decision does not allow them to start these programs by using the peace clause in the future.
 
* "None of the onerous and inappropriate conditions on the peace clause that were in the Bali Decision, including those identified in our previous letter of 20 November 2013, which was endorsed by more than 230 civil society groups globally.
 
* "A requirement that the permanent solution should be quickly agreed with a satisfactory permanent solution by June 2015. From our perspective, the permanent solution must allow subsidies to producers for supporting public food programs as part of the Green Box that can be used by developing countries and LDCs without conditions and without limits. This is important because the current system of calculating subsidies based on 1986-88 reference prices would make almost any government purchase from farmers at today's price a violation of WTO rules by wrongly magnifying the subsidy. Therefore, the permanent solution must also correct the outdated reference price date and base the calculation of subsidies on current global prices."
 
The CSOs urged the WTO Members to ensure that developing countries' and LDCs' interests are not sacrificed in the current negotiations and at the special General Council meeting on 26 November 2014 in order to clear the path for the TFA.
 
"Crucial development issues in developing countries and LDCs such as food security and farmers' livelihoods must be addressed to their satisfaction if the Doha Development Agenda is to truly be a development round of negotiations at the WTO. A peace clause and committed accelerated work program on a permanent solution as outlined above needs to be agreed," the CSOs said.
 
INDIAN FARMERS' ORGANISATIONS ALSO RAISE CONCERNS
 
Meanwhile, in a letter to Indian Commerce and Industry Minister Ms Nirmala Sitharaman, Indian farmers' organisations and other civil society groups noted that from newspaper reports, it is evident that India has reached an understanding with the US which will ensure US support for the Indian proposal to be tabled at the WTO's General Council meeting.
 
This revised proposal will ensure that the ‘Peace Clause' related to the G-33 food security proposal will actually be in operation until a permanent solution is found, said the groups, adding that they believe the proposal will also include an institutional framework for discussion on the post-Bali work programme.
 
"These two gains are useful and could be of value for Indian agriculture, food security and farmers' livelihoods."
 
However, the groups are worried about the heavy conditions imposed on the use of the Peace Clause. These include the very onerous data filing requirements, the need to prove that the subsidies are "non trade distorting", and that it does not affect the food security of other countries.
 
The data filing requirements are worrisome especially since the US, Japan and EU are already questioning the reliability of subsidy statistics provided by India at the WTO, and asking why big farmers have been included in the producers' category and why the statistics were given in US dollars (not rupees), they added.
 
The letter to the Indian Minister was signed by a number of farmers' organisations including Bhartiya Kissan Union, the Indian Coordination Committee of Farmers' Movement, Bhartiya Kissan Union-Punjab, Tamilnadu Farmers' Association, Kerala Coconut Farmers' Association, Tamilnadu Organic Farmers' Federation and Kalanjium Women Farmers' Association.
 
Among the civil society groups signing onto the letter are the Alliance for Sustainable & Holistic Agriculture (ASHA), Third World Network-India, ActionAid-India, Focus on the Global South-India, Indian Social Action Forum, ToxicsWatch Alliance, Campaign for Affordable Trastuzumab, International Federation of Organic Agriculture Movement, South Asian Network for Social & Agricultural Development, Initiative for Health & Equity in Society and Diverse Women for Diversity.
 
In their letter to the Indian Minister, the groups noted that the Peace Clause does not cover the Agreement on Subsidies and Countervailing Measures (ASCM).
 
"We are also seriously concerned that the current Peace Clause is limited to ‘existing programmes' and fear that this will affect India's ability to expand its current food programmes and potentially restrain its sovereign policy space to come up with new ones, if need be."
 
The letter noted that civil society groups had pointed out these concerns with respect to the stringent conditions attached to the use of the Peace Clause before, during and after the Bali Ministerial.
 
"We strongly urge the government not to table this proposal without discussing and easing these restrictions. Unless these are addressed, India may not actually be able to use the Peace Clause at all. India should not be in a haste to sign the TFA without having ensured a fully usable and meaningful Peace Clause," said the groups.
 
While appreciating that the government has taken steps to forward talks on the Permanent Solution, through the setting up of an institutional mechanism, the groups urged the government to seriously pursue a genuine Permanent Solution "that does not just talk about the Reference Price but actually uses this opportunity to address the historical inequities in the Agreement on Agriculture (AoA) and the unfair subsidies given by the developed countries who are now pointing fingers at us."
 
The groups are also seriously concerned about India's agreement to ratify the Trade Facilitation Agreement (TFA). They argued that the TFA needs to be rejected not only as a strategy but on its own lack of merit.
 
"It imposes costs rather than benefits on us. It can lead to moving resources away from essential development expenditure whereas our industry is hardly ready to reap the benefits of the Agreement at least in the near to medium future. Given that the TFA is currently the main and perhaps the only interest for countries such as the USA in WTO negotiations, agreeing to the TFA now will also be a strategic blunder. Future negotiating positions on development issues in the Doha Round will be weakened and compromised."
 
The letter from the farmers' groups and civil society further said: "We are also aware that if this issue is resolved, we will get into further negotiations on other elements of agriculture, industry (NAMA) and services trade."
 
"The developed countries are pushing us to accept liberalisation in these areas that will severely threaten job generation, local industrial development especially of SMEs, food and farmers' livelihood security, access to affordable services, and will severely restrict policy space. The push for plurilaterals is also something we strongly reject. India needs to have very well thought out positions that are developed in consultation with civil society, state government and the Parliament on these issues."
 
While the letter noted and agreed that the Government is at least trying to take an apparently pro-farmer and pro-poor position at the WTO, it said that this stance is not consistent with its approach in domestic policy or in the Free Trade Agreements (FTAs).
 
In FTAs, the groups asserted, the government is willingly reducing applied duties in agricultural products and allowing increasing intellectual property rights to limit farmers' access to technology and seeds. FTAs are also bringing in strong investment chapters that are shifting control of productive natural resources away from farmers.
 
The groups urged the government to come up with a consistent policy stance at global, regional and domestic policy formulations; not accept any unfair and unreasonable conditions on the Peace Clause at the WTO; pursue a meaningful Permanent Solution that actually attempts to redress the historical unfairness of the AoA; and seriously analyse the usefulness of the TFA for the Indian people at large.
 
The government was also urged to initiate a dialogue and discussion with major political parties, farmers' groups, trade experts and civil society groups to keep them informed about these developments at the WTO and to develop a better understanding and policy response.
 
It was further urged to introspect about India's objective and value of being in the WTO and what influence it has on India's independent policy space and specifically organise/undertake a 20-year assessment of India's gains/losses from membership of the WTO. +

 


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