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TWN Info Service on WTO and Trade Issues (Oct15/22)
29 October 2015
Third World Network

Call for balanced outcome on three agri-pillars at Nairobi
Published in SUNS #8120 dated 26 October 2015

Geneva, 23 Oct (D. Ravi Kanth) - Trade envoys and agriculture negotiators on Thursday (October 22) called for balanced outcomes in all three pillars of the Doha agriculture negotiations at the Nairobi ministerial meeting despite insidious attempts by the leading developed countries to cobble a small package in the export competition pillar without adhering to the 2008 revised draft modalities (Rev.4), several agriculture negotiators told the SUNS.

At a closed-door meeting with the chair for Doha agriculture negotiations, Ambassador Vangelis Vitalis from New Zealand, trade envoys and agriculture negotiators from around 17 developing countries demanded balanced outcomes on all the three pillars - market access, domestic support, and export competition - based on the Rev.4, said people familiar with the meeting.

Trade envoys/negotiators from Mexico, Tunisia, Brazil, Mauritius, Israel, Turkey, Venezuela, Thailand, Korea, Uruguay, Barbados which is the coordinator for the ACP (Africa, Caribbean, and Pacific) group, Pakistan, India, Indonesia, Colombia, and Dominican Republic took part in the meeting.

The chair sought to know the participants' views on the proposed deliverables in the export competition pillar.

Some developed countries apparently said they want to see the elimination of the two sub-paragraphs within paragraph 162 of the Rev.4, the chair informed the participants.

The paragraph 162 in the Rev.4 has stipulated a down payment of 50% cut in budgetary outlay commitments by the end of 2010 in equal annual installments from the date of entry into force and the remaining 50% to be eliminated by 2013.

It reads: "Developed country Members shall eliminate their remaining scheduled export subsidy entitlements by the end of 2013. This shall be effected on the basis of:

(a) budgetary outlay commitments being reduced by 50 per cent by the end of 2010 in equal annual instalments from the date of entry into force, with the remaining budgetary outlay commitments being reduced to zero in equal annual instalments so that all forms of export subsidies are eliminated by the end of 2013.

(b) quantity commitment levels being applied as a standstill from the commencement until the end of the implementation period at the actual average of quantity levels in the 2003-05 base period. Furthermore, throughout the implementation period, there shall be no export subsidies applied either to new markets or to new products."

The underlying rationale (as put forward by the developed countries) for the elimination of the two sub- paragraphs in paragraph 162 is that the developed countries do not want to pay any down payment and eliminate all their subsidies in one go at the end of the implementation period in 2020, an African agriculture negotiator told the SUNS.

In response to the chair's elaboration of the demands made by some developed countries, the developing countries said they want to see a written proposal from those countries that are seeking substantial flexibility.

The chair said he has not received any proposal from the proponents, including the United States, which is pressing for outcomes in the export competition pillar till now.

Ambassador Vitalis also drew attention to paragraph 164 in which the developed countries wanted elimination of Article 9.4 of the Agreement on Agriculture. The paragraph reads: "In accordance with the Hong Kong Ministerial Declaration, developing country Members shall, furthermore, continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture until the end of 2021, i.e. five years after the end-date for elimination of all forms of export subsidies."

The developing countries said it is incorrect to eliminate the Article 9.4 as it would be tantamount to substantial changes in the Rev 4. The developing countries maintained such a change would go against the chair's assurance that there should be minimal changes as far as possible in the Rev.4 It amounts to re-writing paragraph 162 and 164 of the Rev.4, the developing countries argued.

The chair maintained that he is waiting for the written proposals, according to the participants familiar with the meeting.

During the meeting several developing countries raised sharp concerns over the adjustments sought by developed countries.

India said the export competition pillar is not balanced, maintaining that there has to be an overall balance in outcomes on all three pillars. If ambition goes up or down in one area, it must be reflected in other areas as well, India argued. More importantly, "the special and differential treatment is non-negotiable," India emphasized.

Brazil, which no longer speaks on behalf of the G-20 farm coalition, called for the elimination of export subsidies as well as other elements in the export competition pillar. Brazil said the outcomes must be based largely on Rev.4 so to ensure "balance" in the outcomes, according to participants present at the meeting.

In conclusion, the chair Ambassador Vitalis spoke on eight elements stemming from his discussion. The elements include i) balance is a concern, ii) Rev. 4 text to be basis for the outcomes, iii) minimal adjustments in the Rev.4, iv) changes to be accommodated on a reciprocal basis, v) special safeguard mechanism has to be there as part of the balance in agriculture, vi) importance of special and differential treatment, and continuation of Article 9.4 along with flexibilities for small and vulnerable economies, vii) calibration of ambition, and viii) transparency in the negotiating process.

Meanwhile, the African Group of countries on Thursday circulated a detailed proposal on agriculture, maintaining that "since the Uruguay Round, developing countries have waited 20 years for the implementation of the Built-In Agenda of the Agreement on Agriculture to reform agriculture."

Lesotho, on behalf of the African Group, said the Doha mandate with "substantial reductions in trade distorting domestic support" must be achieved. "This would contribute to correcting the imbalances inherited from the Uruguay Round ... This is because the continuation of massive domestic support in developed countries is a major distortion of the trading system," the African Group said.

As most of the farmers are small subsistence farmers in Africa, "subsistence/smallholder agriculture can play an important role in reducing the vulnerability of rural and urban food-insecure households, improving livelihoods, and helping to mitigate high food price inflation," the African countries maintained.

Moreover, the African farmers "are extremely vulnerable to the subsidised imports that for several decades have had negative impact on their production, for example, of cereals, poultry, tomato paste, dairy and cotton."

"Also, the high subsidies as well as high agriculture tariffs in developed countries almost denied market access for exports of agricultural products from the African countries. All of these, in combination, have meant that many of our small farmers have been edged out of their domestic markets, whilst not having access to other markets," the African countries argued.

"It is well established that the current global system is distorted and pits small-scale, largely subsistence farmers against farmers of developed countries who during the past century have been heavily assisted to increasingly capture economies of scale," the African Group argued.

More disturbingly, the developed countries continued to not only maintain trade-distorting subsidies but "one study estimates that Green Box subsidies increased agricultural productivity by around 60% in the European Union and 51% in the United States."

"A substantial reduction in US and EU Green Box subsidies would lead to a rise in export volume and revenues and a fall in their import costs for LDCs," according to the African Group.

Even the 2008 revised draft modalities only provided modest landing zones and must be strictly followed to tackling all the trade-distorting measures, the African countries argued. "The African Group reaffirms the mandates for the agriculture negotiations as provided in the Doha Ministerial Declaration (2001), July Framework (2004), Hong Kong Ministerial Declaration (2005), and the Bali Ministerial Declaration (2013)," the Group maintained.

In short, "the outcome of the DDA negotiations in the area of agriculture must achieve the following for Africa:

i. Substantial reduction of trade-distorting domestic support in the agricultural sector. In particular, trade- distorting domestic support which historically have been and are still currently provided by developed countries must be substantially reduced, especially reduction of subsidies to products produced by African small farmers. There should also be strict disciplines regarding "box-shifting" towards Green Box supports, to ensure that these supports are truly minimally or non-trade distorting.

ii. Allow African countries to pursue "agricultural policies that are supportive of their development goals, poverty reduction strategies, food security and livelihood concerns" (para. 2, Annex A, July 2004 Framework)."

Pressure is mounting on the World Trade Organization Director-General Roberto Azevedo and the developed countries to deliver credible outcomes in the Doha agriculture package at Nairobi. A storm is already brewing against attempts to finalize a small package of deliverables by turning a blind eye to the overall Doha Development Agenda mandates. The next few weeks will indicate whether the African countries can secure equitable outcomes at Nairobi or remain cheated on their own soil, several developing country envoys argued.

 


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