Info Service on WTO and Trade Issues (Jul15/01)
2 July 2015
Third World Network
US-EU block permanent solution for food security public stockholding
Published in SUNS #8051 dated 29 June 2015
Geneva, 26 Jun (D. Ravi Kanth) -- Major developed countries, particularly
the United States and the European Union, have vehemently opposed
a proposal from the G-33 coalition for a permanent solution for public
stockholding programmes for food security in the developing countries,
several trade envoys told SUNS.
The US and the EU blocked a proposal from the G-33 coalition that
calls for "transferring" market price support for public
stockholding programmes for food security in developing countries
into the "Green Box" under the WTO's Agreement on Agriculture
(AoA), several trade envoys told the SUNS.
Programmes included for coverage in the Green Box are exempted from
reduction commitments and thereby, remain beyond any legal challenge
at the WTO.
During a meeting of select trade envoys convened by the chair for
Doha agriculture negotiations Ambassador John Adank of New Zealand
on Thursday, Indonesia, on behalf of the G-33 developing country coalition,
proposed transferring market price support for the public stockholding
programmes for food security to the Green Box and said this will not
change the structure of the AoA.
Trade envoys from the United States, the European Union, China, India,
Indonesia, Australia, Norway, the Philippines, and Brazil were among
those who took part in the meeting.
Indonesia, which is the coordinator for the 46-member developing country
coalition, argued that the public stockholding programmes for food
security are already contained in the Green Box.
The Green Box programmes were constructed by the US and the EU in
the Uruguay Round agreement to exempt such programmes from any reduction
In the Annex II of the AoA, public stockholding programmes for food
security are covered in paragraph 3 with a caveat: "Expenditures
(or revenue foregone) in relation to the accumulation and holding
of stocks of products which form an integral part of a food security
program identified in national legislation."
However, this provision in the Green Box on the public stockholding
programmes for food security is further subjected to calculation of
Aggregate Measurement of Support (AMS) in the Amber Box in terms of
footnote five of the Annex II.
Indonesia said the existing ambiguity can be addressed without any
change in the structure of the Green Box by including market price
support for public stockholding programmes.
A solution can be designed without changing the structure of the Agreement
on Agriculture while addressing the legitimate objectives of the G-33
proposal, Indonesia persuasively argued, according to participants
familiar with the meeting.
The G-33 expressed sharp concern over diversionary tactics adopted
by some members who refuse to engage on the basis of its proposal.
Indonesia challenged the claims made by some countries such as Australia
and Pakistan that there would be unintended consequences on trade
and food security of other countries.
The G-33 also challenged a claim made by the developed countries that
it would have a "systemic" impact of market price support
in the Green Box.
Indonesia said these two claims are unscientific and without evidence,
said a trade official who was present at the meeting.
The most productive way to find a permanent solution for public stockholding
programmes is to have other members come up with a "clear, text-based
counter proposal on how the stated concerns might be addressed ...
Simply general comments or utter rejections will not help," Indonesia
In response to Indonesia's statement, the US expressed disappointment
that the G-33 coalition is seeking a permanent solution by transferring
market price support into the Green Box.
The US, the EU, and Australia claimed that the edifice for the Green
Box is constructed over many years.
The developed countries repeatedly spoke about the "integrity"
of the Green Box and how it would be compromised and affected because
of transferring market price support for public stockholding programmes.
The EU flatly rejected the call for any Green Box exemption for public
stockholding programmes for food security.
Australia maintained that such a treatment under the Green Box for
public stockholding programmes would have far-reaching consequences
on the global trade for farm products, a concern that was also shared
In sharp response, India ridiculed the claim that the edifice and
the integrity of the Green Box will be affected because of market
price support for public stockholding programmes for food security.
India challenged the hyperbolic claims about the sanctity of the Green
India maintained that the public stockholding programmes are very
much covered in the Green Box of the AoA negotiated during the Uruguay
Round of trade negotiations.
After including the programmes in the Green Box, India asked, why
are the same programmes subjected to reduction commitments under the
India said if the sanctity of the Green Box is undermined, then, it
is time to review all the Green Box support programmes of every country.
India said that there cannot be double standards involving one set
of norms for some programmes and another set for developing countries.
In his article on "Why WTO needs a Hypocrisy Clause," Timothy
Wise, an academic at the Global Development and Environment Institute
at Tufts University in the US has argued that "the WTO's ‘Green
Box', which is meant to hold non-trade-distorting subsidies, is now
home to about US$120 billion of the US$130 billion in nutrition programs
and farm supports."
Several other studies have also conclusively proved that several of
the schemes now included in the Green Box are trade-distorting and
affect global trade.
In Brazil's cotton dispute against the US, the Appellate Body has
showed about the possible adverse effect of the US Green Box measures.
The US and EU which specially constructed the "Green Box"
in the AoA, with specific carve-outs for their agricultural support
during the Uruguay Round of trade negotiations, have systematically
moved their subsidy programmes to the Green Box because of their current
In the Doha Round negotiations, the G-20 farm coalition led by Brazil,
India, China, and South Africa underscored the need for reviewing
the Green Box measures.
In the draft negotiating text sent to the failed Cancun ministerial
meeting, the chair for the General Council had proposed on August
23, 2003 in bullet point 1.5 that "Green Box criteria remain
The July 2004 framework agreement and the 2005 Hong Kong Ministerial
Declaration mandated the review of Green Box measures.
The review of the Green Box also figured during several closed-door
meetings between the chair and select trade envoys in which the EU
and Canada fiercely opposed the proposal for examining Green Box programmes.
Against this backdrop, the opposition from the US, the EU and Australia
to include the market price support for public stockholding programmes
is not only disingenuous but smacks of the "hypocrisy" and
"double-standards" by developed countries.
In one go, it proves that the trans-Atlantic trade partners are willing
to avail all Green Box schemes to cover up their hundreds of billions
of market-incentive programmes for their farmers but will not allow
the public stockholding programmes to be exempted from reduction commitments
in the Green Box.
Effectively, the two countries are sending a message that they are
not willing to allow Green Box coverage of public stockholding programmes
meant to address livelihood and food security needs of hundreds of
millions of poor people in the developing world.
The US has, however, audaciously suggested that the G-33 will block
an agreement at the tenth ministerial conference in Nairobi, Kenya,
later in the year even if there is an agreement on all other issues
of the Doha package, said a trade envoy.
If the developed countries are determined to close the Doha Round
without conceding minimal gains for the developing and the poorest
countries, then, the developing countries must follow what Brazil's
former trade minister Celso Amorim had advised when he said, "No
deal is better than a bad and flawed agreement," said a trade
envoy from South America. +