Info Service on WTO and Trade Issues (Dec15/17)
20 December 2015
Third World Network
Trade: MC10 going down to wire, US intransigent
Published in SUNS #8160 dated 21 December 2015
Nairobi, 18 Dec (D. Ravi Kanth) -- The World Trade Organization's
tenth ministerial conference, scheduled to end today (December 18)
is going down to the wire because of the intransigent positions adopted
by the United States.
The US is refusing to allow any mention of the Doha negotiations in
the proposed Nairobi deliverables as well as the reaffirmation for
continuing with the Doha Development Agenda (DDA) trade negotiations
in the final ministerial declaration, several people familiar with
the development told the SUNS.
A marathon green room meeting of the five countries - the United States,
the European Union, China, India, and Brazil - is trying to arrive
at compromise language on the special safeguard mechanism (SSM) for
developing countries, the work program for finalizing the permanent
solution for public stockholding
programs for food security, and the four elements - elimination of
export subsidies, disciplines on export credits, international food
aid, and state-trading enterprises.
According to people familiar with the meeting, the differences are
not abating on account of "my way or highway" positions
adopted by the US which is insisting on having specific language on
the three issues.
The facilitator for the agriculture deliverables, Joshua Setipa, the
trade minister of Lesotho, was supposed to issue a revised second
draft on Friday morning and hold a meeting by noon.
But, so far, the text was not circulated on account of continued fierce
differences among the five countries, said a person who asked not
to be quoted.
The differences on the export competition are primarily on export
credits between the US and China which has raised several concerns.
China has questioned the underlying rationale of the proposed disciplines
in export credits, particularly the repayment period and self-financing
In line with the US proposals, the facilitator has proposed maximum
repayment period of 18 months as covered under the US' GSM-102 export
Further, the facilitator has shelved the window of four years for
refinancing. The language on self-financing which says it has to cover
losses in the long term is what is already in the Agreement on Subsidies
and Countervailing Measures.
In effect, the proposed language on refinancing merely reiterates
the current rules, according to an agriculture negotiator, who asked
not to be quoted.
Under the 2008 revised draft modalities or Rev.4, export financing
programs even by private entities are not allowed.
The draft by the facilitator has deleted this requirement, thereby,
allowing US financial institutions, banks or private insurance companies
to remain undisciplined, the negotiator said.
China has suggested that the Hong Kong Ministerial Declaration and
the Rev.4 disciplines are not followed so as to allow one member to
continue their export subsidization through their export credit programs,
according to the negotiator.
China and India also raised sharp concerns on the proposed disciplines
for agriculture monopoly state-trading enterprises based on the best
The special and differential treatment flexibilities accorded to the
developing countries in the 2008 revised draft modalities are not
provided in the facilitator's draft. Worse still, said the negotiator,
the facilitator's draft provisions on international food aid are based
on best endeavour provisions as proposed by the US in its proposal
submitted a couple of months ago.
Besides the continued differences on export competition, China, India
and Turkey with a few other countries have tabled two proposals on
the special safeguard mechanism and the public stockholding programs
for food security.
The two proposals, though substantially watered down as compared to
the work that is done during the Doha trade negotiations, merely proposed
an accelerated work program to arrive at decisions by the next ministerial
conference in 2017.
The draft proposal submitted by the three countries called for an
accelerated program. It says:
1. The developing country Members shall have the right to have recourse
to a Special Safeguard Mechanism based on import quantity and price
2. The Members shall intensify efforts to achieve rapid progress on
Work on a Special Safeguard Mechanism based on import quantity and
price triggers for developing Members taking note of the work done
so far, and the proposals by Members in this regard.
3. The negotiations on this subject shall be held in the Committee
on Agriculture in Special Session ("CoA SS"), in dedicated
sessions and in an accelerated time-frame, distinct from the agriculture
negotiations under the Doha Development Agenda. Members shall engage
constructively to negotiate in order to ensure adoption of the Special
Safeguard Mechanism by the eleventh Ministerial Conference.
4. The General Council shall regularly review progress.
On the public stockholding programs for food security, the draft decision
says: "Members reaffirm that the mechanism as set out in the
Bali Ministerial Decision on Public Stockholding for Food Security
Purposes, and the General Council Decision of 27 November 2014, shall
remain in force until a permanent solution
on the issue of public stockholding for food security purposes is
agreed and adopted.
1. The negotiations on a permanent solution on the issue of public
stockholding for food security purposes shall continue to be pursued
as a priority in the Committee on Agriculture in Special Session ("CoA
SS"), in dedicated sessions and in an accelerated time-frame
distinct from the agriculture negotiations under
the Doha Development Agenda ("DDA"), so as to agree and
adopt the permanent solution on Public Stockholding for Food Security
Purposes, by the Eleventh Ministerial Conference.
2. The General Council shall regularly review progress of these dedicated
The United States vehemently opposed the proposal on SSM because it
mentions the Doha Development Agenda negotiations. The US along with
Australia and Brazil have also rejected any language for the work
program on SSM since no market access negotiations are being proposed
in the deliverables, said a South
American trade official.
Effectively, the US is blocking any mention of the Doha ministerial
decisions in any of the deliverables in agriculture, said a developing
Meanwhile, the chair for the Nairobi meeting, Amina Mohamed, Kenya's
cabinet secretary for foreign affairs, held meetings with the trade
ministers of the five countries on the most contentious issues in
Part III of the draft ministerial declaration.
Ms. Mohamed has suggested language to the effect that since the two
sides remained divided on the continuation of the Doha negotiations,
negotiations will be continued without mentioning Doha at all.
The Indian trade minister Nirmala Sitharaman insisted that without
having clear language that includes Doha in the work program, India
cannot accept the draft, said a person familiar with the meeting.
Further, the chair's proposal to include new issues also resulted
in a sharp divide among the developing countries on the one side and
the major developed countries on the other. The developed countries
want the inclusion of new issues in the final declaration.
In sum, the Nairobi meeting is on the verge of either setting new
rules to suit the Trade initiatives of the developed countries or
collapsing like the infamous Cancun ministerial meeting. So far, there
is no agreement among the five countries but a compromise cannot be
ruled out, according to a trade envoy.+